An Empirical Analysis On The Influential Factors Of Industrial Structure Upgrading In China

The Chinese economy maintained rapid growth and the optimization andupgrading of industrial structure was accelerated since the reform and opening up.After years of double-digit expansion, the economic environment for industrialdevelopment in China has undergone profound, rapid and complex changes. thetightening of the supply of resources, Increasing environmental pollution load, risinglabor costs, the regional imbalances in industrial development, the internationalindustrial structure changes, the requirement of industrial structures’ upgrade isurgent.The optimization and upgrading of industrial structure need to improve theefficiency of resource allocation through market mechanisms, and also need thegovernment assistance. At present, China is still in the process of improving themarket mechanism. The market mechanism has inherent flaws, the adjustment ofindustrial structure is difficult to achieve relying solely on the market mechanism in ashort time. This paper analyzed the main factors influencing regional industrialrestructuring in order to improve the industrial policies of the Government.On the basis of theoretical analysis, a panel data model is built to study therelationship between capital-intensive industries/technology-intensive industries (themeasure of industrial structure) and factors influencing the regional industrialrestructuring, such as demand conditions, factor supply, technological progress, thedegree of openness and degree of market. On the whole, R&D and the degree ofopening up represent the relative role of the industrial restructuring more consistent.Finally, based on the empirical results this paper offers recommendations to promotethe adjustment of industrial structure.