The Co-integration Analysis of Relationship between Industrial Economy and Gross National Product of China

In order to analysis the relationship between the Gross National Product and the variables of the industrial economy. Based on the related data of China's GNP and Industrial Economy from 1978-2014, the relationship of between China's GNP and the variables of the industrial economy was analyzed by adopting the methods of econometric analysis of co-integration test, error correction model and Granger causality test method. The result showed that: 1) The Industrial Economy variables have positive on GNP except the primary industry; 2) When the short-term volatility deviated from the long-term equilibrium, the system would adjust the non-equilibrium state with intensity of 0.1050 back to the equilibrium. 3) Under the Granger causality, the GNP and primary industry, the secondary industry, the tertiary industry growth showed the individual Granger causality relationship. Finally, some advice was proposed to promote the GNP and to coordinate the growth of variables industrial economy together.