The Reducing Export Trade's Impact To China's Economic Growth After The Outbreak Of The Subprime Crisis

After China's reform and opening policy, China has maintained rapid economic growth and accompanied by strong export expansion. Particularly, after China entered WTO, the market gradually expands openness, the role of export trade on China's economic growth is becoming a hot research. After subprime crisis, China's real economy is seriously affected by it, hence, it is very important that to study the relationship between export trade and economic growth after the outbreak of subprime crisis, based on this, the paper researched these issues in theory, model and empirical perspectives.Firstly, a general situation of China's exports and economic growth is described in this thesis since China's reform and opening policy had been implemented. Proved, after China's reform and opening policy, China maintained a high export dependence. Exports and economic growth have seen the more consistent fluctuating paths, then this paper describes the mechanism by which export trade promotes the economic growth, concluded that the export trade mainly through the idle resources, investment, technological progress, human capital, economies of scale and technological innovation to promote economic growth. Secondly,this paper briefly introduced basic model of relationship between export trade and economic growth, such as the Balassa model, Taylor model and Feder model. After that, in this paper, the stationary test for time series, cointegration and Granger causality test were explained.In the empirical analysis, this paper selected GDP, exports, imports data as samples from the first quarter of 2005 until the first quarter of 2010. The modeling methods mainly are cointegration theory and dummy variable model. The empirical analysis uses the unit root test, cointegration tests and causality tests in order to draw conclusions. On the basis of the case study results and China's general situation of foreign trade and economic growth,it is revealed that export trade can improve economic growth. By dummy variable model ,a conclusion is made that China's export dependence has declined significantly after the outbreak of the subprime crisis. Finally, based on the case study and China's general situation of both foreign trade and economic growth, some suggestions of boosting foreign trade's positive influence on economic growth in China are made.