The Impact of China's Final Demand on GDP Formation and Growth
in the Context of Big Data: An Empirical Study based on
Input-output Models
Ping Miao
Shanghai university, Shanghai, China
Keywords: Big Data, GDP Growth, Input Output Research, Final Demand.
Abstract: In recent years, with the continuous improvement of China's comprehensive national strength, China's total
GDP is also growing continuously. It can be found that the final demand has made outstanding contributions
to the formation and growth of GDP. In addition, the arrival of the era of big data has become a new
phenomenon of world economic development, which also marks that the world has entered a new stage of
economic development, and big data has brought the revolution of intelligence and informatization, but the
big data is inseparable from the development of engineering technology. To better serve the society with big
data, we must vigorously develop the information technology. The phenomenon of industrial integration has
been formed in the context of big data. The intelligence and informatization brought by industrial integration
and information technology are essential elements for China to realize economic growth transformation in the
era of big data. Only by making full use of the advantages of the era of big data can we give correct guidance
to economic growth. Therefore, this paper uses big data technology to obtain corresponding data form the
input-output tables in 2012, 2015 and 2017, and through the establishment of mathematical models and the
use of information technical software to calculate the contribution of consumption, investment and export to
GDP formation and growth. Through big data calculation, we find that the final demand has made a great
contribution to the formation and growth of GDP. In terms of promoting GDP growth, investment and
consumption play a greater role. Although the role of export is small, its role is increasing. In terms of GDP
formation, we found that the contribution rate of consumption and investment to GDP formation continued to
rise, while the contribution rate of export to GDP formation decreased.
1 INTRODUCTION
In recent years, China's economy has developed
rapidly and its GDP has been growing. From 2012 to
2017, China's total GDP increased from 53732.9
billion yuan to 8313812 billion yuan, with an increase
rate of 53.36% and an average annual growth rate of
8.93%. It can be seen that China's economic growth
rate is very rapid. Meanwhile, China's consumption
expenditure increased from 2717185766 million yuan
in 2012 to 4441770001 million yuan in 2017, with an
average annual growth rate of 10.33%. In 2012,
China's consumption expenditure accounted for
50.57% of the total GDP of that year, and in 2017,
China's consumption expenditure accounted for
53.43% of the total GDP of that year. Similarly,
China's investment expenditure increased from
24838954 million yuan to 3644602655 million yuan,
with an average annual growth rate of 7.97%. The
export increased from 1366658526 million yuan to
1638468236 million yuan, with an average annual
growth rate of 3.69%. It can be found that the driving
effect of the troika of consumption, investment and
export on China's GDP growth is very obvious.
In the past, many scholars have made research on
the driving effect of final demand on economic
growth. They mainly focus on the driving effect of
one of the three carriages of consumption, investment
and export on economic growth, and draw
corresponding conclusions. Under the background of
Moore's law and exponential growth of data, data and
information technology become more and more
important in social production. The advent of the big
data era has brought about the overall rise of the data
analysis industry. The development of digital
information technology has brought innovation to
data analysis methods. Traditional consumption,
Miao, P.
The Impact of China’s Final Demand on GDP Formation and Growth in the Context of Big Data: An Empirical Study based on Input-output Models.
DOI: 10.5220/0011170100003440
In Proceedings of the International Conference on Big Data Economy and Digital Management (BDEDM 2022), pages 185-189
ISBN: 978-989-758-593-7
Copyright
c
2022 by SCITEPRESS – Science and Technology Publications, Lda. All rights reserved
185
investment and export will be based on accurate data
analysis. This paper fully considers the impact of
consumption, investment and export on economic
growth, uses the input-output tables in 2012, 2015
and 2017, and uses the corresponding input-output
data to calculate the contribution rate of consumption,
investment and export to GDP formation and growth.
2 LITERATURE REVIEW
In recent years, many domestic and foreign
economists have studied the relationship between
final demand and economic growth. Most of them use
input-output table, which can be used as a
manifestation of big data. Firstly, some domestic
economists have made outstanding contributions to
the study of the relationship between final demand
and economic growth. Zhang shaoxue and Jiang
Xuemei (Zhang, Jiang, 2020) found that the
contribution of China's final demand pull effect to the
added value of global economies is increasing. Ji
Ming and Liu Zhibiao (Ji, Liu, 2014)
believes that the
rationalization and upgrading of demand structure
can affect economic growth. (Wu, 2002, Li, Yin,
2005, Wang, Gong, 2007, Guo, 2007, Tian, 2008,
Jing, Wang, 2011, Zhou, 2019) mainly investigate the
optimal consumption rate and reasonable range in
China's economic growth. Ji Ming (Ji, 2010) believes
that the total demand and demand structure will
change in equilibrium with the path of balanced
economic growth. Han Zhong et al (Han, et al, 2018)
used the input-output table to study the impact of
exports on China's economic growth and the
exchange rate created by exports in different sectors.
Lin Yifu established a macroeconomic model with
four equations to calculate the contribution of exports
to GDP growth. Wang Zhili et al (Wang, et al, 2015)
investigated the relationship between China's export
and GDP growth from 1978 to 1998 by using
cointegration and Granger causality test, and
considered that the contribution of export growth to
economic growth was not significant. Liu Xuewu
(Liu, 2000)
studied the relationship between China's
investment, consumption, import and export and
economic growth from 1989 to 1999 by using the
extended C-D production function and cointegration
theory. He believed that export promoted China's
GDP growth in both short and long term.
Secondly, some foreign economists have made
outstanding contributions to the study of the
relationship between final demand and economic
growth. (Chenery, Syrquin, 1975, garegnani,
Trezzini, 2010, garavaglia, 2012)
believe that the
imbalance of demand structure has an adverse impact
on the long-term sustained and balanced economic
growth. Buera & kaboski (Buera, kaboski 2008)
believed that in the research on the relationship
between structural change and economic growth in
different stages of economic development, one
direction in the future should be to combine demand
factors and supply factors to understand the process
of structural change and economic growth. Ghirmay
(Ghirmay, 2001) used the time series data of 15 low-
income developing countries and VECM model to
study the relationship between export, investment and
economic growth. Jordan Shan (Jordan, 1998)
studied the relationship between export and China's
economic growth by using the method of multiple
causality test. Colm (Colm, 1962) believes that
changes in demand will have a significant impact on
supply factors, and paying too much attention to
supply may lead to wrong conclusions.
To sum up, there are various studies on China's
final demand by economists at home and abroad.
Most economists study the impact of one aspect of
final demand on economic growth. Few scholars
study the impact of consumption, investment and
export excluding import factors on economic growth.
Firstly, this paper studies the impact of consumption,
investment and export on the formation and growth
of GDP. Then it is found that the contribution rate of
export to GDP is gradually decreasing. This paper
compares the contribution rate of consumption,
investment and export of each department excluding
the import factor with that of each department not
excluding the import factor to explore the reasons for
the decrease of the contribution rate of export to GDP.
3 METHODS AND DATA
3.1 Derivation of the Model of the
Contribution of Final Demand to
GDP Excluding Import Factors
In order to eliminate the influence of import factors
on the added value of final demand, this paper divides
the input-output table under the open economy into
table 1. Using mathematical model and SPSS
software to calculate based on the data from the input-
output table.
BDEDM 2022 - The International Conference on Big Data Economy and Digital Management
186
Table 1: Input production table format after splitting.
Intermediat
e use
Final
demand
Import
Total
outpu
t
1 2…n Consumption
Capital
formation
Export Total
Domestic
intermediate
investmen
t
1 2…n
𝑥

