Usually, the terms of trade are expressed by the ratio of export price index to import price index in this period. The index used to measure the profitability and trade benefits of a country's exports relative to imports in a certain period reflects the country's foreign trade situation, which is generally expressed by the terms of trade index and is particularly important in bilateral trade.
Extended data
According to international trade theory, export-oriented trade growth will worsen a country's terms of trade, while import-oriented growth will improve a country's terms of trade.
At the same time, according to Krugman's standard trade model: the improvement of a country's terms of trade will increase a country's welfare level; On the contrary, the deterioration of terms of trade will reduce a country's welfare level. ?
There are three commonly used terms of trade: price terms of trade, income terms of trade and factor terms of trade, which measure a country's trade income from different angles.
Among them, price and terms of trade are the most meaningful and easy to calculate according to the existing data. The improvement of a country's terms of trade usually means that the price of its exports has risen relative to the price of its imports.
Economic growth and GDP increase will inevitably lead to the deterioration of terms of trade. China is a large developing country with abundant labor force, and compared with developed and developing countries, it is more likely that the terms of trade will deteriorate.
From the perspective of industrial structure, corresponding preventive measures can be taken:
1. Increase investment in education and scientific research and support enterprise R&D..
2. Accelerate the process of urbanization, especially urbanization, and realize the evolution and upgrading of the overall industrial layout through the gradual integration of urban and rural areas. At the same time of urbanization, we should increase the transformation of traditional agriculture and increase investment in agricultural scientific research.
3. Realize and promote the step-by-step undertaking of regional industries. This undertaking includes two aspects, on the one hand, in the international market, on the other hand, in the domestic market. In the international market, it is necessary to realize the echelon undertaking of (large) regional industries, and in the domestic market, it is necessary to speed up the echelon undertaking of (small) regional industries. In order to ensure the smooth realization of these two aspects, the government needs to adopt various policies to guide and arrange them.
4. Pay attention to guiding foreign investment to play an active role in industrial optimization and upgrading.
Baidu Encyclopedia-Terms of Trade