The Relationship Of Foreign Trade And Economic Growth In The Process Of Industrialization

In the background of economic globalization, the word economy interdepend more closely. In this context, countries are integrated into the global economic activities, which made the world economy more interdependently.The foreign trade dependence in China has been increasing since the beginning of reform and opening-up, which means that the economy more depend on foreign trade. How trade affect the economy is worth us to make a further thinking. This paper makes a empirical analysis about the role of foreign trade in economic growth from the respect of trade dependence on the basis of dividing the industrialization development stage. Then, make some suggestions toward China’s foreign trade condition. Firstly, the paper sorts out the domestic and relevant analysis about the foreign trade dependence and clear the economic meaning of the foreign trade dependence, which lay a basis for the later discussion. Secondly, Secondly, try to divide China’s industrialization into three stages:the start-up stage of industrialization(1953-1978);the slow development stage(1979-1992);the fast development stage(1993-present). Make a specific analysis of each stage’s characterics and foreign trade dependence situation. Then, make an empirical analysis about the relationship between the economy development and the trade on each industry stage from the point of foreign trade dependence and focus on the third stage, in which period China’s import and export trade structure changed. In this part, the paper used the cointegration test and error correction model to analysis the relationship between the raw materials consumption import dependency, the export dependency of manufactured goods’output value and the economic growth. Then, we got a conclusion that the increase of row materials import will prompt China’s economic growth. While, the labor intensive products’ export dependence and economic growth have a negative relationship, the capital technology intensive products’export dependence and economic growth are positively related.Finally, give some suggestions to our foreign trade including China should transform the growth mode of foreign trade, promote industrial upgrading and at the same time don’t neglect the role of import.