Research On The Economic Effect Of In Situ Urbanization In China

Under the background of globalization, the regional specialization and the exertion of agglomeration effect provide steady power for economic growth, thus narrowing the economic disparities between developed and underdeveloped region and accelerating the integration process. Under the economic new normalization, the urbanization plays a key role in expanding domestic demand, easing the economic downward pressure and accelerating urban-rural integration. While at the same time, traditional urbanization mode lays excessive emphasis on urban scale expansion and encourages farmers migrate to the city, therefore resulting in a series of "city disease" problems such as excessive population, urban congestion, increasing of living cost, environmental pollution and inadequate public services etc. By the end of 2015, the population in Chinese towns has reached 77116 with the urbanization rate being 56.1%. However, the population in cities and towns should reach 840 million by 2020 according to the "Thirteen-Five Plan" to achieve the urbanization goal of 60%, when the total population in cities and towns will reach 840 million. And if all the additional population were digested by big cities, therefore,14 more cities with more than five million people, or 7 more cities of more than ten million should be established by the current 1% of urbanization speed. Furthermore, it is estimated that per capital investment on urban infrastructure construction is close to ten thousand yuan and the total required investment will be over trillion yuan, and the huge fiscal burden will make the government overwhelmed. Therefore, it will be a vital urbanization choice to encourage rural labor force work locally and promote the In Situ Urbanization construction in the western regions. It is of great significance to promote the In Situ Urbanization, which is beneficial to realizing the strategy put forwards by central government, that is " Accomplishing In Situ urbanization of one hundred million people in Chinese western regions", to ease the problems of "city disease ", cultivating new economic growth point, accomplishing the western development strategy of "Targeted Poverty Alleviation" and eventually achieving the goal of establishing up well-off society comprehensively.The study is divided into seven chapters, following the logic chain of "concept definition (first two chapters)-Case Study (Chapter ?)-Economic Effect Theory and Evidence (Chapter 4 and 5)--domestic and international experience (Chapter ?) Anshun development path (Chapter ?) ". Specifically, first, for the concept definition of In Situ Urbanization, this Study compares the following concepts such as Small Town, In Situ Urbanization and In Situ Small Town to clarify the different theoretical connotations of urbanization. Second, for the case study, this study discusses the fundamental conditions and development status of western less-developed small towns under the macro background of Chinese small town's development. Furthermore, this study conducts case studies of three provincial towns including Jiuzhou, Xiayun and Baiyan to makes a descriptive analysis of the relationship between small towns'development and economic growth. Third, for the theory and empirical analysis of In situ urbanization and economic growth, this study analyzes the influence of small town development on production factors reallocation, demand structure change of labor force, industry and population agglomeration, specialization and innovation, which constitutes the theoretical foundation between industrial structure adjustment and economic growth. In addition, this study establishes a comprehensive analysis framework to explore the relationship between economic effect of In Situ urbanization and puts forward three hypothesis based on a two-sector economic growth model. Specifically, (1) the increase of Small Towns urbanization level will promote the adjustment of industrial structure through the routes of industrial and population agglomeration, specialization and innovation, and factors reallocation etc.(2)the adjustment of industrial structure means the production factors reallocation, which will increase the factors reallocation productivity and promote regional economic growth.(3) the small towns development will promote economic growth indirectly through influencing industrial structure adjustment, where the industrial structure play a key role to be the interaction variable. And also, this study further makes an empirical analysis between small town's development and economic growth under certain theoretical hypothesis. Fourth, for the domestic and international experience, this study compares the paths, experience and lessons of small towns development at home and abroad, explaining the similarities and differences between foreign and home small towns development. Fifth, for Anshun In situ urbanization development path, this study puts forwards certain measures to promote Anshun unique small towns'development, including reforming institutional mechanisms and cultivate distinctive industry.Research findings include empirical results and policy suggestions:First, empirical results.Firstly, this study uses the time series data of Anshun city from 1990 to 2013 adopting a vector autoregression model to explore the relation between Anshun city urbanization level and economic growth; further, this study adopts the panel data of thirteen small towns in Anshun city from 2006 to 2015, and makes a cointegration analysis between small town's development and long-term economic growth. Finally, this study uses the same small town's data to explore the effect of in situ small towns and industrial structure on economic growth based on the fixed effect model.(1) The Correlation test between Anshun urbanization rate and economic growth. The regression results using the methodology of VAR model and Granger causality results show that, the urbanization is the Granger cause of economic growth, but economic growth is not the Granger cause of urbanization. That is, the improvement of urbanization level in Anshun will significantly promote local economic growth, while on the contrary, the economic growth is not significant in affecting urbanization level.(2) The correlation test between In Situ urbanization and economic growth in a micro-perspective. Result shows that, the small town's development in Anshun will significantly promote regional economic growth, and Anshun city does not show a tendency of excessive urbanization with an average elasticity of urbanization-growth being 0.69, and the towns of Longgong and Tianlong is 1.265 and 0.205 respectively. Otherwise, the study also finds that there exists a negative correlation between per capita GDP and elasticity, indicating that the poorer the small towns is, the bigger marginal effect of urbanization-growth elasticity it will show.(3) The empirical analysis of small towns, industrial structure and economic growth in micro perspective. After controlling such variables as industrial structure, employment, investment, fixed assets investment and education input, the improvement of small town's urbanization will promote economic growth significantly with the elasticity ranging from 1.095 to 1.559, which means that the small town's development in Anshun city is still in the process of positive marginal effect. In addition, the growth elasticity is 1.601 and the interaction coefficient between urbanization level and industrial structure is significantly positive, confirming the exisistance of interaction between industrial structure adjustment and economic growth.Second, policy suggestion.After summarizing the small town's development experience and deficiency at home and abroad, we find that there exist huge focus difference on the research topics of urbanization at home and abroad. The similar points include, both emphasize the functional orientation, unique industrial cultivation and the improvement of multi-level urban system in the process of urbanization, while the difference is that, the western countries lay less emphasis on the market mechanism improvement because of their mature market system and relatively complete system of property right, as a consequence, the factors can migrate freely. While back to China, the development of small towns are still faced with series obstacles in market systems including Hukou-policy, land system, investment and financing system and administrative system,etc. In addition, in Chinese western less-developed regions, the small town's developments are still faced with series of environment-protection issues and shouldering the pressure of green growth. Therefore, this study put forwards several targeted measures to solve the above problems, requiring further deepening the reform of institutional mechanisms to eliminate institutional obstacles, requiring making scientific top-level design of In situ urbanization planning to clarifying position, requiring developing unique industry to improve the attraction of small towns, requiring upholding the belief of green growth to accomplish ecological civilization.