| The question of the role of export in economic growth is not only a subject of studying with extensive dispute in economic, but the theoretical foundation that developing countries make trade policies. Since Chinese Reforming and Opening Policy, the foil speed growth of Chinese economy with the powerful expansions of export made China rank among High Performing Asian Economies, HPAEs, and at the same time, China was stuck to the label of export-led economy. The export-led growth hypothesis assumes that export growth is a decisive factor of economic growth. It means that the net total export values of one country (growth rate and fluctuating compositions, etc) have remarkable influence on the total values of real GDP (growth rate and fluctuating compositions, etc ) on statistics. It indicates that the economic growth of one country has certain foreign trade dependences, and also its product market, capital market and labor market... will be influenced by international market. The empirical test on export-led growth hypothesis is an important subject of economic field in the past 20 years. Although economists have done a large amount, there was no final conclusion of the relationship of export growth and economic growth. As we all know the relationship of export trade and economic growth is very complicated, such as price fluctuation, investment environment and political situation... will all have a very great impact on their relationship. The paper tests the export-led growth hypothesis on the basis of times series data from China from the year 1978 to 2003. The Granger causality procedure was applied to test the causality link between exports and economic growth in a three-variable VAR system after the cointegration test. The paper is divided into four chapters altogether. Chapter one first introduces some existing theories of economic growth briefly, and the new development in econometrics and empirical tests of these theories. At the same time, we also enumerate and analyze the situation of imports, exports and economic growth in China. Since 20 years of China Reforming and Opening Policy, our economy has achieved the world interest. The fast export and GDP growth made us already ranked among ten major exported countries of the world. The paper gives a series of data and graphs to describe the development. Furthermore, we analyze the relationship of imports, exports and economic growth on theories. First definite what is export-led economic model and what is export-led growth hypothesis. And then, give the scholars' main explanations and four kinds of views of their relations at present. Chapter two Review the main theories and documents of export-led growth hypothesis in the past. Broadly speaking, the studies on the export-growth relationship can be categorized into two groups: (i) those based on cross-country data, and (ii) those based on time series data. The main arguments against cross section data analysis and in favor of times series analysis have been that cross-country studiesimplicitly impose or assume a common economic structure and similar production technology across different countries which is most likely not true, and further, economic growth of a country is influenced not only by exports and other factors inputs, but also by host of domestic policies such as monetary, fiscal and external policies. Despite some developments in cross-section data analysis to improve the power of the test based on cross section data, the significance of the conclusion drawing from cross section data is still subject to some debate in finding a long run causal relationship in the data. However, in recent years an increasing number of studies have relied on time series data, as opposed to the cross section data analysis. And the most extensive one was Granger causality test. Most conclusions of time series limited supported the hypothesis, or refused the hypothesis, or had the result of bidirectional causality between real export and real GDP. The reason why there were so many conclusions was due to different kinds of test models. Chapter three tests the export-led growth hypothesis on the basis of times series data from China from the year 1978 to 2003. The Granger causality procedure was applied to test the causality link between exports and economic growth in a three-variable VAR system after the cointegration test. First we indicates that the natural logarithms of real GDP, y, the real exports, x, and the real imports, m. And then have ADF test on them and their first difference, get that horizontal arrays y, x, m are all 1(1), and their first difference is 7(0). Next, carry on the cointegration test. We find that the three variableshave the only cointegration relationship. In other word, there exists a long-term dynamic equilibrium between real exports, real imports and real GDP. Here is the cointegration error equation: et = Yt-0.9937X, + 0.4434M, -2.2838 Followed by Granger causality test between the three variables. The equations are: From the results, there is no causality relationship between real exports, real imports and real GDP. That is to say export, import and GDP growth are all the results of economic development and the changes of economic structures. Chapter four utilizes the test result, according to the real characteristic of the economic growth of our country, analyses the relationship between economic growth and imports and exports. Because our economic structure is changing from supplying retraining to the demand, the above-mentioned three variables have no causality influence among each other. But we can't deny the role of imports and exports growth on economic growth. As a developing country, we must adopt the neutral trade policy. While expanding export, keep the appropriate import growth, and try to keep the relative balance of...
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