Research On The Impact Of Real Estate Industry Development On Economic Growth In China

Since the reform and opening up,along with the rapid development of urbanization and the deepening of urban housing system reform in China,the real estate industry has played an important role in promoting China’s national economic growth and improving the welfare of the residents.Especially before the outbreak of the financial crisis in 2008,the real estate industry has undoubtedly become one of the important pillar industries to promote China’s GDP growth.On the one hand,the wealth effect arising from the rise in house prices has a positive effect on the consumption of the residents and the domestic demand,which has led to the vigorous development of China’s economy.On the other hand,the prosperity of the real estate market has improved the development of a large number of related industries,which gave birth to a large number of market demands to solve a considerable part of employment.In a word,the development of the real estate market has made tremendous contributions on regional economic growth.However,after the global financial crisis,the problem and the malpractice of China’s real estate market is increasingly prominent,mainly as follows:(1)Central and local governments gradually depend on the real estate market to drive economic growth,which is harmful to the steady rise in GDP and the smooth development of the real estate market.(2)The overheated real estate investment gives birth to a large number of investment bubbles,accumulated a lot of inventory,and leading to the mismatch between supply and demand of real estate market.(3)With the improvement of the degree of financialization of the real estate market,the level of economic growth and the level of development of the real estate industry can not form a long-term stable balance,which has buried a huge financial risk for China’s economic development.It can be said that the current rise and fall of China’s real estate industry has become a double-edged sword that affects China’s economic growth and development.Therefore,from the perspective of theory and reality,to clarify how the development of real estate industry affects China’s economic growth has a far-reaching significance.The traditional theory pays more attention to the impact of real estate development(especially house price fluctuations)on economic growth.However,this paper argues that the concept of "economic growth" should not be confined to the change of GDP and its growth rate in the context of the current economic new normal,supply-side reform and "cutting inventory and production capacity".More meaningful content,such as long-term economic growth and short-term fluctuations,regional differences in economic growth,and the quality of economic growth should be included in the concept of "economic growth".In this paper,the concept of growth has been expanded to include the "economic growth rate","regional economic growth rate","economic growth quality" and "short-term economic fluctuations" and other aspects.In order to examine the overall impact of real estate industry development on China’s macroeconomic and regional economic,we focus on the regional differentiation and volatility of real estate industry.The first chapter of paper introduces the background and significance of the topic,the two-way feedback process of the spiral development of real estate market and economic development under the current economic background.What’s more,this paper also expands and explains the meaning of "economic growth",and then summarizes and reviews the existing domestic and foreign literature,elaborates the main research methods,structural arrangement,research focus and innovation of the paper.In the second chapter,the current situation and development characteristics of China’s real estate and national economic growth are briefly introduced,and then contribution of the real estate development to the national economic growth is described from the perspective of statistical analysis.This chapter subdivides the development of the real estate industry into three parts,such as real estate development investment,real estate production and real estate consumption,and respectively analyzes the impact of each part on China’s national economic growth.This paper makes a comprehensive study on the overall impact of real estate development on economic growth rate(national and regional),economic growth quality and short-term economic fluctuations,etc.The third chapters to the sixth chapter respectively focus on analyzing the above aspects.The third chapter examines the impact of China’s real estate development on economic growth rate.This section mainly builds the time-varying parameter vector autoregressive model(TVP-VAR),which includes three variables of real estate development level,economic growth rate and the third industry development level,and focuses on the response path of economic growth rate to real estate development level,the crowding-out effect of the third industry development from the real estate development shocks and the time-varying path of the economic growth rate to the third industry development shocks,with a view to clearly describe the indirect and direct impact mechanism of real estate development on economic growth and its dynamic path.From the regional perspective,the fourth chapter mainly studies the impact of change in house price on the regional economic growth.Based on the provincial panel data,this section establish a dual-threshold panel model,in which the regional level of economic development is considered as a threshold variable,to examine the impact of house price fluctuation on economic growth under different regional economic development levels,with a view to comprehensively explaining the regional differentiation of the real estate market in recent years.From the perspective of economic growth,the fifth chapter mainly analyzes the impact of real estate market development on China’s economic growth.This section mainly divides the economic growth quality index into six dimensions: growth efficiency,growth structure,growth stability,welfare change and profit distribution,resource utilization and ecological environment cost,national economic quality and so on.Combined with the six dimensions of the indicators,the quality of inter-provincial economic growth is measured.After mapping the regional spatial distribution of the national economic growth quality and the development level of the real estate market and comparing the similarities and differences of its spatial distribution,we analyze the impact of the development of real estate on the above six dimensions to further clarify the impact of China’s real estate development on China’s economy in all aspects of economy.Chapter 6 examines the impact of fluctuations in house prices on macroeconomic,especially economic volatility.This paper builds a dynamic random general equilibrium(DSGE)model with heterogeneous families(savings and borrowing),intermediate goods manufacturers,final product manufacturers,financial intermediaries and government departments to explore the impact of real estate price shocks on the real economy.In this paper,the impulse response method is used to simulate the linkage mechanism between house price fluctuation and real economy under the impact of four kinds of exogenous shocks,such as technological progress shock,preference shock,financial shock and monetary policy shock,and we discuss the role of regulatory monetary policy and macro-prudential supervision directly on financial intermediaries in the turbulence of economic fluctuations.Finally,combined with the theoretical background,the reality and the conclusions of the above chapters,this paper gives the corresponding policy recommendations on the issue that "how to rationally regulate China’s real estate market,in order to promote economic development".