IJCATR Volume 7 Issue 6

An Empirical Study on the Relationship between Economic Openness and Economic Growth in China

Mengshan Zhu
10.7753/IJCATR0706.1001
keywords : Economic opening; Financial development; Chinese economic growth; Empirical analysis

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Economic openness is the measure of economic activity in the country comprehensive index. How is economic openness indicator measured? Chinese economy has experienced rapid growth for more many years, what is on earth the effect of economic opening on Chinese economic growth? The answer to this question will provide instructive revelation about the selection of Chinese reasonable opening policy. Economic openness is measured by trade openness, foreign investment openness and financial openness in this paper. Based on Solow economic growth model and beginning with foreign trade, foreign investment and financial development, this paper made regression analysis using Chinese data from 1985 to 2004. The empirical analysis indicates that the domestic capital input is still the primary element that promotes Chinese economic growth, by contrast, the effect of foreign trade and foreign investment on Chinese economic growth is faint. Again, financial development on the impetus of economic growth in China has a room to rise.
@artical{m762018ijcatr07061001,
Title = "An Empirical Study on the Relationship between Economic Openness and Economic Growth in China",
Journal ="International Journal of Computer Applications Technology and Research(IJCATR)",
Volume = "7",
Issue ="6",
Pages ="203 - 240",
Year = "2018",
Authors ="Mengshan Zhu"}
  • The paper proposes an analysis framework of China's economic openness index system
  • Domestic capital investment is still the primary factor promoting China's economic growth
  • The effect of foreign trade and foreign investment on Chinese economic growth is faint
  • There is still room for finance to stimulate China’s economic growth.