The Research On The Relationship Between The Three KeyDemands And Economic Growth Of Hebei Province

The relationship between Investment, consumption, net export and economic growth isthe most basic and most important problem in the macroeconomic. The reasonability of theirsize and structure will affect all aspects of a region’s economic, especially economicsustainability and stability in long term. So, all the macroeconomic subjects attaché greatimportance to the situation of investment, consumption and net export in their own zones.They developed a number of indicators to reflect the respective size, structure of investment,consumption, net exports, in order to study the region’s economic development andcoordination.Hebei Province is in the new era of transformation of economic development mode now.While the economic growth of Hebei Province has made a great progress, the economicstructure is not reasonable, it is bound to affect the long-term economic growth in HebeiProvince. Accordingly, this paper focuses on the following questions:First, I measure the role of the three major demands on economic growth at this stage ofHebei Province, then get the ratio of the three demands, the contribution rate of the threedemand and stimulating degree. The analysis results in Hebei province’s GDP is that thelargest is the rate of investment, followed by the rate of consumption and the net outflow, butin the sight of the contribution and pulling degree,consumer demand is slightly higher thaninvestment demand.Then, using co-integration analysis and error correction model we confirm the long-termand short-term dynamic relationship between the three demands and economic growth, andconclude that the consumer demand play the most important role in the economic growth ofHebei Province, no matter in long-term or short-term. Due to the contradictory of the aboveanalysis, we conclude that Hebei province should focus on adjusting the ratio betweenconsumption and investment in the future, and strengthen the role of foreign trade. Therefore,this paper then using principal component regression analyzes the structure of consumerdemand and the relationship between the foreign trade and economic growth. Finally, the paper puts forward some feasible countermeasures and suggestions.