| The urbanization of China has developed rapidly in the last thirty years. In 2011, population of cities exceeds population in the country for the first time. And the rate of urbanization achieved 53.7% in 2013. According to Northam Curve, the urbanization of China has already in the high speed developing stage. At the meantime, the ratio of industrial added value is 10:43.9:46.1 in 2013 which indicates that the weight of tertiary industry has exceeded the primary and secondary industry and become the largest industry. And it also shows that the industrial structure evolution of our country has stepped into a new stage. So the urbanization and industrial structure evolution are the two main tasks that China are facing. The development of urbanization is important to some issues, such as Three Rural Issue, overall urban-rural plan issue and coordinated development of regional economy. While the industrial structure evolution is related to the quality and efficiency of economy development. Therefore, what's the relationship between the urbanization and industrial structure evolution in the condition of both are facing the challenge of transforming. In this regard, what's the mechanism of the effect of urbanization to industrial structure evolution?Studies have shown there is a mutual relationship between urbanization and industrial structure. Current researches focus on the impact of industrial structure evolution on urbanization, and less concerned about the impact of urbanization on the evolution of industrial structure. Prime Minister Li Keqiang says, urbanization is the greatest potential to expand domestic demand. Requirements are important factors affecting the evolution of industrial structure. In addition to the requirements, what affects the evolution of industrial structure? This is the original intention of this topic and research purpose.Therefore, inspired by the urgency of the challenges of the transformation of urbanization and the industrial structure, the paper mainly discusses, on the basis of some researches made by people, the mechanism and realities of the impact of urbanization on the industrial structure evolution. In theory, urbanization is studied from the following seven aspects influencing mechanism of industrial structure.Firstly, I study on the 'urbanization-economy development - industrial structure' influencing mechanism. Economy development is separated into scale of economy and industry integration. From the aspect of scale, the scale expansion at the early stage of urbanization enlarge the market of industry, which helps to increase production, lower the cost and promote productivity. It pushes the transformation from traditional industrial structure which is based on agriculture to secondary industry, especially labor intensive industry. In the medium term of urbanization, with the continuously expansion of economy scale, human capital starts to increase and natural resources constraint appears. The congregated industries in old central cities will expand beyond downtown and capital intensive industries develop rapidly. In the later period, the advantage of economies of scale in traditional industry will disappear and division of economies will accelerate and lead to the development of emerging industries, especially in those high value-added secondary industries and modern service industries.Secondly, from the aspect of economy divisions and industry clusters, at the early stage of urbanization, labor surplus in primary industry starts to aggregate in secondary and tertiary industries, and capital heads to emerging market as well. Districts with fluent natural resources are the key of urbanization at this stage and it also decides the level of industrial structure. In the medium term, clusters turn from extensive to intensive agglomeration. Central city develops rapidly and the degree of both division and cooperation goes further as well. It accelerates the pace of industrial structure evolution. In the later period, the foundation of industry structure has been built up in cities and is becoming saturated gradually. Even worse, it goes to inverse-urbanization. In this period, the dependent factors of industry structure are the movement of capital, the improvement of technology, the regional division and trading.Thirdly, I investigate the'urbanization-demands-industry structure' mechanism. I separate the demands into consuming demands and investing demands. The enlargement of consuming demands facilitates the scale expansion of consuming products, evolution in technology and promotion of productivity directly and stimulates the demands of capital products at the same time. Firms will increase productivity through using larger machines and improve technology and reduce cost by using new energy in order to meet the increasing demands and the fierce challenge in the market. On one hand, it promotes the development of light industry directly, on the other hand, it drives the development of heavy industry. With the development of urbanization, consumption structure develops from low to high level. It can be represented in the decreasing ratio of consumption in food, the increasing need of light industry productions and the development of heavy industry. The dominant industries switch from agriculture and manufacture which satisfy the basic needs of people to heavy industries which meet the needs of higher level, such as automobile manufacture. And further, it will switch to modern service industries as telecommunication, education and finance.Fourthly, from the aspect of investing demands, construction of cities creates a part of investing demands. And urbanization will lead to increasing demands of real estate and trigger the development of related industry, including construction material, metal smelting, chemical and finance. The emergence and development of these industries will change the structure of industry.Fifthly, I focus on the'urbanization-supply-industry structure'mechanism. Basically, the elements supply is constructed by land supply, labor supply and capital supply. The constrictive supply of land restricts the development of agriculture and land intensive secondary industries. With the development of