A Positive Research On The Growth Of Productivity Of Manufacturing And Factor Reallocation

Since economic reforming, China’s manufacturing industries have been clustering to the east coast, and have undergone a profound change in the structure. Taking Zhejiang manufacturing industry for example, at first, this paper reviews the history of manufacturing of Zhejiang and its characteristics, and then discusses the status of current development, challenges and advantages. After these, using panel data by industry, with the shift-share method and Translog production function, this article analyzes the effect of factor reallocation on productivity growth of Zhejiang manufacturing during the period1992-2007. The study illustrates that, firstly, in the study period, output structure of Zhejiang manufacturing has a significant change, but the basic pattern of the industry doesn’t change. Traditional labor-intensive industries still take dominate position. Secondly, the manufacturing of Zhejiang does not show obvious "structural bonus", but "negative profit of structure" in certain period. Thirdly, factors transferred from the traditional industries such as textile to new manufacturing of mechanical and electrical. After2001, however, output growth has the tendency of relying on factor inputs increasing. Fourthly, despite the high degree of manufacturing agglomeration in Zhejiang Province, scale of productivity growth is not obvious. So this paper argues that, firstly, we should further promote structural changes in the manufacturing sector, increase the support and guidance of new manufacturing, make good efforts to develop new industries represented by electronic information, new energy, new materials and equipment manufacturing industry, accelerate the step of construction of internal bases of new first-class manufacturing industries, and occupy the strategic high ground. Secondly, we should grasp the structure of the future upgrading of Zhejiang manufacturing from the global perspective, continue to maintain and promote the development of traditional industries, and avoid being blind to pursue heavy industry. Thirdly, we should strengthen the effectiveness of policy guide, promote mergers within the industry, improve the scale effect, make the optimization and integration of industrial chain come true, fully use capital market, and improve the openness and development of private enterprises relying on modern enterprise system. Fourthly, we should accelerate the development of producer services to create a good environment for the transformation and upgrading of the manufacturing industry. Finally, it shows a number of shortcomings.