Abstract
This paper analyses the effect of foreign trade in China on the urban-rural income gap from certain angles including trade scale, trade structure and trade mode at the national and provincial levels. The empirical results indicate that, from the perspective of trade scale, the export and import in the eastern and national regions have an expansion effect on the urban-rural income gap, and, in the central regions, they have a reduction effect. Furthermore, export in the western regions has a reduction effect while import in these regions did not have a significant effect. From the perspective of trade structure, the trade of high-tech products and labour-intensive products in the national and eastern regions has an expansion effect, and the trade of the above-mentioned products in the central regions has a reduction effect. The trade of labour-intensive products in the western regions has a reduction effect, and that of high-tech products an expansion effect. From the perspective of trade mode, processing trade and general trade in the national and eastern regions have an expansion effect, while in the central regions they have a reduction effect. General trade in the western regions would expand the urban-rural income gap, and processing trade does not have a significant effect. Consequently, when the South African Government is working out trade multiplicative and corresponding policy, they should consider the development of foreign trade and should pay attention to the labour market structure.
Highlights
Since the 1970s, international trade has rapidly been developed, and problems like income disparity, of which the core problem is income gap expansion, are increasing, attracting widespread attention from international as well as labour economists (Harrison, Mclaren & Margaret, 2010)
The effect of general and processing trades in the eastern regions on the urban-rural income gap is significant, which is in accordance with the regression results at national level; the effect of general trade on the urban-rural income gap in the eastern regions is greater than that of processing trade, which is in disagreement with the regression results at national level
From the perspective of trade mode, the effects of openness to foreign direct investment and the average level of education on general and processing trades are significant, which is in accordance with the regression results above
Summary
Since the 1970s, international trade has rapidly been developed, and problems like income disparity, of which the core problem is income gap expansion, are increasing, attracting widespread attention from international as well as labour economists (Harrison, Mclaren & Margaret, 2010). Scholars have researched this problem at two levels. From the perspective of trade scale, trade mode and trade structure, this paper employs panel data from 29 provinces spanning 1986-2010 to analyse the effect of foreign trade on the urban-rural income gap, which has attracted increasing international attention.
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