Chinese Technological Progress And Its Improvements To Capital Productivity

After the reform in1978, China’s economy has had a steady and fast growth underthe impetus of the accumulation of capital for more than thirty years. But this kind ofcapital deepening driven economic growth and the high rate of investment could lead toreduced capital productivity, causing the waste of scarce capital resources. According tothe data show that since1996the capital productivity continues to decline, the extensivemode of growth will restrict the healthy development of China’s economy. So china’seconomic growth mode has to be changed. And technological progress is also a strongdriving force of economic growth. Studies prove that technological progress towards thecapital of our country, this suggests that China is entering a technological progress ismore and more towards capital and capital productivity have as capital biochemical andvicious cycle of falling. Although capital productivity decline has a lot of exogenousfactors, but through the CES production function to construct a theory model oftechnological progress and capital productivity, respectively from the Angle of neutral,unbiased and biased respectively to discuss the relationship between the two. Alsodeduces the efficiency of capital and labor efficiency to the capital productivity impactstrength calculation formula, and measure the value of the strength of the1978-2011. Atmeantime in the empirical part measure the direction of technological progress andtechnological progress direction of the region.The results show that: Wholesale and retail trade, catering industry, other services,construction, transportation, warehousing and postal and telecommunication servicesare the industry whose technological progress towards capital. The real estate industrycan be thought of neutral technological progress.Although the technological progressvalue is negative, the absolute value is very small. In these industries, the degree of industrial is the strongest, followed by financial, degree of agriculture is the lowest. Inlabor Biased technological progress industries, the degree of the wholesale and retail isthe strongest, followed by other services and transportation, warehousing and postal andtelecommunication services. Although construction biased towards the capital, but theindex is very low. So it can be seen as neutral technical progress. And from theperspectives of regions and the eastern part of the progress the direction to favor labor,but the bias index is very close to zero, can approximate as neutral technical progress.Central bias degree is strongest in the three areas, obviously showing a tendency ofbiased towards the capital. And the western are biased towards the capital, but muchsmaller.By the results, some industries show that their efficiency of capital intensity ofimpact strength are more than labor efficiency. They are agriculture industry,construction and other services, and other industries. Overall, agriculture and otherservices are elements for labor intensive industry, so capital productivity needs toimprove the efficiency of capital to improve the efficiency of labor. Other industry isbasically to capital-intensive industry, capital brought about by the technologicalprogress of capital productivity has a vital role.The efficiency of capital and labor strength of the efficiency of capital productivityeffect are almost the same. While in the western region, at start the violent reactionstowards the efficiency of capital, in the end the reaction towards the efficiency of labor.Through the analysis of the data, capital inflows should focus on industrial and retailtrade, catering industry. And the east should be driven by innovation technology drivencapital productivity. Central region should increase capital investment to drivetechnology progress and capital productivity. In the western region should stick to thetalent people, because the influence of the western labor efficiency is the largest.