The Comparison Research On Economic Development And Driving Factor In Zhejiang And Jiangsu Province

Zhejiang and Jiangsu province, since the reform and opening-up, have both achieved remarkable success in economic development, and the levels of economic growth, people’s living standards are among the best in the country. However, in recent years, Zhejiang province has lost its advantage in some economic growth indicators like GDP per capita, GDP growth and so on. Moreover, those indicators values of Zhejiang have been lower than those of Jiangsu and the gap seems to be widened gradually, which has aroused concern of scholars and government.Zhejiang and Jiangsu province both belong to the Yangtze River Delta economic circle and two provinces have similar regional advantages. So, what is the exact reason that causes the economic development of Zhejiang to lag behind Jiangsu? And what is the fundamental difference between Zhejiang’s and Jiangsu’s economic development? With detailed comparison of the data and in-depth empirical analysis, this article intends to display the evolution trend of the economic development of Jiangsu and Zhejiang provinces, to reveal the key drivers of economic growth and to explore the basic reason why Jiangsu’s economic can develop that rapidly, also it’s important to reflect the problems exist in Zhejiang economic development and to provide basis of making relevant policies.This article implements research from following aspects. Firstly, this article makes a detailed description and comparative analysis of Zhejiang and Jiangsu economic development situation between2000and2012from four aspects:economic growth, people’s living standards, economic development elements and government policy supports. Secondly, consumption rate and investment rate of Zhejiang and Jiangsu are calculated in the article, also the pulling rate and contribution rate of consumption, investment and net exports on GDP are calculated based on expenditure accounting approach, through which the contribution which the three major demands make to Zhejiang and Jiangsu economic can be clearly compared. Thirdly, this article calculates the TFP value and TFP growth of Zhejiang and Jiangsu from2000to2012with Solow residual method based on C-D production function, by which the contribution technological progress make to economic development can be reflected. Finally, this article uses panel data of30provinces between2000and 2012to establish the panel model on the basis of expanded C-D production function, estimating the output elasticity of the capital stock, employees, FDI, investment in education and R&D investment and calculating the contribution rate of each element for economic.The research results show that:the economic growth level and rate of Zhejiang are indeed lower than those of Jiangsu, but the industrial structure in Zhejiang is more reasonable, and people’s living standards and livelihood security in Zhejiang are of a higher level, also, the Zhejiang government pays more attention to people’s livelihood development. It shows that at this stage, the level of human capital of Zhejiang Province is higher than that of Jiangsu, the progress of science and technology level of Zhejiang is also lower than that of Jiangsu, and the disadvantages in the contribution rate of science and technology is probably the main reason why the economic growth level of Zhejiang are lower. Meanwhile, it also shows that education investment level in Zhejiang is higher and the contribution rate of R&D activity is also lager, therefor it is reasonable to believe that the potential for economic development in Zhejiang will be better in the future.