𝑐
𝑖𝑛
𝑒𝑥
𝑦
𝑥
Import intermediate
inpu
t
1 2…n
𝑥

𝑐
𝑖𝑛
𝑒𝑥
𝑦
𝑖𝑚
Added value
𝑣
Total input
𝑥
The split table satisfies the following relationship:
𝑐
=𝑐
+𝑐
𝑖𝑛
=𝑖𝑛
+𝑖𝑛
𝑒𝑥
=𝑒𝑥
+
𝑒𝑥
𝑦
=𝑦
+𝑦
and:
∑
𝑥

+
𝑦
=𝑖𝑚
(1)
In this type table, we first ask for 𝑥

can further
calculate the added value brought by the final demand
of the domestic part. First, we need to define the
localization coefficient θ, Then the localization
coefficient is diagonalized to obtain 𝑥

.
Order:
𝜃
=
1−(𝑖𝑚
/(𝑥
−𝑒𝑥
)) ⋯ 0
⋮⋱⋮
0⋯1−(𝑖𝑚
/(𝑥
−𝑒𝑥
))
(2)
Based on the localization coefficient and X given
above 𝑥

, we can find 𝑥

is:
𝑥

=𝑥

∗𝜃
(3)
Furthermore, we can also calculate the direct
consumption coefficient 𝑎

of the domestic part.
According to the row balance relation, we can
find 𝑦
=𝑖𝑚
−
∑
𝑥

, about how to find 𝑐
,𝑖𝑛
and 𝑒𝑥
.
Firstly, we assume that imported products are
homogeneous with domestic products. When using
imported products, all departments treat them equally
with domestic products, that is, imported products are
split according to the same proportion. Using the
method used by Shen Lisheng (Shen 2003), we can
find out:
𝑐
=
𝑐
𝑦
∗𝑦
,𝑖𝑛
=
𝑖𝑛
𝑦
∗𝑦
,𝑒𝑥
=
𝑒𝑥
𝑦
∗𝑦
(4)
According to the calculation method above, we
can conclude that the Leontief inverse of the domestic
part is:
(𝐼− 𝐴
)

