House Prices And Industrialstructure Adjustment

China has achieved the miracle of rapid economic growth during the past30years of reform and opening up, however, the rapid growth of China’s economy is in the background of international division of labor and international industrial transfer. Over the past decades, China has always had the comparative advantage of low-cost resource elements, therefore, it has attracted a large number of companies to invest in China, successfully depending on undertaking industrial transfer to boost the rapid development of various regions of the country. However, with the increasing scarcity of land resource and the constraints of environment and resources, every province and city are faced with the pressure of increasing house price, leading to a sharp increase of production costs, and the comparative advantage is gradually lost. Based on this, and faced with the situation of rising house price, this paper studies the mechanism of house price change’s impact on labor mobility and the industrial structure adjustment, trying to provide theoretical guidance on formulating reasonable price control policy and industrial support policy.Firstly, this paper is based on the CP model of new economic geography, and puts the house price factor into this model. The model shows that the industrial structure between regions depends on the difference of house price, and the larger the difference of prices between regions, the greater the difference of industrial structure between regions. In analyzing the transmission mechanism of change of house price resulting in adjustment in industrial structure, we reached the conclusion that increasing house price will force some labor and enterprises which cannot bear the living cost and production cost to transfer to outlying areas. On this basis, this paper collected relevant data of41industries of36large and medium cities in China from2001to2011, classifying the industries into two types of capital-intensive type and labor-intensive type, doing full sample empirical analysis. In the meantime, the36cities are divided into east, central and west regions according to geographical locations, establishing panel model respectively to do econometric analysis. By analyzing the house price’s impact on the workers and industry output value’s proportion of the two types industries, researching the impact of changes in house price on industrial structure adjustment.Research findings:within the scope of the national level, current house price and house price of the lagged phase have different impact on capital-intensive industries and labor-intensive industries. Among them, current house price has promoted the development of labor-intensive industries and inhibit the development of capital-intensive industries; house price of lagged phase has the opposite impact on different industries, but the promotion function of house price of lagged phase on capital-intensive labors is not significant. In the panel statistics of various regions, we found that this is maybe because that the promotion effect of price of lagged phase on capital-intensive labor in east region is offset by the extrusion function of labor of this type in central and west region. House prices of different phase have different impact on different industries, and this is due to the difference of transmission mechanism of impact on labors of different types. The majority of workers in labor-intensive industry rent houses, and the rent changes with time lag, and at the same time, the rise of house price in short term will lead to the development of labor-intensive industries to some extent; the workers in capital-intensive industries mainly buy houses, therefore, the rise of house price will lead to the extrusion effect of labor who are willing to buy houses at the current phase, and relevant capital-intensive companies will take some measures in order to get sufficient labor, and this takes time, therefore, the house price’s promotion effect on capital-intensive industries’development has time-lag.We can see from the different impact of three regions’house price on the adjustment in industrial structure that the change of house price leads to the migration of labor-intensive industries to the central and west regions, and the capital-intensive industries to the east region. That relatively high house price in the east region pushes out low value-added industries such as labor-intensive industries, provides space for capital-intensive industries’development, achieving industrial upgrade, gradually stepping to the later stage of industrialization; the central region successfully undertakes the labor-intensive industries transferred from the east region depending on relatively low labor cost, but at the same time it is lack of talents and does not have the ability to develop capital-intensive industries, and it has certain distance from the middle stage of industrialization; the west region well undertakes the industries transferred from the east region and achieves industry upgrade, and in the meantime, the capital-intensive industries in this region is affected by the concentration of business scope and technical overflow of the east region, so the west region is still at the primary stage of industrial development. In conclusion, the different impact of house price on the adjustment of industrial structure in different regions makes the capital-intensive industries and labor-intensive industries to flow in the east, central and west regions, and forms a gradient distribution of industrial structure across the country.