Impact analysis of trade openness on China’s economic growth

Yan-Liang Liu

Bohai University, BoHai City, LiaoNing Province, China, 121013

Trade openness plays can affect China’s economy significantly. In this paper, effect of trade openness on China’s economic growth was discussed by using the error correction model, Granger causality test and impulse-response function. Moreover, an in-depth analysis on strategies that can facilitate China’s economic development was carried out. The empirical research results demonstrated that: 1) there’s a short-run equilibrium relationship rather than a long-run one between trade openness and economic growth; 2) the import trade is related with the export trade. Due to the hedging, their collaborative effect is smaller than their independent effects; 3) trade openness can facilitate economic growth within a certain time period, which presents a “U-shaped” influence mode.