(5)
According to the method of calculating added
value above, we can calculate the contribution of final
demand to GDP after excluding import factors:
𝛼

=
𝑠𝑢𝑚
(
𝛽

)
𝐺𝐷𝑃
,
(
β=C,IN,EX,t
= 2012,2015,2017
)
(6)
Contribution of a sector to GDP:
𝛼


=
𝛽


𝐺𝐷𝑃
(7)
According to the split input-output table, we can
more intuitively see the impact of the import part on
the final demand. By removing the import factor, we
can more truly reflect the reasons for the decline of
the contribution of exports to GDP. It can truly reflect
the current development of our country.
3.2 Data Description
This paper uses the input-output tables of 2012, 2015
and 2017 as the research data. Since the input-output
table of 2017 is newly released by the Bureau of
statistics, we adjusted more than 100 departments to
42 departments according to the input-output table
format of 12 and 15 years. In order to facilitate the
research of the problem, we split the data of the three
tables into domestic part and imported part in
advance, and verified the correctness of the split
accordingly. The input-output tables in 2012 and
2015 are interfered by other factors. In order to
improve the accuracy of the data, we also included
them in the calculation of the model, taking full
account of the original information of the input-
output table. Next, we bring all the data into the
model to get the corresponding results.
4 RESULTS
4.1 Contribution of Final Demand to
GDP Formation and Growth
By bringing the data into the model, we calculated the
contribution rate of final demand to GDP formation
in 2012, 2015 and 2017, as shown in table 2.
The Impact of China’s Final Demand on GDP Formation and Growth in the Context of Big Data: An Empirical Study based on Input-output
Models
187
Table 2: Contribution rate of final demand to GDP
formation.
Yea
r
Consum
p
tion Investment Export
2012 50.62% 46.27% 25.46%
2015 53.37% 44.58% 21.82%
2017 53.96% 44.27% 19.90%
From table 2, we can see that consumption
contributes the most to the formation of GDP,
followed by investment and finally exports. In table
2, we can see that the contribution of consumption to
GDP increases year by year, while the contribution of
investment and export decreases year by year, and the
decline of export is the largest. We will explain the
specific reasons for this phenomenon later.
Next, we calculate the contribution of final
demand to GDP growth. As shown in table 3.
Table 3: Contribution of final demand to GDP growth.
Yea
r
Export Investment Consumption
2015 8.21% 38.26% 63.65%
2017 10.77% 42.80% 56.76%
It can be concluded from table 3 that the
contribution rate of consumption, investment and
export to GDP growth is very significant. Although
the contribution rate of consumption has decreased, it
is still the backbone to promote GDP growth. Among
them, the pulling effect of investment on GDP growth
is up to about 4.5%, which is related to the gradual
increase of investment income in China in recent
years.
4.2 Contribution of Final Demand
Excluding Import Factors to GDP
Formation
According to the above, the contribution of exports
and investment to GDP formation has decreased year
by year, we give a preliminary explanation. In order
to further explore the causes, we exclude the
influence of import factors. First, to avoid the decline
of investment contribution rate caused by the decline
of import reinvestment; Second, in order to avoid the
decline of the contribution rate of entrepot trade
resulting in the decline of the contribution rate of
export.
Firstly, this paper calculates the contribution rate
of final demand excluding import factors to GDP
formation in 2012, 2015 and 2017, as shown in Figure
1.
Figure 1: The contribution rate of final demand to GDP
after excluding import factors.
It can be seen from figure 1 that after excluding
the import factor, the contribution rate of
consumption to GDP is still increasing and the
contribution rate of export to GDP is still decreasing.
Different from the above, the contribution rate of
investment becomes increasing. This is consistent
with our preliminary explanation. Due to the
reduction of import reinvestment and the sudden
increase of investment in some sectors, the overall
investment contribution rate is decreasing, while
China's internal investment contribution rate is still
rising, which also shows that China's investment in
some foreign advanced equipment and devices is
getting lower and lower.
5 CONCLUSIONS
According to the big data analysis ability, this paper
analyzes the contribution rate of final demand to GDP
formation and growth by using the input-output tables
in 2012, 2015 and 2017. We draw the following
conclusions: in terms of consumption demand,
consumption has the largest contribution to GDP
formation. In terms of investment demand, the
contribution rate of investment to GDP formation is
also very obvious, and we also find that the
contribution rate of investment to GDP continues to
decline with economic growth. In terms of exports,
the contribution rate of exports to GDP formation is
relatively small compared with the first two.
Moreover, we also find that the contribution rate of
