The issue of inefficient industry innovation caused by the segmentation of domestic and foreign trade markets has been prominent, leading to a long-standing "productivity paradox" between domestic and foreign trade. "Constructing a new pattern of integration of domestic and foreign trade with the domestic cycle as the main body and the mutual promotion of domestic and international cycles" is a strategic deployment of the Party Central Committee and the State Council. This paper investigates the problems and intrinsic mechanisms faced in the process of enterprise integration of domestic and foreign trade from the perspective of knowledge transfer. It clarifies that the primary task of integrating domestic and foreign trade is to solve the problem of inefficient knowledge transfer between domestic and foreign trade. At the same time, the study shows that: On the one hand, by constructing a horizontal system of knowledge transfer between domestic and foreign trade, it is possible to effectively enable foreign trade enterprises to enjoy the dividends of unified large market reforms, better integrate resources and standards with the domestic trade market, and promote the transfer of knowledge achievements of foreign trade enterprises to the domestic market. On the other hand, through vertical industrial ecological knowledge embedding, it can promote domestic enterprises to leverage the advantages of domestic consumption scale, integrate technology, channels, and platform resources, achieve knowledge embedding of enterprises in the vertical ecological chain of industries, and ultimately achieve the goal of integrated development of domestic and foreign trade.
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