China’s international trade has experienced rapid expansion together with its dramatic
economic growth which has made the country target the world as its market. The stable
political system, vast natural resources and abundant skilled labor in China have made
it a modern global factory. Discussions of the role that international trade plays in
promoting economic growth and productivity in particular, have been ongoing since
several decades ago. A core finding from the comprehensive literature shows that
internationally active countries tend to be more productive than countries which only
produce for the domestic market. Due to liberalization and globalization, a country's
economy has become much more closely associated with external factors such as
openness. Thus, conducting a study on the effects of international trade on economic
growth is of great significance in this globalized era. It helps policymakers map out
appropriate policies by determining the source of productivity growth with respect to
international trade.