exports also continues to decrease with economic
growth. In terms of the pull of final demand on GDP
growth, the pull effect of final demand on economic
growth is very large, in which the pull effect of
consumption and investment is the most obvious,
followed by that of export.
BDEDM 2022 - The International Conference on Big Data Economy and Digital Management
188
In order to explain why the contribution rate of
investment and export to GDP decreases with
economic growth. In this paper, we exclude the
influence of import factors in order to prevent the re
investment of import and the influence of entrepot
trade. After excluding the import factor, we find that
the contribution rate of investment continues to rise,
while the contribution rate of export continues to
decline. For the decline of investment contribution
rate, this paper believes that it may be caused by the
continuous decrease of added value brought by
import reinvestment and the significant decrease of
investment contribution rate of individual
departments. For the decline of export contribution
rate, by comparing the different contribution rates of
consumption, investment and export in some
different sectors, this paper concludes that the decline
of export contribution rate may be caused by the
transfer of export to domestic demand and the sudden
increase of investment in individual sectors, resulting
in the decline of growth value brought by export. In
addition, the decline of export contribution rate may
also be caused by the decline of growth value brought
by unit products, which was proposed by Shen
Lisheng (Shen 2003).
To sum up, through the application of big data
information technology, we get the conclusion that
the impact of final demand on economic growth is
very important. We should rationally distribute
consumption and investment and reasonably adjust
the export structure, so as to promote the rapid
development of China's economy. In addition, this
paper also has some shortcomings. First, this paper
does not calculate the input-output tables in 2013,
2014 and 2016, and then does not reflect the change
of the contribution rate of final demand to GDP in
detail every year. Second, this paper only analyzes
the reasons for the decline of the contribution rate of
export and investment with the help of the
contribution rate of final demand to GDP, and does
not take into account the factors such as the decline
of growth value per unit product proposed by Shen
Lisheng (Shen 2003). In addition, we must vigorously
develop education, improve the quality of the whole
people, and let the whole people better master modern
information and networking means and the ability to
obtain data and knowledge, so as to ensure that the
economic growth in the big data era is supported by
high-quality human resources and information
technology, and promote the formation of a new
growth model in the big data era.
REFERENCES
Buera, F. & J. Kaboski, 2008, “Can Traditional Theories of
Structural Change Fit the Date”, WorkingPaper,
Presented at the 2008 Congress of the EEA, Milan,
Italy.
Garavaglia, P.Malerba, F.Orsenigo, L.Pezzoni, M, 2012,
“Technological Regimes and Demand Structure inthe
Evolution of the Pharmaceutical Industry”, Journal of
Evolutionary Economics, 22(4), pp.677-709.
Han Zhong, Chen Yaohui, Shi Yun. Calculation and
decomposition of consumption carbon emissions from
the perspective of international final demand. Research
on quantitative economy and technical economy, 2018
(7): 114-129.
Ji Ming, Liu Zhibiao. The impact of the evolution of
China's demand structure on economic growth and
economic fluctuations. Economic science, 2014 (1):
10-22.
Ji Ming. Demand change and economic growth: theoretical
explanation and China's empirical. Economic science,
2010 (6): 18-29.
Liu Xuewu. Investment, consumption, international trade
and China's economic growth: An Empirical Analysis
from 1989 to 1999. World economy, 2000.
Shen Lisheng, Wu Zhenyu. Contribution of export to
China's GDP growth -- An Empirical Analysis Based
on input-output table. Economic research, 2003.
Teame Ghirmay, Richard Grabowski, and Subhash C.
Sharma, 2001, “Export, Investment, Efficiency and
Economic Growth in LDC: anEmpirical Investigation”,
Applied Economics, 33, pp.689-700.
Wang Dihai, Gong Liutang. Consumption and savings in
growing economy. Financial research, 2007.
Wang Zhili, Zhuang ya'er, Yao Liang. Study on the
employment pulling effect of China's regional final
demand and export activities. Population journal,
2015:103-110.
Wu Zhongqun. Determination of consumption and
investment in China's economic growth. Chinese Social
Sciences, 2002.
Zhang shaoxue, Jiang Xuemei. Heterogeneity analysis of
the pulling effect of China's final demand on the added
value of different economies. Journal of Xi'an
University of Finance and economics, 2020 (3): 62-70.
Zhou Wen. Reasons and Countermeasures for the decline
of employment efficiency driven by final demand.
Journal of Yunnan University of Finance and
economics, 2019 (9): 41-54.
The Impact of China’s Final Demand on GDP Formation and Growth in the Context of Big Data: An Empirical Study based on Input-output
Models
189