A Study On The Relationship Between Trade Openness,Government Scale And Economic Growth

The relationship between trade openness and economic growth,the relationship between government scale and economic growth and the relationship between trade openness and government scale have always been the subjects scholars keen to research.Based on the research achievements scholars have done,this paper extends the research object to the relationship between trade openness,government scale and economic growth,and carries out regionalization discussion and empirical research on China's 31 provincial administrative units with different methods and data.Since the reform and opening up,China's foreign trade has developed rapidly.In 1978,China's total foreign trade volume was only 20.64 billion dollars,accounting for less than one percent of the world's total trade,ranking number 29 in the world;China's total foreign trade in 2014 has been close to 4301.53 billion dollars,increasing by nearly 207.4 times compared with the beginning of the reform and opening up,accounting for about 12.2%of world trade,the world ranking jumping to the second from the 29th,becoming the second largest trading nation after the United States.Meanwhile,the reform and opening up has been implemented for more than 30 years and China's economic development has also made outstanding achievements.In 1978,China's GDP was 367.9 billion,but increased by 186.3 times to 68.9052 trillion yuan in 2014.The world ranking of China's economic growth has risen from the ninth to the second in 1978,becoming the second largest economy after the United States.From the data,it's easy to find that there seems to be a certain correlation between the development of China's foreign trade and the growth of total economy.Apart from the foreign trade,China's economic development is inseparable from the influence of government scale.In detail,In the era of planned economy,China's government plays an absolute leading role in economic development.After the reform of the market economy system,resources were absolutely dominated by the market.The government's functions were to make up for the shortage of the market,strengthen the financial expenditure of the social security system,improve the social guarantee system and reduce the risk of market transactions.This paper aims at exploring the relationship between trade openness,government scale and economic development.In the case of each of which may have an impact on the other two aspects,the paper studies how to deal with trade-offs to make the trade openness and the government scale develop in the direction of a sustainable and healthy economy.This paper constructs the paradigm of "variable description-econometric test-effect evaluation" by comparing the 31 provincial administrative units in China from a sample period of 2000-2014,and comparatively quantifies the impacts of trade openness and government scale on regional economic growth in the eastern,central and western regions.Additionally,this study analyzes the dynamic changes of the degree of trade openness and government scale from the temporal dimension by combining the growth rate of trade openness,the government scale expansion rate and the economic growth rate as the quantitative indexes of the variables;Combining the regional differences between the east,the central and the west,this paper also elucidates the spatial correlation and gradient of regional economic growth from the spatial dimension.Through the PVAR model analysis,the joint influencing factors and effects of economic growth are identified on the general level;Combining the impulse response analysis and variance decomposition,this paper decomposes and quantifies the short-term disturbance factors,long-term equilibrium state and its route of the economic growth in the east,central and west;On the previous basis,Granger causality test is examined to further clarify the original dynamic and interactive mechanism of the economic growth.In this paper,we find that:(1)Trade openness,government scale and economic growth have rich dynamic changes in the sample period,and there are significant correlations in the process of change;(2)There is a double reverse mechanism between trade openness and government scale,that is,"efficiency effect" and "compensation effect" coexist;(3)The regional difference of trade openness is the intrinsic incentive of the gradient feature of China's economic growth,which is the important driving force of the regional development gap;(4)Growth has a feedback on trade openness and government scale.And there are two kinds of equilibrium states:"high degree of open trade,fast economic growth" and "low degree of open trade and slow economic growth".Based on what's stated above,following suggestions are put forward:deepening the degree of trade openness among regions,and accelerating the construction of open highland in the central and western regions from two perspectives of "eastward opening" and "international convergence";reasonably defining the boundary between market and government,increasing financial support for the central and western regions,and playing the interactive role of government scale in the degree of trade openness and functioning the "compensatory effectr" of market resource allocation to complete the transition and convergence of the equilibrium state from "low degree of open trade,slow economic growth" in the western regions to "high degree of open trade,fast economic growth" in the east regions.