A study on the relationship between the developments of China’s trading economy and environmental factors

Xueying Zheng

Economic and Trade College, Zhejiang Business College, Hangzhou, Zhejiang Province, China, 310053

Trade environment refers to the social and economic environment facing trading economy, and it can directly affect the pace of trade development and trade structure. Establishing a good trade development environment can optimize trade structure, and promote the sustained and healthy economic development. This paper firstly analyzes the current environment of China’s trade development with relevant theories, then analyzes the relationship between environmental factors and the development of trading economy based on indexes, builds error correction model, and uses the model to make in-depth analysis on the impacts of environment on the development of trading economy. According to the study results, the ratio of trade dependency over trade surplus exerts side effects on the development of trading economy, while trade openness exerts positive effects on the development of trading economy. In terms of import, the development of China’s trading economy shows excessive dependence on foreign energy and other resource-based products, this seriously affects the stable development of economy. In terms of export, some Chinese companies that have overcapacity show over-reliance on international markets, thus reducing the competitiveness of export products, and leading to the situation where China’s trading economy is vulnerable to fluctuations of international markets. Based on this, a method is proposed in the paper to improve China’s trade environment.