An Analysis Of The Reasons For Human Capital Structure And Regional Economic Development

At the current stage, the imbalance of regional economic development hasbecome a serious problem in the process of economic development. Economic growthis not synchronized across regions while regional economic development relying onvarious regional resources of each countries. As for china, one of developing countries,fast economic growth has maintained for30years since Reform and Opening-up,though the growth was in extensive pattern in early ages. However, along withcoming of knowledge economy era, extensive growth no longer fits today’s worldeconomy development. It is not hard to find out from experiences of developedcountries that mental force as resource putting into economic development hascontributed a lot to productivity boost; human capital’s development has becomeeconomic growth momentum of developed economies. China’s resources orientedgrowth pattern has to change. As a populous country, China though with rich humanresources, its human capital is considerably scarce. Imbalance in regional humancapital structure and regional economic development has become key factor causingasymmetric growth across regions in China. Therefore, the change of China’seconomic growth pattern, improvement of imbalanced human capital and theeducation-based development of human capital will play a crucial role in China’seconomic growth.First of all, the paper reviews the theory of economic growth, theory of regionaleconomic growth and the theory of human capital. Adam Smith’s division of labortheory, Solow growth model, and the modern human capital theory proposed bySchults in1960has showed that the human capital theory is relatively developed inWestern developed countries as early economic growth theory and regional economicgrowth theory have all mentioned the role of human capital in economic development.However, research and applications of human capital theory are still rare in China.Secondly, current situation of China’s human capital has been analysed. Thereare three main features of China’s current human capital situation. The first is the low quality of human capital featuring lower level of education, low competitiveness andlower cost of labor. The second is human capital’s supply and demand imbalance. Theaging of the population and declining birth rate will both lead to decreasing supply ofhuman capital. In addition, surplus rural labor’s lacking education and professionalskills and information asymmetry between the employer and the migrant workershave caused supply and demand imbalance of surplus rural labor. Meanwhile,graduates’ employment has also led to supply and demand imbalance. The third isuneven distribution of human capital. Uneven distribution of industry has causeduneven distribution of human capital and labor structure’s difference across regions.Human resources’ relocation in such areas in recent years has also resulted significantimpact on regional economy.Thirdly, correlation between human capital structure and regional economicgrowth in China has been analysed. In this section, current situation of regionaleconomic development has been elaborated. Specifically, fixed assets investmentgradually transfers from economically developed areas to economically lessdeveloped areas, urbanization is accelerating, and developed areas are increasinglyplace emphasis on development of tertiary industry. However, those positive featureshave little impact on the significant imbalance of regional economic development.Currently, there is economic gap between regions, especially between eastern andwestern regions in China. As for central China, the region has gradually gained centralgovernment’s attention since2004, but its lagging infrastructure, slow urbanizationand industrialization, low attractiveness to resources and rapid development of otherregions will still make central region’s development lag behind for a period of time. Inaddition, there is apparent similarity of industrial structure in China’s different regions,and redundant construction is also a serious problem. After analysis on currentsituation of human capital and regional economic development, detailed analysis ofcorrelation between them is presented. Along with increasing trend of people orientedregional economic development, coming knowledge economy era has changed theway of regional economic development. Enhance labor productivity through humancapital factor has become new characteristics of regional economic development;meanwhile human capital has become key factor of production. As rapid growth oftertiary industry is main driving force of economic growth, human capital already isthe most important element to sustain regional economic growth. Moreover, human capital is now decisive to development of regional economy, which meansdevelopment of human capital and development of regional economy are positivelyrelated. Human capital is the decisive factor to overcome problems emerging througheconomic pattern transformation and contribute to successful growth pattern change.Human capital plays critical role in regional economic development: investment inhuman capital will elevate productivity substantially. Since human capital stimulatestechnology’s development and application, combining of factors of production andtechnology contribute to maximum benefit. In addition, human capital helps to boostregional economic growth through innovation. Innovation and change of technologyis indispensable in today’s economic development, and people plays important role inthe whole process, that is to say, human capital boosts economic growth throughinnovation and change. Furthermore, investment in human capital acceleratesindustrial structuring. Tertiary industry requires a large number of high quality labors,but workers from primary industry are lack in skills, resulting in supply and demandimbalance. Thus, it is necessary to accelerate industrial structuring to change theimbalance.At the end of the paper, suggestions based on China’s overall economy areproposed, which mainly in development and structure optimization of human capital.Specifically, government needs to increase regional human capital investmentincluding further educational investment, reform in higher education and in-depthdevelopment of continuing education. Moreover, strengthened macro-control tohuman capital, improved medical treatment and mature human capital market are alsonecessary. Meanwhile, liquidity of human capital should be increased, social securitysystem should be improved, and government should be more instructive in the flow ofhuman capital and development of talents introduction policy. Therefore, China’shuman capital market will be improved gradually, which is also beneficial to regionaleconomic growth.