Study On Foreign Trade Impacts On Economy In Shandong Province

Along with opening up increasingly in China, the change of the economic growthpattern and the adjustment of the industrial structure, China’s economic development hasachieved unprecedented achievements in recent years. The GDP in China has grownrapidly and has made more and more contribution to the world economic growth. At thesame time, the development of import and export trade has made the key breakthrough.The trade surplus has maintained for many years. The volume of trade has increasedcontinuously for several years and the high value-added and high-tech products havebecome the main export. With the development of the global economy, the economicgrowth of one country or one region is increasingly affected by the foreign countries. Linksbetween countries have tightened increasingly and the interdependence of the countries isgetting higher. The foreign trade can boost the economic growth of one country or oneregion. As an open coastal province, economic growth and foreign trade in ShandongProvince compare favorably with those of other provinces. In2012, the GDP in ShandongProvince has amounted to5trillion yuan, while the turnover of foreign trade in ShandongProvince has amounted to$245billion. The foreign trade has become a key element thatmakes Shandong province economy be rapid, stable and healthy development. Therefore,this paper analyzes the relationship between import and export trade and economic growthin Shandong Province. The aim of this paper is to explore the influence of foreign trade oneconomic growth. Not only can we study the current economic growth in ShandongProvince and the development of foreign trade, but we can find out the shortages of theforeign trade that promotes economic growth in Shandong Province. In order to promoteeconomic growth and social development in Shandong Province, the relevant policies andlegal measures of foreign trade are made in this paper.Firstly, the paper analyzes the change of the total GDP and the volume of foreign tradefrom1987to2011in Shandong Province. The effect of foreign trade on economic growth is measured by the degree of dependence on foreign trade. In recent years, the degree ofdependence on foreign trade in Shandong Province has remained above30%, which can showthat the foreign trade can promote the economic growth in Shandong Province. Throughanalysis on the foreign trade competitiveness index, we can see that the competitiveness of theimport trade and the export trade in Shandong Province has enhanced significantly in theinternational market. The paper also analyzes the import and export commodity structure, thetrade structure, the trade subjects and the foreign trade market structure respectively.The relationship of foreign trade and economic growth in Shandong Province is analyzedbased on the quantitative analysis method. First of all, the econometric model is introduced,such as the unit root test, the co-integration relationship test, the granger causality test and theerror correction model. Second, the stability is tested by method of unit root test and the co-integration test is used to find the relationship between the economic growth and the foreigntrade in Shandong Province. Through the granger causality test, we can see that there is theinteraction between the foreign trade and the economic growth in Shandong Province. Theforeign trade plays a strong role in economic growth in Shandong Province. Third, through thequalitative and quantitative analysis, we can see that the foreign trade can drive the rapideconomic growth in Shandong Province. In order to achieve greater development of foreigntrade and economic growth, this paper finally puts forward the policy suggestions. Theenterprises should strengthen the independent innovation ability and export more high value-added and high-tech goods.The government should improve the regulation and control powerfor the economy constantly.