The Economic Institute On How Industry Transfer Promotes Urbanization

Urbanization level is one significant milestone of the development of countries around the world. Different suggestions on how to improve the level of urbanization have been given by many experts, mostly focusing on the interaction of industrialization, industrial structure and urbanization. While the interaction of industrial transfer and urbanization is rather rarely discussed. Having undertaken the fourth international industrial transfer, eastern coastal areas of China enjoy a rapid development ever since, and as a result of that, urbanization process in these areas have advanced greatly. Thus it would be absolutely doubtless to say that to some extent, industrial transfer could promote urbanization. Considering that underdeveloped areas at the middle and west part of China still lag behind when it comes to urbanization level, we may take good advantage of the benefits of industrial transfer from the eastern coastal area. Needless to say, the developed east part of China have to accelerate economic transformation and upgrading and sustainable use of resources, due to increasing pressures of limited soil and water resources, ecological and environmental concerns, as well as rising costs. Thanks to a relatively complete industrial system in the west, it will be a win-win situation to transfer labor concentration industries as a priority, absorbing migrant workers and accelerating industrial clustering and population agglomeration to form new metropolitan areas. So the industry convergency for the east and middle-west is one key factor in optimizing Chinese national urbanization structure. The purpose of this paper provides its strategic suggestions, based on the research of the economi8 c mechanism on how to promote urbanization by industrial transfer.Firstly, due to the current situation that urbanization level in different parts of China is vastly imbalanced, this paper gives the opinion that industrial transfer could contribute to the development of the middle and west. Secondly, based on current research and analysis results of industrial transfer and urbanization, combining several practical cases, we try to find out its relationship, or interaction as mentioned above. A theory frame is thus presented on how industrial transfer promotes urbanization, holding that industry transfer from developed regions into underdeveloped regions changes local production factors and institutional arrangement, thus improving its industry structure and employment structure, promoting local economic development and income level, and ultimately, urbanization.This paper gathers Chinese National Provincial Panel Data from 1993 to 2012, using static panel data model to analyze how resources mobility and industrial structural changes affect the level of urbanization in the process of industrial transfer, comes to the conclusion that, the flow of labor, capital and technical factors do not pose a direct impact on urbanization level, which is relatively insignificant, but the industrial structure and salary level, contrary to the former one, raise urban population ratio significantly, which we define as direct effects. The result is well matched with the theoretic analysis of promoting urbanization by industry transfer.To further illustrate the realistic impacts, this paper have extended to the successful experience of the east and pilot project in River Wan city groups on how the industry transfer promote urbanization, assuring whether the theoretical analysis matches the reality, and thus extracting development experiences. It tries to understand the obstacles for the transfer to be conducted in the middle and west, based on local situation, presents the final strategic suggestion to promote urbanization by industrial transfer.