Time Series and Cyclical Analysis on Chinese GDP Growth in 2003-2022

Abstract

This paper analyzes the trend of China's GDP from 2003 to 2022 using time series analysis, detrending and business cycle method. It highlights the importance of government investment in infrastructure and human capital to enhance efficiency in the Chinese economy. The paper finds that consumption, investment, and government consumption are highly positively correlated with GDP, suggesting that the government can stimulate the economy by increasing mass consumption, business investment, and government purchases. However, the value of net exports, which depends on the simultaneous changes of export value and import value, has great uncertainty and makes it difficult for the government to stimulate the economy through changes in net exports. Furthermore, the paper suggests that the priority in stimulating the economy should be given to increasing government consumption, followed by consumption and investment. The paper proposes several stimulus measures, including increasing infrastructure construction, issuing consumer vouchers, and reducing interest rates for business loans. These measures aim to boost government consumption, stimulate consumption, and encourage business investment, ultimately contributing to economic growth and development.