A Study On The Capital Efficiency Of China's Economic Growth

Since reform and opening, China has achieved remarkable economic growth.From 1978 to 2008,the average annual growth rate of China's GDP was 9.8% meanwhile the investment rate has remained above 30%.In 2008,China's investment rate has reached 57.3% which is almost twice as the world average.It's no doubt of great significance to research the capital efficiency and allocation efficiency,especially on the context of such a large scale of capital.Based on the accumulation of capital and economic growth theories, This dissertation first analysis the national and provincial capital stock during 1978-2008, as well as the interaction between of capital growth and economic growth,then investigate the dynamic efficiency of China by four methods,last examine the capital efficiency in both structure and space allocation.The main conclusions of this dissertation are as follow:First,despite the decrease in production efficiency,capital accumulation is still the main driving force of economic growth.China's capital increase is not sensitive to the economic environment,the investment may has a self-maintenance mechanism.Second, there is no excessive accumulation of capital stock. Whether using the golden rule, the modified golden rule,or the AMSZ criteria,test results are the same:China's capital accumulation has shown dynamic efficiency.Third,the decline in capital-output efficiency may due to a static configuration inefficiency,rather than a dynamic inefficieny,Fourth,inter-provincial allocation of capital is imbalance.Under the assumption of Cobb-Douglas aggregate production function,the allocation between provinces is found to be more and more inefficient.Fifth,the capital allocation between sectors and industries is lack of efficiency.Although the output efficiency of State-owned sector is deteriorating while of non-state sector remains a high level,capital doesn't show a reasonable allocation between the two sectors.Moreover,the capital allocation in industries is much influenced by the policy,and responses weakly to market signals.There is a significantly allocaton imbalance among industries.The main policy implications of this dissertation is:To improve the capital efficiency, the most important way is realizing the rational allocation.Only from the strategic perspective of comprehensive,harmonious and sustainable Scientific Development View,and from the view of transfering the economic and industry structure, can we realize the sustainable growth and sound circulation by changing the mode of economic growth and improving the efficiency of resource allocation.