The Role of Agriculture in Economic Growth: The Case of China

This thesis empirically examines the role of agriculture in China’s economic growth using time series data from 1984 to 2015, specifically investigating the influence of: interest rate, agricultural imports, agricultural exports, and agricultural output on China’s growth of GDP. The study employed Augmented Dickey-Fuller (ADF) unit root tests revealed the above variables are all non-stationary at levels but stationary at first difference. By running the Johansen co integration test, the results show existence of long run relationship among the variables. The vector error correction estimates indicatesthe relationship between the role of agriculture in china’s economic growth and its determinants in the short run. This result shows that the speed of adjustment of the variables towards long run equilibrium path is quite low but it is still an important force for the growth of other sectors. Based on our findings, it is recommended that policies aimed at increasing productivity, quality, imports and exports of agricultural products should be implemented, as it will lead to a higher rate of sustainable economic growth in China. Keywords: Economic growth, agriculture, China.