An empirical study on the structural change between the growing rate of defense spending and gdp time series in china

The economic system reform in 1978 had a profound effect on the harmonious development of the defense and the economic construction in china. having the defense expenditure and the annual gdp of china as the empirical data,this paper studied the effect of economic system reform on the harmonious development the defense and the economic construction in china. the result indicates that there was structural change in chinese defense expense growth rate time series and gdp growth rate time series before and after the reform. after the opening and reform,the mean value of defense expense growth rate was falling,and the mean value of gdp growth rate was rising. the sensitivity of gdp growth rate to the change of defense expense growth rate has weakened dramatically,while the sensitivity of defense expense growth rate to the change of gdp growth rate experienced almost no change at all. © 2014 pakistan journal of statistics.