Driving Mechanism Of The Optimization And Upgrading Of Chinese Industrial Structure

After over thirty years’“factor–driven” growth based on the scale factor input,China’s overall economic strength has been significantly improved. But as for long-termdependence on high factor inputs, economy has shown a lot of structural problems, andthe industrial structure evolution has been lagging behind economic growth. Thereby, ithas affected the sustainable growth of our economy."Innovation-driven" developmentmodel is the development trend of China’s economy. This paper tries to systematicallyclear up the mechanism that the "factor-driven" development model and the "innovation-driven" development model improve the industrial structural change and the economicgrowth, to provide theoretical support for our country to change the development modeland achieve the optimization and upgrading of industrial structure.This paper systematically analyzes the mechanism of the "factor-driven"development model and the "innovation-driven" development model to promote theoptimization and upgrading of industrial structure, and points out "factor-driven"development model is not sustainable, as well as the existence of path dependence to the"factor-driven" development model. Then using contribution Elastic analysis, this paperempirically demonstrated the optimization affects of the factor allocation of the"factor-driven" development model and "innovation-driven" development model, and thepossibility of the economy trapped in the path dependence to the "factor-driven"development model.Results of this study show that the " factor-driven " model of development achieves apreliminary industrial structure optimization and upgrading,and the foundation ofindustrial structure for the further evolution through capital accumulation effect andindustry discrete effects; but the existence of the path dependence to the "factor-driven"development model may cause distortions in the industrial structure, and lead to thestagnation, and even collapse, of the economic growth; only "innovation-driven"development model can ultimately achieve the upgrading of China’s industrial chain andthe industrial coordination, finally achieve the sustainable economic development.