Interactive Development Between New Industry And Traditional Industry In China

After the financial crisis, many countries have realized that technological innovation would be the new engine of the next round of economic growth, and then shifted the focus to cultivate and develop new industries. The world is entering an unprecedented period of economic restructuring and innovation-intensive, and the competition around the commanding heights of science, technology and industrial development is increasingly fierce. Facing with the wave of globalization technological innovation and internationalization industrial form, china makes the strategic choice to take innovation-driven and endogenous growth path, vigorously cultivating and developing strategic emerging industries to seize the new industrial commanding height. Meanwhile, China’s traditional industrial structure needs upgrading. As the economy continues to develop, rapid changes in factor endowment structure and the gradual disappearance of traditional advantages threaten to China’s sustained and rapid economic development. At present, China is facing the two missions appearing in the upgrading of traditional industries and cultivating of new industries. The economic development stage, the inherent requirements of industrial structure adjustment as well as the global industrial competition pattern jointly decided to achieve our sustained economic development we must correctly handle this two missions. So how to formulate industrial policies suitable for different areas so as to achieve the mutual support and positive interaction between the development of new industries and the upgrading of traditional industries in the context of imbalance economic development and different comparative advantages for cultivating new industries in China’s different regions become a reality. This paper measures the current situation of new industry and traditional industry of eastern, central and western regions in China as well as the interaction and coordination status between these two industries from a technical level, and further explores the internal and external influential factors on industrial interaction, in order to provide a more objective and direct evaluation basis for the theoretical policies put in different regions.Content of this paper is divided into six parts. First, this paper summarized the theoretical and empirical research on the development relationship between new industry and traditional industry, and then analyzed the differences and insufficient in existing research, combined with the status of China’s economic and industrial development. Second, the paper explained the interaction mechanism between these two industries with diverse perspectives from factor mobility, industrial structure evolution, division theory, industrial distribution and value chain. Third, the paper selected Chinese provincial input-output data in 2002 and 2007 and designed evaluation indices concerned industry interaction to quantitatively analyze the interactive demand and ripple effect between new industry and traditional industry of eastern, central and western regions. Fourth, industry association coordination index system to evaluate development status of industrial interaction was made and the regional differences and change trend of the coordination status of interactive development and its influencing factors between new industry and traditional industry of the three regions were measured and compared based on the gray relational method for 2001-2012 provincial panel data in China. Fifth, based on Chinese provincial panel data from 2001 to 2012, the paper explored the external influential factors that have significant effects on the interactive relationship between new industry and traditional industry, and then found out the external source of regional differences in the interaction between these two industries from the national and regional perspectives. Finally, according to the research findings, combining with the interaction mechanism and the reality of economic and industrial development in China’s eastern, central and western regions, this paper discussed the suggestions to achieve the positive interaction and coordination between new industry and traditional industry from two perspectives of industrial policy guidance and key industries promotion.The main conclusion of this paper is divided into four parts. First, the interaction for demand between new industry and traditional industry in the three regions is not significant. The pulling power of new industry on traditional industry is stronger than the counterforce. Differences in industrial structure and development level of different regions lead to the significant regional characteristic of traditional industry’s demand for new industry. The interaction between the eastern industry and its new industry sector is best among the three regions, and eastern traditional industry demands new industry most urgently to achieve its transformation and upgrading. Second, the ripple effect between traditional industry and new industry is not significant, the dependency and integration between these two industries is poor, the both industries especially new industry show cumulative feature of self-service and self-loops. Third, the coordinated development status between new industry and traditional industry in the three regions is not significant. Although the correlation degree between these two industries are much stronger, the integral coordination degree is not so high, and exists obvious regional differences, which presents a spatial distribution of higher in the central region and lower in the eastern and western regions. Meanwhile, there are large spatio-temporal evolution differences of coordination degree in each region internal. Fourth, urbanization has a significant inverted u-shaped effect on industrial interaction, and the range of positive effect in the east is largest, followed in the west and central minimum. Industrial spatial agglomeration effectively promotes the industrial interaction, and the positive effect is most significant in the west. The effect of the government’s financial support for science and technology innovation activities of new industry in the three regions is not significant. The increasing regional investment in R&D has positive effect on industrial interaction, and western industry demands innovative technology most urgently to achieve its transformation and upgrading. However, the homogeneity of eastern industrial structure hinders the innovation environment to a certain extent.