Study On The Relationship Between Domestic Free Trade Zones And Regional Economic Growth In China

In the context of regional economic integration and economic globalization,free trade zones play an irreplaceable role in the process of promoting economic growth as an important spatial carrier for the comprehensive opening of the economy to the outside world and a "testing ground" for economic system reform.From the perspective of China’s free trade zone development practice,although significant results have been achieved,there are still problems such as institutional reform lagging behind the high standard of international trade,low degree of economic solidification contribution,and uneven development between regions.Therefore,it is important to study the relationship between China’s free trade zones and regional economic growth as well as the influence mechanism.Firstly,on the basis of combing domestic and foreign literature,starts from the current situation of the development of China’s free trade zones and analyzes the mechanism of the role of China’s free trade zones in influencing regional economic growth through industrial structure upgrading,fixed asset investment and residents’ consumption level based on location theory,industrial agglomeration theory,regional innovation system theory and economic growth theory.Secondly,based on the panel data of the first five batches of 18 provinces and cities that set up free trade zones in 2013-2020,a panel vector autoregressive model is applied to analyze the dynamic relationship between free trade zones and regional economic growth in China.The empirical results show that China’s free trade zones have a positive promotion effect on the regional economic development level characterized by GDP through industrial structure upgrading,fixed asset investment and residential consumption level,i.e.,the establishment of China’s free trade zones is conducive to promoting regional economic growth.Among them: from Granger causality test,it is concluded that there is a two-way causal relationship between industrial structure upgrading,fixed asset investment,resident consumption level and regional economic growth;according to the results of impulse response analysis and variance decomposition,it is clear that regional economic growth is most contributed by fixed asset investment,followed by industrial structure upgrading and finally by resident consumption level.Again,the two cases are analyzed to summarize the value and significance of case promotion,and the study concludes that the establishment of free trade zones is an effective way to enhance regional competitiveness by realizing industrial structure upgrading,promoting fixed asset investment and leaping up the level of residents’ consumption through institutional reform and technological innovation,etc.,thus promoting regional economic growth of high quality.Finally,based on the research findings,the following policy recommendations are put forward: enhance resource allocation efficiency and strengthen the guidance of fixed asset investment;improve technological innovation system to bring into play the benefits of industrial structure upgrading;continue to deepen institutional reform to bring into play the consumption pulling effect;develop the model to suit the needs of the region and actively promote the experience of free trade zones.