Export-led or household consumption-led growth in China: An empirical analysis

Abstract. GDP growth dependence on various factors of the country during (1980-2013) 34 years has been estimated. Ordinary Least Squares Technique of regression is applied here. The results are indicative of incidence of devaluation in the Yuan taking real effective and nominal exchange rate. Further, incidence of systematic impact of capital formation on GDP growth is greater than that of the international trade and domestic household consumption expenditure. That signifies the importance of domestic economy in contrast to the general belief of external sector dependence of the Chinese growth. Keywords. Currency devaluation, GDP growth, Regression. JEL. F13, F43, O47, E21.