Economic Growth in China: During the Period of 1980-2003

Prior to China’s open-door policy, China was considered among one of the worlds’ most isolated economies. However, that changed when they allowed the market force to go before central planning, and decided on an outward orientation for their development strategy. This was a sign indicating that China allowed foreign trade to play a leading role in its economic development. This thesis, with the help of income terms of trade (ITT) and GDP per capita, aim to study if there is any relation between trade and growth in China during 1980-2003. The purpose is with help of the econometric tool, time series, to find a positive correlation between these variables. ITT include both the value of exports and imports. That is why the theory ITT is being used for this thesis, since the theory indicates that exports alone cannot explain growth if imports is not considered as well…


1 Introduction – China
1.1 The research problem
1.2 Outline of the thesis
2 Theoretical framework
2.1 Trade-induced investment-led growth
2.2 The effects of growth on trade
2.3 The income terms of trade
2.4 Summary
3 Empirical study – China
3.1 Model formulation – Time series
3.2 Empirical result
4 Conclusion
5 Recommendation for further research

Author: Cicek, Sevim

Source: Jönköping University

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