Economic Effect Of New Urbanization In China:Theory, Empirical Analysis And Countermeasures

Under the complicated situation that world economy is rebalancing and readjusting, China’s economic development is strife-torn, economic growth’s downward pressure is increasing, economic transformation faces multiple challenges. How to resolve these negative factors to ensure sustainable development of China’s economy, the key is to seek new growth momentum and new ways to lead sustained economic growth. New urbanization contains huge domestic demand, and it can stimulate domestic demand, promote industrial transformation and upgrading, and improve the livelihood of the people. And it also has huge potential to resolve various bottleneck problems of economic development, which can generate far-reaching impact on sustainable economic development. It is a new engine to lead economy sustainable and healthy development for quite a long period in the future. Therefore, this paper studied the economic effects of new urbanization in China from the perspectives of theory, empirical analyses and countermeasures. It focused on studying the feasibility and effectiveness of new urbanization to break the bottleneck of China’s economic development, and explored the inherent law and strategy selection of leveraging new urbanization to promote coordinated and sustainable economic development.Based on the new challenges of China’s economic development, the paper comprehensively studied the development process and practical difficulties of urbanization, proposed that new urbanization is an inevitable choice for transformation development and the correction and optimization of traditional urbanization, so this paper built a new urbanization index system in terms of the economic foundation, population growth, social functions and environmental quality based on the connotation of new urbanization, and then scientifically measured and objectively evaluated the level of new urbanization. On the basis of above, the paper empirically analyzed economic effect of new urbanization from multiple perspectives.First of all, the paper empirically studied the effect of new urbanization on China’s economic growth, and the results showed that new urbanization always had a significant positive impact on economic growth in time dimension, and it had a significant positive impact in eastern region, while in the middle and western regions it had positive coefficient but not significant, which showed that the level of urbanization in the middle and western regions was still not across a "threshold" to impetus economic growth. There may be some potential conduction paths to promote economic growth in the middle and western regions, so this paper then analyzed the three potential paths of new urbanization on economic growth. The paper found that the path of consumption and investment of new urbanization were the main ways to promote economic growth, the path of industrial structure upgrading hindered the economic growth, which indicated that the path of industrial structure upgrading of new urbanization strongly haven’t promoted economic growth in the middle and western regions yet.The new urbanization is a powerful engine of driving economic growth, is a major strategy of economic and social development, and is also a comprehensive institutional innovation and structural adjustment, which can expand residents’ consumer demand, promote industrial upgrading, break the dual structure, optimize government investment, and improve the quality of public service supply. That is, new urbanization has dual economic effect of growth and development for China’s economic and social development. Therefore, this paper mainly studied these effects of new urbanization, including residents’ consumption, industrial structure upgrading the income gap between urban and rural areas, and public service supply, to draw some basic conclusions which have theoretical value and practical significance.Firstly, the new urbanization must carry out institutional innovation, which will release the huge consumer’s demand effectively. So the paper studied the effect of new urbanization and system changes on household consumption growth by using the panel data of China’s provinces. The results showed that new urbanization had significantly positive effect on household consumption growth, and three system changes (including land, household registration and social security system) were not obvious, even existed the hindering effect. Further lag effects model and synthesis effects model also supported this conclusion, which showed that the current three systems had become the bottleneck to hinder new urbanization and the growth of household consumption.Secondly, new urbanization and industry is interacting, namely new urbanization needs flourish industry as support, but whether new urbanization can promote industrial upgrading or not? Based on this question, the paper analyzed the effect of new urbanization on industrial structure upgrading using quantile regression. The results showed that new urbanization had significant effect in promoting industrial structure upgrading on all quantile point, and existed significant regional differences. With quantile point from low to high, the coefficients of new urbanization showed an increasing trend, namely that the higher level of industrial structure was, the stronger effect was. In addition, technical progress had a significant effect in the eastern region, but this effect was not obvious in the middle region, meanwhile, in the western it depended on the quantile point.Thirdly, the traditional urbanization does not narrow the urban-rural income gap automatically. New urbanization adheres to "people-oriented", focuses on connotation development, and breaks the bottleneck which hinders the integration development of the urban and rural by innovating institution, solves the income gap problem. Based on the theoretically urban-rural income model, under the new urbanization strategy uncompromised, the paper carried out theoretical analysis and empirical test for interactive mechanism of new urbanization and urban-rural income gap. The empirical results showed that the new urbanization had significant effect on narrowing the income gap between the urban and rural, while new urbanization received positive feedback from narrowing the income gap between the urban and rural.Fourthly, new urbanization is the urbanization of "people", not only focus on efficiency, but also equity. It can optimize government investment, improve public services supply, accelerate the process of migrant worker1 citizenship, and promote equalization of public service in urban and rural areas. Therefore, this paper studied the relationship between new urbanization, financial capacity and public service supply, and found that new urbanization had obvious regional differentiation characteristics on public service supply. The further analysis of the threshold effect of public service supply was made, and found that with the development of economy, the effect of urbanization on transport infrastructure service was weaken gradually, and the effect on education and health services was increased gradually. The effect of fiscal domination capacity on transport infrastructure and health services showed an inverted U-shape feature, and had a decreasing negative effect on basic education service. Fiscal extractive capacity had gradually weakening effects on transport infrastructure investment and positive effect on basic education service, and positive effect on health services gradually appeared.Finally, based on the above conclusions, this paper put forward some policy recommendations to advance new urbanization and then promote coordinated and sustainable economic development, which make economic effect of new urbanization benefit people’s livelihood effectively, make all people share the new urbanization development outcomes, thus improve the overall quality of people lives, promote the comprehensive development of people and make society harmony.