A Time Series Analysis of the Determinants of Globalization in the Chinese Economy

The Chinese economy has undergone significant structural transformations in the past decade. By opening up the economy and attracting foreign capital investments, China has gained substantial momentum in recent years. Undoubtedly, globalization has played a crucial role in this success. This study empirically analyzes the dynamics of globalization in the Chinese economy over the period of 1990-2021. It examines the impact of financial development, ICT, fiscal policy, and trade openness on globalization. The study utilizes the ADF and PP tests for unit root analysis, and the ARDL bounds test is applied to evaluate cointegration. Long-term estimates are derived using the DOLS estimator. The study identifies a cointegration relationship among the series, providing evidence that financial development, ICT, fiscal policy, and trade openness positively affect and enhance globalization. Policy recommendations can be made for Chinese policymakers to further strengthen globalization.