The index of dependence on foreign trade has always been the focus of controversy in theoretical circles, with different evaluations. According to Keynes's foreign trade multiplier theory, a country's exports, like domestic investment, have a multiplier effect on employment and national income, and a multiplier effect is formed between exports and the national economy. Exports depend on the demand of foreign consumers for the country's products. If foreign countries are in the period of economic rise, the demand for their products will increase, thus promoting the national economic growth of the country; However, if foreign countries enter recession or economic growth is sluggish, the demand for their products will decline, thus causing the country to fall into or even accelerate economic recession. So it can be said that the dependence on foreign trade is a double-edged sword. Any country should be aware that while gaining export growth and accelerating domestic economic growth, there are huge risks hidden. For a large developing country with a large population, this index should not be too high. Otherwise, it will make a country's economy very sensitive to the fluctuation of the world economy, while ignoring the cultivation and development of the domestic market.
China is highly dependent on foreign trade, including the rapid growth of export dependence, which is closely related to the growth of processing trade in China. In recent 10 years, the development of China's market economy has greatly mobilized the development of foreign-funded enterprises and private economy, created conditions for using cheap labor to produce labor-intensive products, and caused excessive development and blind export of labor-intensive products in China. Many foreign businessmen turned their eyes to China as a processing base, and carried out a lot of processing trade. Therefore, from the perspective of China's foreign trade structure, the rapid development of processing trade has an important impact on the improvement of China's dependence on foreign trade.
In the long run, in order to make good use of the double-edged sword of dependence on foreign trade and slow down the possible impact of international economic fluctuations on China's economy, we should stabilize China's dependence on foreign trade. At present, the primary task is to actively expand domestic demand and build China's manufactured goods export on the basis of meeting domestic demand. On the premise of satisfying the domestic market, we will form the comparative advantage of China's manufactured goods, reduce our dependence on foreign markets, and independently control the survival state of enterprises.
China's domestic market has great potential, which is one of the important reasons why many foreign businessmen are optimistic about China. The long-term development and prosperity of China's economy should be based on domestic consumption and investment. The development and perfection of the domestic market is the key point in the future, and foreign trade activities should obey China's long-term economic development strategy. Especially in the current situation of increasing trade friction between China and other countries, expanding domestic demand is a good way to promote economic growth and stabilize foreign trade dependence.