The Influence Of The Economic Growth On Urbanization

Since the reform and opening up, Chinese economic has grown continuously and rapidly. During 1978 and 2013, average annual real GDP growth rate was 10.36%, far higher than the world economic growth with the same period. By 2014. China’s gross domestic product exceeded 10 trillion dollars, which makes China the second largest in the world. Along with China’s economic boom, the living standard of residents is increasing day by day, experiencing the change From poverty to the food and clothing to the well-off level. At the same time, China’s urbanization process has never ceased, urbanization level has improved significantly. In 1978, China’s urbanization rate was only 17.92%, belong to the primary stage of urbanization. By 1998, the urbanization rate had increased to 30.4%, reached high-speed development stage of urbanization. By 2013, the urbanization rate has been 53.73%, which means the rural population is firstly more than the urban population. China’s urbanization processed to a new level. Chinese urbanization has great significance in changing China’s urban-rural dual structure, promoting China’s economic development and enhancing the international competitiveness of China under the background of globalization. As the world’s most populous country, China’s urbanization process not only has a significant influence on domestic factors, also on the integral pattern of the world. Nobel laureate in economics Joseph Stiglitz believes "China’s urbanization" and "American high-tech" are the largest two factors which has impact on development of human society in the 21st century.Under the background of the study, based on the principle of data availability, this paper selected the 203 Chinese cities in 1994-2012 panel data, chose urbanization rate and GDP index, and used the spatial econometric methods, to explore the effects of economic growth to the level of urbanization in our country. The empirical analysis part consists of two portions. In the first part, it’s about 203 cities across the country for regression analysis, to explore the promoting effect of economic growth to urbanization. In the second part, this article divides the samples into three areas by introducing two dummy variables, and then uses spatial econometric model regression to explore if the promoting effects of economic growth to urbanization are the same in different regions. The specific modeling analysis is in the following order:First of all, this article estimated the ordinary fixed effects regression model, and analyzed the simple regression. Secondly, according to Moran’s I text, this article drew the conclusion that the model had spatial correlation. Then we used LM test and the steady LM test to select the spatial econometric model according to the Anselin&Florax (1995) criterion. And we determined the spatial lag model should be used in this article. Finally, this article identified to use the fixed effects spatial lag model according to the space Hausman test, and used the estimated results for further analysis.This article considers the spatial correlation between cities and explores the effect of economic growth on urbanization using spatial econometric model; this article gets the results of the estimation and gives relative precise conclusion and policy suggestions. This paper draws the following conclusions:(1)The urbanization process of neighboring cities has strong spatial correlation; (2) Economic growth can promote the improvement of urbanization level; (3) The industrial structure adjusts to the second and third industry can promote the improvement of urbanization level; (4) The improvement of the urban and rural infrastructure can promote the urbanization process. (5)The promoting effects of economic growth to urbanization are different in different regions.According to the empirical conclusions and combining with the reality of our country national condition, this article finally puts forward the following Suggestions:Strengthen the cooperation between the two cities, agglomeration economy, achieve more economies of scale; Each region determines the urbanization development goal according to the actual state of the economy and we can not blindly pursue the expansion of city scale; Adjust the industrial structure, and pay attention to the development of the second and third industry, especially vigorously develop the third industry; Improve the infrastructure construction, pay attention to improve the quality of urbanization; Promote China’s urbanization process scientifically, to realize the comprehensive, coordinated and sustainable development of urbanization; Attach great importance to the economic construction in the western region, and try to narrow the regional differences.