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An Empirical Study on The Relationship between External Trade and Economic Growth in China

Fan Da-liang

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Abstract

The relationship between external trade and economic growth in China is analysed by applying co-integration analytical tools and Granger causality - VAR model. The conclusion indicates that the relationship between external trade and economic growth keeps steady, and there is only single-direction causality existing between export and GDP or between import and export. Economic growth in China is an export-oriented growth, therefore, the export trade must be strengthened, at the same time, import trade should not be ignored.

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What this paper is about

The relationship between external trade and economic growth in China is analysed by applying co-integration analytical tools and Granger causality - VAR model. The conclusion indicates that the relationship between external trade and economic growth keeps steady, and there is only single-direction causality existing between export and GDP or between import and export. Economic growth in China is an export-oriented growth, therefore, the export trade must be strengthened, at the same time, import trade should not be ignored.

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Available abstract

The relationship between external trade and economic growth in China is analysed by applying co-integration analytical tools and Granger causality - VAR model. The conclusion indicates that the relationship between external trade and economic growth keeps steady, and there is only single-direction causality existing between export and GDP or between import and export. Economic growth in China is an export-oriented growth, therefore, the export trade must be strengthened, at the same time, import trade should not be ignored.

Key concepts: Granger causality, China, Economics, Causality (physics), Economic integration, Export trade, International economics, International trade

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