This article measures transaction efficiencies including the hard efficiency and the soft efficien-cy with relevant data across 30 provinces in China within 1997 and 2002 and analyzes econometrically the evolution relationship among domestic trade，foreign trade and transaction ef iciencies using fixed effect paneldatamodel. Theresultshowsthatbothdomestictradeandforeigntradeincreasewiththeincreaseof trade efficiencies. Moreover，the soft trade efficiency affects trade much more than the hard one does. The analysis impliesthatimprovingtradeefficiencies isnecessarytostimulatefurtherdevelopmentofdomestic and foreign trade.