Research On China’s Government Investment And Industrial Structure Rationalization

Industrial structure adjustment and optimization affects the sustainabledevelopment of the economy, and is related to the ability for China to stridesuccessfully across the " middle income trap". Now it has become a hot issue inChina’s economic life. The adjustment and optimization of industrial structureincludes the advancement and rationalization of industrial structure. The two aspectsare interdependent and mutually influential, and promote each other. They are affectedby investment, consumption and export and so on. China’s government investment isvery huge because China has been implementing the development model of"government-led market economy "for a long time. The huge government investmentinevitably has an impact on the rationalization of industrial structure. It is not onlyrelated to the transformation of government investment, but also related to the path ofChina’s industrial structure adjustment and optimization whether governmentinvestment has played an active role in the process of rationalization of industrialstructure. Therefore, the research on the relationship between government investmentand industrial structure rationalization has important theoretical and practicalsignificance.So I start with the normative analysis to explore the relationship between China’sgovernment investment and rationalization of the industrial structure in this paperthrough the extensive collecting, reading, sorting and researching related literature. Ialso analyze the positive and negative affect of China’s government investment onindustrial structure rationalization, and draw the corresponding conclusion. And then,according to the data of1985-2011Chinese statistical yearbooks and comprehensivestatistical data and materials on60years of new China, I use the measuringinstruments such as deviation coefficient model, co-integration and Granger causalitytest to further analyze from the perspective of empirical analysis what role thegovernment investment has played on the industrial structure rationalization on thetheoretical basis of the resource allocation theory.The research results show that there is no Granger causal relationship betweengovernment investment and rationalization of the industrial structure though there arelong-term stable relationship between them. It means that the two are almostindependent, and the government investment has a small positive effect on therationalization of industrial structure. Therefore, this paper suggests that the government should control the amount of government investment properly, reformgovernment official performance evaluation mechanism, determine rationalgovernment investment structure, and standardize the operation of political power ofgovernment from the view of promoting the rationalization of industrial structure.