On Relationship Between China External And Internal Demand During The International Financial Crisis

In the international financial crisis. China's exports dropped significantly in 2007. the mode of economic growth can not relay completely on external demand-led economic growth. Weak external demand caused by a loss of business, the better option of China is to feed domestic demand in order to continue to drive economic growth. However, as the two major components of China's economy, the relationship between domestic demand and external demand is complex and delicate. The value of this paper, therefore, is to coordinate the relationship between internal and external demand, and promote China's economic growth.This paper mainly researches the relationship between internal and external demand. This paper use the way of qualitative analysis and quantitative analysis, data description and diagram of the method, in order to analyses and study the relationship between internal and external demand since the financial crisis. The first part of this paper explained the transformation of domestic demand, external demand and changes in economic growth. Then, by using quantitative analysis of internal and external needs and economic growth empirical research:on the basis of VAR model, by establishing equation, the Granger causality test and impulse response method used for testing. Finally, by the way of empirical approach, this paper trying to find the relationship between internal and external demand, to achieve the principles of sustainable growth and achieve internal and external demands. Based on the conclusions of the relevant policy recommendations, the final conclusions will draw in this paper.Finally, the paper concludes:the internal and external demand can make both and harmonious development, promote each other, but since the financial crisis, both are restricted each other already, in order to effectively stimulate sustainable domestic growth.