A Study On The Implementation Of "the Strategy Of Relying On Investment For Economic Growth" In Jilin Province

In October 2003, the central government adopted the policy to rejuvenate the old industry base in northeast China. During the past two years, achievements had been made in Jilin old industry base rejuvenation. But Jilin's economic development is comparatively laid back, and the gap of economic development status between Jilin province and advanced provinces has a growing tendency. At the same time, some issues emerged in China's overall economic situation, such as the over fast growing in fixed assets investment, the"overheated"macro economy operation, etc. Therefore, a series of macro regulation and control measures were adopted by the central government and the local governments were asked to thoroughly implement these measures and strictly control the over fast investment growth. Under such a circumstance, with heavy political and public pressure, People's Government of Jilin Province carefully considered its own reality and made the decision to implement"the strategy of relying on investment for economic growth". With the implementation of the strategy, the economic growth and fiscal income were fastened and a solid material foundation was laid to respond the severe challenges of global financial crisis. Based on the careful study on fundamental theories of investment, the thesis makes synthetic analysis on the background, main contents, achievements and main issues of"the strategy of relying on investment for economic growth".From 2005 to 2007, through the implementation of"the strategy of relying on investment for economic growth", continuous absorbing foreign investment and taking efforts to increase fixed assets investment, the fixed assets investment in Jilin province maintained a rapid growth in the past three continuous years, with the feature of increase on investment scale, investment structure focuses on industry investment especially pillar and characteristic industries, diversification of the investment subject and capital source, and unbalanced development among different areas within the province. Driven by"the strategy of relying on investment for economic growth", Jilin province enjoyed rapid economic growth with low investment flexibility, which means strong spillover effect exist in investment and its small contribution to economic growth. Comparatively speaking, investment in key sectors and capital-intensive and technology-intensive industries, such as public infrastructure construction and IT industry, had obvious impact on economic growth, investment in labor-intensive industries, such as building industry and social service industry, had small impact to economic growth. Correspondingly, the overall employment situation of Jilin province did not have many changes and investment growth did not keep the same pace with employment opportunity growth, which means investment had small impact to employment. Besides, the rapid investment growth pushed forward the fast increase of fiscal revenue in Jilin province, but the fiscal income per fixed-asset unit experienced the tendency of decline, which means the limit impact of investment growth to local fiscal revenue. The economic gap among different areas within Jilin province was reduced, but the mainstay position of Changchun city and Jilin city didn't change and the key industry sectors were further integrated to Changchun city, Jilin city and several other areas, which worsened the unbalanced development among different areas within the province. Generally speaking, achievements had been made to some extent due to the implementation of"the strategy of relying on investment for economic growth"with less effective overall and small impact to economic growth.Besides the great achievements made due to the implementation of"the strategy of relying on investment for economic growth", some deep rooted conflicts and issues arose in the investment development of Jilin province. The conflicts and issues were mainly as follows. Firstly, the comparatively poor overall investment environment, undeveloped transportation infrastructure and further optimization of investment soft environment, such as the credit crisis between government and enterprise and among enterprises, the comparatively poor industry matching capability and low level of industry integration, the time-lag transformation on institutional reform and concept change, the severe injustice and unequal phenomena in judicial practice, and the improvement of government's sense of active serve. Secondly, the insufficient number of big project which can drive economic growth, on one hand big projects made up a small percentage of investment projects, and on the other hand, the comparatively low economic benefits made by big projects, lacking of internal growth projects among newly-commenced projects, a small number of modification and expansion and technical renovation projects, which slowed down the technological advance and transformation of development models. Thirdly, inadequate importance and support to medium and small investment, which means the private and individual enterprises investment growth speed was much lower than fixed assets investment and only shared a small percentage of gross investment volume.Due to the impact of global financial crisis, the state economic situation in 2008 was unstable, economic crisis became apparent and the investment growth of Jilin province slowed down in the first half of 2008. In order to fight against economic crisis, the central government implemented a economic stimulus package of 4000 billion RMB investment till the end of 2010 in infrastructure construction, people's livelihood projects, ecological environment construction and after-earthquake reconstruction, to expand domestic demand and enhance stable economic growth. Taking this opportunity, based on the previous achievement, Jilin province will fasten the steps of implementing"the strategy of relying on investment for economic growth"and promote economic development. Therefore, Jilin province will improve investment soft environment, actively strive for more support from central government, increase investment in key sectors such as new industries, modern agriculture, infrastructure construction, modern service industry and people's livelihood, support the investment to medium and small sized enterprises and private economy, and put more emphasis to infrastructure construction in backward areas within the province.