A Research on the Causality Relationship between Services Industry and Economy Growth in China

In order to discuss the causality relationship between services industry and economy growth in China ,this paper makes an empirical analysis of the causality relationship between services industry and economy growth using Granger causality test, unit root rest and cointegration test according to the corresponding data from 1980 to 2007 in China. The results show that there is some causality and a long-term stable equilibrium relationship between services industry and economy growth. The economy growth increased 0.8766% as that of the services industry increased 1% in China. Chinese services industry and economy growth are the Granger causality of each other. The development of services industry plays an important role in economy growth. The relevant suggestions should be taken to accelerate the development of services industry.