A Study On The Imbalance Of Investment Structure In China

Economic Advancement does not only show the expansion of total amount, but also is the process its structure is continuously optimized. Investment structure is based on economic structure, influencing or even determining the structure of system of ownership of the means of production, regional economic structure, and industrial structure. The optimization of investment structure is the basic force and effective methods promoting to upgrade industrial structure and optimize economic structure, balancing the national economic structure, being conducive to improve the quality of economic growth and sustainable advancement of economy. This paper can be divided into eight chapters and the main contents show as follows:Introduction introduces the research background and relevant documents of investment structure at home and abroad. In addition, research ideas, contents, approaches and possible innovations are contained in this section.Chapter 1 introduces the definition of investment instructure and its classification, the relationship between investment structure and economic growth, and the factors which affect investment structure, including natural condition, demand structure, technical progress, the strategy of social development, systematic factors and foreign trade.Chapter 2 conducts a acarding about Karl Marx’s investment structure theories, and summarize their realistic meaning to optimizing investment structure today. Karl Marx classified all the advanced capitals used as investment into different categories forming different investment structure, including constant capital investment and variable capital, fixed capital investment and current capital, things investment and human resource investment. Marx thought that the aim of capital investment accounted for the surplus value. The object of investment comprises not only industrial capital but also fictitious capital, like stock. The theory of social capital reproduction produced by Marx suggested that the capital for investment and capital goods and the capital for production and consumption should be distributed proportionally so as to make social reproduction go on smoothly. Furthermore, Marx had discussed that scientific and technological advance has impact on the investment structure and inadequate consumption constrains investment. The abundant investment structure of Marx enlightens us that investments have different categories, inward investments ought to remain a proper proportion, and the factors, like technology and consumption, has an effect on investments.Chapter 3 summarizes investment structure thoughts In Western Economics and their realistic meaning to optimizing investment structure in China. Adam Smith proposed that the main body of investment is rational economists while market mechanism can achieve the optimal allocation of resources. He also brought up the four applications of investments, considering that capital investment is driven by profit and should be given the high priority to make investment in the most useful fields. Adam Smith holds that private investment can promote public interests by means of market mechanism. Keynes believes regulation of market mechanism alone can not eliminate unemployment and governments should undertake the responsibilities for public investment, applying monetary policy and fiscal policy to enlarge investment and aggregate demand, gearing up the private capital investments. The development economics pay more attention to economic structure problems, contains balanced growth theory and unbalance growth theory.With the change of income and demand, investment structure will change, the diffent stage of industrilizition has diffent investment strutute, investment structure bears close relation to economic growth.Chapter 4 describes transformation process of Chinese investment structure since the founding of China. Our national investment structure is constantly changing and upgrading, investing principals has transferred into plural investments from the beginning of one-mode governmental investment, including governments, private sectors, individuals, and foreign investments. Investment autonomy of the state-owned enterprises is continuously enlarging, converting into independent market investment principals. Industrial structure of investment continues to optimize, with the GDP of agricultural output accounting for 10% at present and with the GDP of tertiary industry over 50%. From the perspective of regional structure, investment priorities have made shift to the process from inland to coastal areas, then from eastern coastal areas to central and western part of China. In the overall process of economic priority transference, our national evolution of investment structure bears close relationship to institutional change and technical advancement.Chapter 5 analyze the trends of investment structure in recent years, the proportion of investment in state-owned enterprises has declined in China’s total investment, the proportion of private investment has increased, the ratio of investment in the secondary industry decreased and the proportion of investment in the tertiary industry increased; the ratio of investment in the central and western regions rises; more government investments are placed in the field of public products and services. Although the investment structure is constantly being adjusted and optimized, yet there are still many problems: Enterprises’ primary position in investing is not strong enough and equal competition among investors has not been truly formed yet; repeated investment and excess production capacity are very serious but investment in high-end products is rather insufficient in the manufacturing industry; insufficient investment in public products coexists with inadequate supply, high investment rate coexists with low investment efficiency etc. Possible causes of those problems mainly include the traditional development strategy that gives priority to heavy industries, incomplete market mechanism, the overrun and absence of government responsibility, insufficient supply of effective system, path dependence during the transition period etc.Chapter 6 proposes the standard to judge the rationality of investment structure. Investment structure should accords with the evolution rule of the industrial structure, should coordinate with the demand structure, should promote sustainable development of econom and meet the needs of essential demand or residents. To optimize the investment structure, China still needs to strengthen investments in science and technology, environmental protection, human resources, public products, modern agriculture etc. measures should be taken to promote private investment and strength investment in mid-western region.Chapter 7 describes the transformation process of developed countries. The growth of developed countries’ investment structure has gone through the transformation from investment in agriculture, investment in the mining industry, the transportation industry and the processing industry, investment in heavy industries and durable consumer goods, investment in the tertiary industry to investment in science, technology and knowledge concentrated industries. The evolution of the UK’s and the US’s investment structures is mainly guided by the market. However, the upgrade of investment structures in Japan and South Korea not only involves functions of the market mechanism but also cannot go without the participation and guidance of the governments who provide effective support for investment structure optimization in financing, industrial policy etc.Chapter 8 prppposes both the market and the government should give play to their functions to optimize the investment structure in China, let the market play the decisive role in resource allocation and government should better play its role. The main strategies include: Continue improving the market mechanism, and form an internal long-term mechanism to optimize the investment structure; deepen structural reform and strengthen the primary investment position of state-owned and private enterprises so that enterprises can truly become the subject of investment and innovation; improve the market system, complete the market regulations and form a market environment where all investors can equally compete with each other. The government should better play its role, provide an incentive and supportive environment for the adjustment of investment structure in aspects such as simplifying procedures to approve investment, protection of property rights, providing social infrastructure, guaranteeing educational opportunities, supporting technical innovation, conducting institutional innovation etc.