Big Events and the Structural Changes of Foreign Trade in Guangdong Province of China

Abstract

Foreign trade in Guangdong province of China plays an important role in the country and even the whole world. There are two kinds of big events which may impact Guangdong’s imports and exports, one is universal events such as the outbreak of financial crisis in 2008, the other is regional events such as the launch of CEPA in 2004. Big events may have great impact on foreign trade in Guangdong province. By applying the method advanced by Lumsdaine and Papell, the relationship between big events and Guangdong’s foreign trade is investigated. It shows that the big events, including the launch of CEPA in 2004, the RMB exchange rate formation mechanism reform in 2005, the outbreak of financial crisis in 2008, have impacted significantly on the imports of Guangdong. It also indicates that the growth rate of exports is slow down due to the financial crisis and European debt crisis.