Research On Domestic Demand-led Economic Growth Mode In Open Economy

More than 30 years since reform and opening up,China's economy and comprehensive national strength has been greatly enhanced.China is playing an increasingly important role in the international political and economic arena. Moreover,China is also increasingly depending on the world economy and global financial market.Because of the financial crisis in 2008,China's exportation is deteriorating due to the external environment.The crisis exerts significant impact on China's economy.The GDP growth rate of China dropped to 6.1%in the first quarter of 2009.The economic growth mode that mainly relies on exports and investment can not adapt to China's economic stability and development."We must speed up the establishment of domestic demand-oriented and external demand-pulled economy to drive economic growth so that China's economy can diverge to more balanced pattern of economic growth." Premier Wen Jiabao said at the Annual Conference of Boao Forum for Asia in 2009.Therefore,it is an important theoretical and practical issue to diverge China's export-led growth to domestic demand-led mode.Based on reviewing the literature of domestic and foreign scholars,this paper studies the economic driving force of five countries and China with gray relative analysis method.The empirical results of this paper show that the domestic consumer demand is the impetus of five countries and China.In the background of China's further reform and opening up,it is crucial to establish domestic demand-led economic growth mode in open economy.This paper focuses on how to expand domestic demand in open economy.Through foreign trade,foreign investment,labor services transfer can increase employment in open economy.Through improvement of industrial organization,independent innovation and introduction of venture capital can enhance competitiveness of industries.Through regional financial cooperation, financial innovation and development of financial services can strengthen China's financial strength.Only these measures can China achieve a smooth transition of economic growth mode.There may be some conflicts during transition of economic growth mode in the open economy such as lower levels of well-being of consumers, greater pressure on inflation and increased trade friction with neighboring countries. Through policy of reform and opening up,foreign trade,independent innovation, government's macro regulation and broadening of fund-raising channels can solve the problems.Finally,this paper studies the policy coordination of domestic demand-led economic growth mode in terms of economic restructuring,improvement of people's livelihood and financial reform.