This paper reviews the Continuum of Inputs Model, which we use to analyze the processing trade in China. The conclusion is that most of the FDI in China are engaged in processing trade, and then promotes the industrial structure of China.

This paper briefly surveys the literature of measures of trade openness and points out the main factorsaffected the size of trade openness. Then we estimate the trade intensity in China and adjust it afterseveral selected factors. The conclusion is that the nominal trade intensity in China has been larger thanits theoretical value, especially for 2001 - 2003. Reasons for the deviation of 2001 -2003 are (1) thelag effect of the accession into WTO; (2) the depreciation of USD and (3) other trade policy andindustry policy.