The Research On China's Economic Growth And Human Capital Investment

Human capital that comes from human capital investment takes great effects on economic growth in 21st century knowledge economy era. On the basis of the formulization of human capital investment theoretic, this paper analyses the feature, form and subject between human capital investment and the formation of human capital, then compares the present situation of them vertically and horizontally. In an international way, the degree, the outlay and the structure of education investment in China are under the average lever in the world. Although human capital investment and the accumulation of human capital increases continuously, compare to the other countries especially developed countries there is a large gap.. And it draws a conclusion that human capital investment in our country lacks flexibility. It measures the relation between human capital investment and economic growth quantitatively on the basis of Solow's growth model and concludes that material capital investment is still the most important factor to improve China's economic growth and human capital (education) investment is the other one. But the contribution of labour force growth to economy remains negative, which accounts for that the economy growth in China mainly depends on the external way other than the advancement of science and technology, or the enhancement of labour quality. In the regression analysis of the data of each province, it reaches a conclusion that human capital investment has an obvious positive correlation to economic growth but in some province of the west area, human capital investment has an absence correlation to economic growth while capital asserts investment has an obvious positive correlation to it, which is due to the little human capital investment, the few human capital deposit, and the persons with ability strictly running off. The paper also proves that most provinces' labour force growth has a negative correlation to economic growth. Finally, it presents several proposals on the strategy of human capital investment in order to promote economic growth in China, such as reinforcing the government force of education investment, adjusting the direction of the investment, strengthening the social force of investment in many-side which focuses on the compulsory education, expediting the reform of the personnel management system, promoting the capitalization of manpower and making it flow orderly.