An Empirical Study Of The Relationship Between China's Economic Openness And Economic Growth

Since reform and opening up, China's economic openness has been greatly improved. The level of opening up has emerged as a very strong upward trend in the opening breadth and depth of opening up. By vigorously promoting the reform of foreign trade system, China's foreign trade embarked on a comprehensive, diversified, and leap-forward development of the track. It has achieved an unprecedented development in terms of both the quantity and the quality, maintaining sound development momentum. At the same time, China's economic growth has also been developed rapidly. The rapid development of economic growth appears to be driven by the economic opening. But in fact, does the economic opening lead to economic growth What about the inter-relationship between them Is there a long-term stability of the equilibrium relationship Is there a causal relationship between each other If there is, then who is the cause and who is the result These will require us to research and analyze. Therefore, this article has studied the relationship between the economic openness and economic growth.This paper discusses China's economic openness and economic growth in mutual relations. First, the article describes the meaning of economic openness as well as the method of measurement and initially establishes metrics used in this article, as well as the filtering methods of relevant indicators. And then, it describes the meaning of economic growth and its influence factors. Second, the article describes the co-integration theory, error correction models and the Granger causality test, providing a reliable theoretical basis for the research on the relationship between economic openness and economic growth. Among them, co-integration theory is used to explore the long-run equilibrium relationship of the non-stationary economic variables, and the error correction model is used to study the short-term dynamic relationship among economic variables, while the Granger causality test is used to test the causal relationship between two variables. Again, in this paper, cluster analysis is used to determine the ultimate economic openness indicator system. It establishes the measure model of economic openness, using factor analysis comprehensive evaluation method. Further, this paper makes research on the long-run equilibrium relationship and short-term dynamics relationship of economic openness and economic growth, using co-integration analysis and error correction model. It uses causality test to analyze the causal relationship of economic openness and economic growth. Finally, based on empirical research findings and combined with China's national conditions, the paper proposes policy and recommendations for enhancing China's economic openness on the role in promoting economic growth.