Research On The Relationship Between Industrial Structure Change And Economic Growth Of Zhe Jiang

Since the reform and opening up, China has achieved rapid development with its demographic bonus and the bonus from reform of the system, As well as China has earned its reputation as a big manufacturing country. But in recent years, with the rising cost of production factors and demographic dividend gradually lost, the economic growth become difficult to continue to sustained growth Specially after the financial crisis, with domestic economic structural problems becoming continuously outstanding, such as insufficient effective demand, overcapacity and so on, China’s economy faces new challenges, gradually enter a new period of development. Social and economic structure change increasingly tough, then the impact on the big private economy province of ZheJiang had become especially diffictly. With the cost advantage that supporting the rapid development of ZheJiang economy losting, the economic growth of ZheJiang had to slow the pace of economic development in recent years. According to the structuralism theory of economic growth, as a result of factors of production in different departments can make a difference in the production efficiency, when the factors of production from low productivity of the department to high productivity sector, can increase the productivity of the whole. Therefore, under the new normal, the study of changes in the industrial structure and characteristics of ZheJiang Province is a great significance which can help to dig inherent potential for economic growth and promote development of ZheJiang’s economy.This paper selects the relevant data of ZheJiang province from 1985 to 2013, to research relationship between the change of industrial structure and economic growth. Firstly combing through the relevant literature both at home and abroad and understanding the latest progress in the study of the problem, then to clarify some new ideas.By combing, I found that most studies tend to focus on the influence of the change of industrial structure on economic growth, and some also considering the relationship between them, but mostly just to stay on the examination of causality; For research methods, the traditional quantitative analysis, can only be one-way static relations, and the most of the literature on the variable selection tend to exist colinear problems, so the conclusion is unreasonable. In fact, the unstructured vector auto regression model, and impulse response function analysis and forecasting analysis of variance which establish the base on the VAR, can solve the above problem, dynamically characterize the interaction between them. Therefore, this paper mainly use of this method on the empirical analysis.On the basis of the above literature analysis, this paper starts with the perspective of qualitative to analyze the structure evolution trend of zhejiang, and find the industrial structure evolution lagging behind economic development of ZheJiang. Then the introducing an Angle change of the dot product to represent the three industry changes, and as a measure of industrial structure change, and analyze the relationship between the Angle change and economic growth. The results showed that there may exist relationship, Then, on the basis of qualitative analysis, further empirical analysis. Firstly with the Granger causality test to prove the existence of a causal relationship between them, on this basis, then using the impulse response function analysis and forecasting analysis of variance which based on the vector auto regression model and found they exist a positive relationship, but industrial structure change effect on economic growth, has greater than the effect of economic growth acting on the industrial structure change. On this basis, this paper further to analyze the effect of the structure of the industrial structure change, through the shift-share method to decompose labour productivity growth into structure effect and growth effect. The study found that the evolution of ZheJiang industrial structure lagging Economic growth mainly due to Export Bonus, thus creating a irrational industrial structure that the Second Industry is too large, but the Third Industry development is serious insufficient. But under the new normal of formation after the financial crisis, forcing ZheJiang industrial transformation and upgrading, then, ZheJiang industrial technology has gradually accelerated, industrial structure evolution towards the reasonable direction. Finally, according to the research conclusion, the paper proposes relevant policy suggestions.