Interactive Development Between The Evolution Of Industrial Structure And Urbanization: Theories And Policies

Evolution of industrial structure and urbanization are the two major themes of economic development. Benign interaction between industrial structure evolution and urbanization is the basis for economic structure optimization and healthy economic development. Currently advanced countries have generally entered the post-industrialization period, and their directions of industrial structure evolution, tasks of urbanization and the key points of the interaction all represent new features and trends; as to developing countries, due to extensive differences, their industrialization and urbanization processes are definitely not just simple repetition of advanced countries, but the interaction between their industrial structure evolution and urbanization is facing new challenges. How to realize harmonized development of industrial structure evolution and urbanization in mutual promotion is a major issue that all countries in any development stage need to initiatively consider and well solve.Industrial structure evolution and urbanization are two fields in which both Chinese and foreign scholars pay common attention, make repeated demonstration and continuously have break-through and innovations. Research on the relationship between industrial structure evolution and urbanization under one-way linear mode, with the view angle of structure transformation theory, focuses on industrial development and emphasizes that industrial structure evolution is the fundamental drive force for urbanization, while considering urbanization as a by-product of industrialization. Urban research had once disappeared from the visual field of main stream economics. As the space element has been introduced into the analysis framework of economics, the effects of urbanization have been gradually re-excavated. Relevant research not only emphasizes that industrial structure evolution is the fundamental drive force for urbanization, but also recognizes the positive effects of urbanization on industrial structure evolution, and thus forms a two-way interactive research normal form. After the rise of research on urban agglomeration economy, besides static agglomeration economy effect, dynamic agglomeration economy formed in cities gradually became an important theoretic basis of the research on the relationship between urban development, urbanization and economic development, industrial structure transformation. On such basis, this paper is about the research on the theories and policies concerning interactive development of industrial structure evolution and urbanization.Urbanization is a concept with very rich connotation. Most research only defines urbanization with the process of transformation from rural area to urban area. But such definition has great limitations, not only theoretically it can hardly represent the urbanization of post-industrial countries, but also it can easily cause mistakes and deviations in practice. While defining the concept of urbanization, this paper deems that urbanization should be the unification of quantitative extension and qualitative connotation. And in concept industrial structure evolution should also be the unification of quantitative proportion change and structure supererogation. On such basis, this paper makes a theoretic research on the interactive development.Industrial structure evolution and urbanization are like twin brothers, and interaction is the inevitable outcome of their intrinsic relationships. This paper argues that the micro-basis of the interaction between industrial structure evolution and urbanization is actually the mechanism of "technological innovation-factor mobility-agglomeration". Technological innovation leads to factor mobility while factor mobility results in unbalanced geographical agglomeration; and factor mobility and technological innovation would be affected by agglomeration effect, thus the interactive relationship of these three is formed. During their interaction process, the interaction between industrial structure evolution and urbanization would be realized: industrial structure evolution is the external expression of industrial structure supererogation based on technological innovation as well as the industrial quantitative proportion change caused by factor mobility among different industrial sectors; while factor mobility and agglomeration across geographical space and the requirements of factor agglomeration on its carrier’s functions could be expressed as extension-oriented urbanization and connotation-oriented urbanization; Meantime, along with improvement of the urbanization level, urban agglomeration economy will gradually improve. Thus, the evolution of industrial structure would promote urbanization, while urbanization would also support the evolution of industrial structure.Through analysis of the internal interactive mechanism, this paper further studies the approaches of interaction between industrial structure evolution and urbanization. It’s believed there are three approaches to achieve interaction:the first approach is "evolution of industrial structure-factor mobility-promoting urbanization". From the viewpoint of mobility dimensions, the economic factor mobility among different industrial sectors and its transfer across geographical space caused by the evolution of industrial structure would actually promote the healthy development of urbanization; along with the evolution of industrial structure, there will be competition and .substitution between basic factors and advanced factors, and respectively, they will become the "main character" of the mobility in different stages of the evolution, thus urbanization would be affected. The second approach is "evolution of industrial structure-transformation of urban function-promoting urbanization". The city’s leading industry determines urban function, the evolution of industrial structure pushes urban function experiencing from single pattern to complex one while the urban leading function evolving from low-level to high-level. Moreover, the transformation of urban function injects new vitality and impetus into urban development, making it entering a new stage. The third approach is "urbanization-improving urban agglomeration economy-supporting industrial structure evolution". The healthy and orderly development of urbanization could enhance urban agglomeration economy. Based on its role played in factor supply and market demand, the static agglomeration effects of urbanization could sustain and drive the evolution of industrial structure; and based on its positive roles in technological innovation, the dynamic agglomeration effects of urbanization could boost the evolution of industrial structure.The evolution of industrial structure and urbanization could promote each other and achieve endogenous development, but in reality there is no convergence trend of the development of different countries, i.e. different countries and regions present different interactions and operation performances in the evolution of industrial structure and urbanization. To solve this problem, this paper firstly judges and analyzes the specific interactions that may exist. The fundamental purpose of interactive development is to achieve progressive evolution of industrial structure and sustained development of urbanization, its important prerequisite is proper coordination between the industrial structure and urbanization. Thus, there are two external characteristics for the interactive relationship that couldn’t be measured directly:coordination level of the industrial structure and urbanization, the capacity of sustained interactive development. Through the judgment from these two aspects, the specific condition of interaction could be roughly distinguished into three types:the unhealthy interaction of weak coordination and low sustained interactive ability; the unhealthy interaction of weak coordination and high sustained interactive ability; the healthy interaction of strong coordination and high sustained interactive ability. Secondly, the paper makes detailed study about influencing factors of interaction and deems that there are four factors to explain the differences of interaction:Factor Endowment-the constraints or advantages of population, capital, resources and other factors in the industrial development and urbanization; Extraversion Scale-supply and demand in the international market and the impacts on domestic industrial structure and urbanization; Institutional Arrangement-Is the interactive development driven under a correct institutional framework or is it distorted in an inefficient environment; Policy Orientation-the impacts of government’s economic development strategy, industrial policy, urban development strategy on the interaction mechanism.China’s interactive development between industrial structure evolution and urbanization has specific characteristics. China’s post-crisis economic transformation is closely related with industrial structure optimization and upgrading as well as urbanization process. By studies on 60 years of industrial structure evolution and urbanization interaction process after the founding of China, the paper argues:in the first three decades before reform and opening up, it presents the unhealthy interaction of weak coordination and low sustained interactive ability between the industrial structure evolution and urbanization, and the interaction was serious influenced by government intervention under with less contacts with the world. While in the second three decades, coordination level of the industrial structure and urbanization improves, but it still presents unhealthy interaction of low sustained interactive ability, as the interaction is impacted and influenced by foreign capital and trade in the open environment. As a result, China’s industrial structure evolution and urbanization interaction have been strongly affected by external force during these six decades. Currently, the key for further promotion of Chinese interaction between industrial structure and urbanization to a healthy state is gradual development of endogenous interaction, enhancing innovation for the progressive evolution of industrial structure, exerting positive effects of urbanization, and improvement of interaction mechanism as well. This paper gives two policy suggestions:the first suggestion is that we should effectively improve independent innovation capabilities as well as develop strategic emerging industries and services industry, and develop a collection of major cities into distinctive highlands of producer services by urban agglomeration development with adherence to connotative development; the second suggestion is that we should make urbanization as the focus of consumption expansion, and develop small and medium cities and counties outside the metropolitan area to further enhance urbanization level, actively improve the city’s bearing capacity and strengthen institutional innovation to change semi-urban status and enhance the quality of urbanization.