urbanization, the restriction of land supply will increase and influence the price of housing and further increase the cost of human capital. High human capital cost limits the development of labor intensive industry and force the industry structure adjust to capital intensive, technology intensive or knowledge intensive forms.From one aspect, urbanization liberalizes labor surplus in the countryside so that provides huge amount of low-cost labor and stimulates the development of the secondary and tertiary industry. From another aspect, urbanization improve the quality of labor which guarantee high intelligence human resources for the improvement of industry structure.With the larger scale of urbanization, it provides favorable conditions for deepening of capital. In the way of chasing higher profits, our industry switch from primary industry to secondary industry and to tertiary industry and push the evolution of industry structure.Sixthly, I investigate the'urbanization - technology development - industry structure'mechanism. Urbanization specialized the infrastructure of knowledge. And population aggregation in urbanization procedure create demand and force innovation in technology. Meanwhile, urbanization facilitates the spread of knowledge and thinking which push the innovation of technology as well. The innovation of technology will improve productivity, screen out out-date industry and accelerate development of emerging industry. After all, it will help the evolution of industrial structure.Seventhly, I propose the'urbanization-opening door policy - industry structure' mechanism. Economy development and improvement in infrastructure which are accompanied with urbanization push the trading and investment to be more open. The opening trading and investment will do good to optimize resource allocation inside the country and realize the complementary relationship between resources in and out of the country. The opening environment will bring the country a larger market, set a direct link between the industry structure and the worldwide market, so that pushing the optimizing procedure of industry structure. And through the importation of technology, spillover effect and competitive effect, the opening environment also brings the improvement of technology of firms in the country, pushes the optimization of industry structure. What's more, the opened trades and investment will drive the accumulation of capital as well which provide a capital support for evolution of industrial structure.In empirical part, I construct the regression model and structure model by using province-level panel data to analyze the influence of urbanization to industry structure. Viewing from the three times industrial structure evolution, the production and employment of the primary industry comparing to the total is decreasing dramatically with the development of urbanization. From the mechanism, the scale of economy does not have significant influence on the ratio of agriculture production, but the degree of specialization in economy lower the ratio of agriculture production efficiently. And with the increasing size of consumption, structure of consumption is improved, which is represented in the lower Engle coefficient, and it will further decrease the ratio of agriculture production. The increase of labor supply will increase the ratio of production in primary industry, but with the flow in of capital, the ratio will decrease. And both innovation in technology and the degree of opening will lower the ratio as well.Basically, there is an inverted-U relationship between urbanization and the ratio of production and employment of the secondary and tertiary industry. Urbanization facilitate the promotion of productivity in the secondary industry and promote the evolution of structure in secondary industry. The mechanisms which will increase the ratio of production of the secondary industry including the increase of economy scale, deepen of economy specialization, increase in consumption scale and supply in labor and capital. But neither the innovation of technology and opening environment will leads to a larger ratio of production of the secondary industry. And the increase of economy scale, deepen of economy specialization, increase in consumption scale, promotion in consumption structure and increase in supply of labor and capital will increase the ratio of employment of the secondary industry. But innovation in technology and opening environment have negative effects on that ratio.The relationship between urbanization and the tertiary industry is a U-shape. That means at the early stage of urbanization, the ratio of the tertiary industry is decreasing, but in the later stage, the ratio of both production and employment of the tertiary industry will rebound. For the mechanism, the economy specialization, increasing size of consumption and investment, the promotion of consumption structure and the opening environment are good to the increase of the ratio.And urbanization will promote the evolution of structure inside the industry, including the increasing weight of modern service and real estate in the tertiary industry.When viewing the industry structure as a whole, the evolution of industry structure in our country has experienced the stages from'secondary-primary-tertiary' to'secondary-tertiary-primary'and to 'tertiary-secondary-primary'. By applying structure regression, I investigate the seven mechanisms as a whole, and the empirical results support our analysis that urbanization does influence the development of three levels industry through economy development, supply, demand, innovation of technology and opening environment, and it further push the procedure of industry structure evolution.Analyzing from the dominant industry, the dominant industry in our country switches from agriculture-dominated and light industry-dominated to heavy industry-dominated, traditional service industry-dominated, modern agriculture, industry and service with high added value. These changes show that the dominant industry in our country no longer depends on natural resources and labor, but more depends on capital and knowledge. |
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