Shanghai Foreign Trade And Local Economic Growth Relations

International Trade, also called external trade, is the activities of exchanging goods, services and producton factors between nations and regions. It can usually produce the effect of prompting the economic development of certain country or region, by which many developed countries have made their fortune, raised their power and created welfare for their people as well. China started to implement the "Reform and Open-Up policy" in 1978 and has whereby made huge economic achievement. As a typical extroverted city along Chinese east coast, Shanghai has reflected above facts by large. And, it is believed external trade has played an exceedingly important role in Shanghai's economic development process.This article is aiming at finding the internal relationship between Shanghai's economic growth and its foreign trade. Through analyzing related data of economic growth and foreign trade since 1978, the author would like to find the internal mechanism between these two variables by carrying on empirical study with the methods of ADF proof-test, cointegration analysis, cause-effect relationship proof-test and ECM model. Hopefully, the finding will more or less provide some reference for the policy-makers.