China's Foreign Trade On Economic Growth

Many economists such as David Ricardo, John Stuart Mill and R.Prebish, focused on the relationship between economic growth and international trade, since Adam Smith put forward the idea that international trade was the engine of economic growth . Not only foreign economists but also domestic ones admitted that international trade had great influence on economic growth.About the relationship between economic growth and international trade, many domestic scholars have performed particular researches and analysis. Unfortunately they had different conclusions from the researches. Some scholars thought that export was very important and able to promote economic growth. While others believed that export had a little influence on economic growth, and import was more important because it was able to accelerate economic growth from the long term.Since China's reform and opening to the world, China has expanded international trade and made great progress. International trade have accelerated Chinese economy while economic growth promotes expansion of international trade. International trade has more and more contributions to Chinese economy. With China's entry into WTO, the trade environment is changed greatly: some countries think that China exports too many commodities by using underestimated money, and it will do harm to their economy. So which factor import or export is more important to promote economic growth in China?In this paper, we mainly focused the question and wanted to analyze this matter in virtue of cointegration analysis. This article included four chapters. The first chapter gives a theoretic analysis to the influence of international trade upon Chinese economy. Firstly we reviewed economic growth theories. And then we introduced international trade theories. These theories became the base of this article.The second chapter mainly discussed the current situation of Chinainternational trade. By observing the plot of international trade and economic growth , we found that trade and growth had the same tread. But we should pay attention that the dependence degree of trade was becoming larger. It was a bad thing for a big country. On this basis, we analyzed the structure of trade commodities and discussed processing trade that became a large share in China's international trade.The third chapter mainly discussed the relationship between international trade and economic growth in use of cointegration analysis and Granger test. First, we summarized resent literatures about the matter, and indicated their deficiency. Second, we introduced cointegration theory ,and this became the base of this article. Third, by using Eview 3.1, we performed unit root test, cointegration analysis, Granger test and impulsion decomposition. Last, on basis of quantified analysis, we made a conclusion that export had a little influence on economic growth, while import had a prominent influence on economic growth .,and then we analyzed its economic meaning.The forth chapter mainly introduced our policy about international trade. Firstly, we emphasized the importance of trade . Then ,we put forward the suitable trade policy , on the basis of the third chapter's conclusion. Last, we brought forward some measures that would benefit Chinses economic growth , on the short term and long term.