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The Relations between China’s Economic Growth and Sino-US Trade

Xie, Hao (2008)
Department of Economic History
Abstract
The general theory of international trade points out that the economic growth of a country will be significantly affected by global economic fluctuation if this country shows an increased dependence on foreign countries in the economic field. After the Chinese government adopted reform and opening up policy in 1978, many exciting changes could be seen in this country. Now, although China is still far from being a world economic leading country, no one can ignore that China has made tremendous achievements during the last thirty years. In this process, the United States has a positive influence on China’s economic growth. In 2007, the United States became the most important China’s trade partner and China also came to be the second largest... (More)
The general theory of international trade points out that the economic growth of a country will be significantly affected by global economic fluctuation if this country shows an increased dependence on foreign countries in the economic field. After the Chinese government adopted reform and opening up policy in 1978, many exciting changes could be seen in this country. Now, although China is still far from being a world economic leading country, no one can ignore that China has made tremendous achievements during the last thirty years. In this process, the United States has a positive influence on China’s economic growth. In 2007, the United States became the most important China’s trade partner and China also came to be the second largest trade partner of the United States. With the rapid growth of GDP, the status of foreign trade in China’s economic growth is getting more important than before. China’s ratio of dependence on foreign trade with the United States increased from 8.4% in 1998 to 11.9% in 2007. During this period, although absolute position of the United States in China’s economic growth was increasing, the relative position was actually decreasing. Traditional concept thinks that the influence of exports on China's GDP growth is greater than imports, but the result of regression analysis shows that imports have a greater impact on China's GDP growth than often recognised: China’s GDP will be increased by 0.455497869% if the volume of China’s exports to US is increased by 1%; China’s GDP will be increased by 0.825071613% if the volume of China’s imports from US is increased by 1%. The commodity structure of Sino-US trade, which can partly explain the reason, indicates that most of China’s imports from US are high tech products and capital-intensive products and a large number of China’s exports to US were labor-intensive products or low tech products. I argue that positive influence of China’s imports from US on China’s GDP growth is probably much bigger than what we thought before. (Less)
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author
Xie, Hao
supervisor
organization
year
type
H1 - Master's Degree (One Year)
subject
keywords
economic growth, China, the United States, Social and economic history, Ekonomisk och social historia
language
English
id
1336013
date added to LUP
2008-06-12
date last changed
2010-08-03 10:51:48
@misc{1336013,
  abstract     = {The general theory of international trade points out that the economic growth of a country will be significantly affected by global economic fluctuation if this country shows an increased dependence on foreign countries in the economic field. After the Chinese government adopted reform and opening up policy in 1978, many exciting changes could be seen in this country. Now, although China is still far from being a world economic leading country, no one can ignore that China has made tremendous achievements during the last thirty years. In this process, the United States has a positive influence on China’s economic growth. In 2007, the United States became the most important China’s trade partner and China also came to be the second largest trade partner of the United States. With the rapid growth of GDP, the status of foreign trade in China’s economic growth is getting more important than before. China’s ratio of dependence on foreign trade with the United States increased from 8.4% in 1998 to 11.9% in 2007. During this period, although absolute position of the United States in China’s economic growth was increasing, the relative position was actually decreasing. Traditional concept thinks that the influence of exports on China's GDP growth is greater than imports, but the result of regression analysis shows that imports have a greater impact on China's GDP growth than often recognised: China’s GDP will be increased by 0.455497869% if the volume of China’s exports to US is increased by 1%; China’s GDP will be increased by 0.825071613% if the volume of China’s imports from US is increased by 1%. The commodity structure of Sino-US trade, which can partly explain the reason, indicates that most of China’s imports from US are high tech products and capital-intensive products and a large number of China’s exports to US were labor-intensive products or low tech products. I argue that positive influence of China’s imports from US on China’s GDP growth is probably much bigger than what we thought before.},
  author       = {Xie, Hao},
  keyword      = {economic growth,China,the United States,Social and economic history,Ekonomisk och social historia},
  language     = {eng},
  note         = {Student Paper},
  title        = {The Relations between China’s Economic Growth and Sino-US Trade},
  year         = {2008},
}