Analysis Of Green Economic Efficiency And Green Total Factor Productivity In China

Since the Reform and Opening-up, the "China miracle" has been witnessed by the whole world. Despite the fact that China may be the country advancing along the most rapid growth in terms of economic aggregate amount, its resource exploitation capability ranks rather low among the others due to the extensive growth pattern that it has long implemented. Meanwhile, during the developing process, China has focused too much on the growth of GDP while neglected the impact on environment caused by overbalanced economic activities. The environment in China has encountered tremendous damage. Therefore, if China is to achieve its goal of resource conserving and environment-friendly society, two immediate obstacles need to be surmounted:the first is economic efficiency, that is, the problem of resource lavishness; and the second is environment pollution in the process of economic growth, that is, the pollution caused by overbalanced focus on GDP growth which caused by negligence on environment protection. Based on these two problems, this paper studied the green economic efficiency and the green total factor productivity in the restrictions from resources and environment.This paper attempts to adopt the two factors, resources and environment, into the System of National Accounts to create a system of factors involving20basic factors concerning the three aspects of pollution, ecological resources and natural disaster. This system of factors calculates the ECI (Environment Comprehensive Index) based on PCA (Principal Components Analysis) to reflect the comprehensive quality of environment of each province. On the basis of ECI, we are able to calculate the relative green GDP by making adjustment to the traditional GDP. By analyzing the principal of impact imposed by economic efficiency and through combination of three-stage DEA model and Malmquist index, this paper made positive analysis from the five perspectives, i.e. social structure, policies and mechanism, demography and investment on sustainable development, and reached the result of green economic efficiency and green total factor productivity exclusive of external effect. Now, the major conclusions are explained below:(1) The provinces with the best ECI performances concentrate in the eastern China, while the worst ones are in the west; among the three major regions in China, whether in the aspects of provincial differences or the trends of change along with time, the eastern region presents the most stable development while the middle and western region are poorer; with respect to the ECI performances, from high to low, the ranks are east, middle and west. Despite the fact the gap between the west and the middle are bridging, the gap between the middle and the east are enlarging.(2) External factors impose huge impacts on China’s economic efficiency. So neglecting the impacts of environment factor and random interruptions on the efficiency will bring over-optimistic view on our economic growth. Foreign capital dependence presents its positive influence to the increase of efficiency; the trade dependence has improved the capital exploitation efficiency while slowed down the labor exploitation; structure of state-owned property posed obstructions to the improving of efficiency, and while the urbanization to the capital exploitation efficiency, it gives a positive impact to the labor exploitation; financial power distribution and transferred payment have both posed positive influence to the economic efficiency; through the aging population drags the efficiency down, the labor capital level promotes it, despite at an obscure speed; and the investment on sustainable development did facilitate the efficiency.(3) The traditional efficiency and green efficiency of the transformed Chinese economy did not so well, with the fact that loss of efficiency prevails in the main reason of low mass-scaled efficiency. Compared with the traditional efficiency, the green efficiency presents a reduced trend, largely because of impact from the west. For the west, the green efficiency is always lower than the traditional efficiency, while in the east, the green efficiency is always higher and the middle region presents a balanced situation with no obvious gap. Generally, the green comprehensive efficiency for these three regions remains stable led by the east and middle, leaving the west region behind. Fluctuations on small scales are caused by external policies or economic factors.(4) Averagely, the green total factor productivity and the related subsidiary indexes are all lower than the traditional ones, but the gap between the two group of factors are being closer. In the east, the traditional total factor productivity and the environment total factor productivity are both increasing, yet the middle and west are decreasing, the middle faster than the west; in the east, the total factor productivity grows with power from technical progress while the middle and west encountered technical regression. However, the technical progress achieved by the east did not lead to the optimistic direction of clean technology. Generally speaking, the east plays a role of innovator in the economic development of China, and the middle and west learn, applying advanced technologies that are learned from the east into the practical development. But they have not gained so much good results. While the middle region is still in a development in scale not so economical, the east region, as supported by technical progress, may expand its scale for manufacturing and increase the total factor productivity. But when it comes to the west, even though theoretically an economical economy, the west, after taking into account of resource and environment factors, plus lack of technical support, is still counted as in the phase of un-economical scale and income.