The Impact Of Economic Growth On Urbanization

Since the reform and opening up in 1978, China has been transformed from the world’s most populous country into an economy with average annual GDP growth rate of around 10%.Accompanied by such a high growth rate, the economy doubled in size every seven years, China has already been middle-income countries from the low-income countries in 2008. Along with economic growth, Chinese cities developed fast, the speed of urbanization has reached twice the speed of that of the world in the same period, exceeded 50% for the first time in 2011. However, after the global financial crisis, a phase of sustained double-digit annual economic growth has ended, China is experiencing a game between urbanization and economic growth, both of which exist some kind of relationship in some way.There is still some controversy on the research about the relationship between urbanization and economic growth, what exactly should be urgently explored. Latin America once appeared the highly urbanized and low economic status co-exist.Unlike previous studies which considered urbanization part of economic growth, reversely thinking, mainly studied on the role of economic growth for urbanization. In order to fully reflect the real situation, based on 1990-2012 annual inter-provincial panel data, not limited to two factors, adding a large number of control factors, including the degree of industrialization, education level, etc., using a fixed effects model, instrumental variable method and dynamic panel GMM estimation model, considering the key factors affecting urbanization.The study found that economic growth for the urbanization does have a significant impact on promoting development of urbanization, but has a strong timeliness.; industrialization always promotes urbanization; the role of the level of education for the role of urbanization was positive, but sometime insignificant, possibly affected by China’s separation urban and rural household registration system. While dependence on foreign trade also impacts the urbanization significantly, nevertheless, the parameter symbols are not so clear. The key factors that impact on urbanization also include network density, representative of the infrastructure construction level, which positively promotes the process of urbanization.These conclusions will provide certain scientific basis for the policy makers to formulate relevant policies and measures to avoid "Latin American trap" in the process of promoting the "new urbanization".