The Study On Capital Backing Strategy Of Industrial Structure Adjustment

Combining theories of multiple subjects such as industrial structure theory, capital theory, investment theory, human capital theory, modem financial development theory and so on, this article integrates theories with practice, international experience with actual situations in Jiangsu Province, normalized research with positive analysis, and quantitative analysis with qualitative analysis and forms a relatively complete analysis system for capital backing strategy in industrial structure adjustment. The article conducts its research with capital as its main line of thought. The industrial structure adjustment aims at optimizing and upgrading industrial structure and realizing sophistication and rationalization of industrial structure. The ways of realizing optimum industrial structure lie in optimizing technological structure, intermediary elements input structure and fixed assets structure. Technological structure and fixed assets structure are long-term factors while intermediary elements input structure is a short-term one. Consequently, the core task for strategic adjustment of industrial structure is the adjustment of technological structure and fixed assets structure. The article makes research into technical structure from two approaches: (1) The technology materialized in machinery and equipment depends on physical capital; and (2) The technical skills existing in human resource depends on human capital. As the fixed assets structure is closely related with technical structure, it mainly depends on physical capital input. Therefore, physical capital and human capital are core factors in industrial structure adjustment. The formation of physical capital and human capital is dependent on support from financial capital while financial backing is also conducive to adjustment of stock fixed assets. In view of this, the real purpose of the article is to study how industrial capital is united with financial capital under the circumstances of socialist market-oriented economy and how the active role of financial capital in the process of optimizing and upgrading industrial structure is brought into full play in order to accelerate social and economic modernization drive. The article arrives at the following conclusions: 1. Capital backing is a core factor in industrial structure adjustment. Physical capital, human capital and financial capital are decisive to strategic adjustment of industrial structure and realization of sophistication and rationalization. 4 2. Realization of capital backing depends on market mechanisms. When the market economy is imperfect and underdeveloped, we shall not replace market factors with administrative means and must integrate reforms with industrial structure adjustment so as to create desirable market conditions for capital backing and guide industrial structure optimization. 3. Capital plays an active part in industrial structure adjustment. But to what degree and in what ways to play this active part depend on whether it promotes intensive operation of the industry and leads to industrial upgrading or it merely helps the industry抯 extensive reproduction on the basis of its original levels. They also depend on which sector capital invests in, i.e. investment structure. Positive analysis indicates that the significance of investments in automobile and electronics sectors are much greater than the investments in infrastructure, such as traffic and transportation. 4. Such three levels of human c...