Study On The Dynamic Effects Of The Urbanization Development And Economic Growth In China

Nowadays, due to the decline in the potential growth rate and weak demand both at home andabroad combined with overcapacity in some industries and tightening resources, energy andenvironmental constraints, the economic development in China is entering the new normal periodwhich is accompanied with moderate growth and structural adjustment. The high-quality growthunder the new normal needs a new motive power among which the urbanization is considered tobe this new engine of promoting our country’s sustainable economic growth in the next stage.However, the long-term extensive urbanization developing mode in our country caused a series ofproblems including low efficiency, excessive consumption of land resources, environmentalpollution, ecological destruction and so on, which restrained its own development and thesustainability of economic growth in China. In view of this, exploring the correlation and dynamiceffects of the urbanization and economic growth is of great importance for walking out of a green,intensive and sustainable new road of urbanization and promoting the sustainable high-qualityeconomic growth.This paper firstly analyzes the mechanism of inner relation of the urbanization and economicgrowth and has a comprehensive understanding of the status quo and disadvantages that exist inour country’s urbanization and economic development to clear the problems to be solved, on thebasis of which considers a number of indicators involving the urbanization developmentcomprehensively, establishes an evaluation system and measures the historical level of theurbanization development in our country through factor analysis. The result shows that the overalllevel of the urbanization development in our country was on the rise from1996to2013, whichindicates that our government’s strategy of keeping promoting urbanization development in thepast has obtained good results. Specifically, the population, economic and social development aswell as the infrastructural construction and the progress of the innovation and R&D in the masshas been improving, but the resources and environment index appears sharp drop, which indicatesthe neglect of the protection of ecological environment in the process of the urbanization in ourcountry before. Finally, this paper uses time-varying parameter vector autoregressive model tostudy the dynamic effects of the level of the urbanization dev elopment and economic growth.Thereinto, the research on the economic growth is based on both its speed and quality. Theempirical result shows that urbanization can not only accelerate the speed of economic growth butalso improve its quality. On the contrary, high-quality economic growth will enhance the level ofthe urbanization development, but simply pursuing the economic growth rate will produce inhibition. Based on the outcome of the theoretical and empirical research above and combiningthe current situation that the economic growth in our country is slowing, this paper suggests thatwe can try to drive the economic growth via the effective advance of urbanization to cope with thenew normal in the new period, continue to play its role and value as a powerful engine ofpromoting economic growth to achieve the goal of improving the quality of economic growth andurbanization development and people’s livelihood in China.The innovation of this paper lies in: Firstly, considering multiple indicators covering sixaspects of population, economy, society, resources and environment, infrastructure and innovationand R&D to establish an evaluation system of the level of urbanization development in China andmeasures its real level objectively and comprehensively from a number of perspectives; Secondly,exploring the interaction mechanism between the urbanization and economic growth from twoaspects of the rate and quality of economic growth so as to avoid the one sidedness of simplyanalyzing the speed; Thirdly, adopting time-varying parameter vector autoregressive model toanalyze the dynamic effects of the relationship between the urbanization and economic growth andexplore the time-varying characteristics and phase difference.