The Interaction Effect Between The Change Of Industrial Structure And Economic Growth In China

Economic growth is always accompanied by changes in the industrial structure. In the process of China’s economic development, industrial structure is adjusting and upgrading quickly. At present, China’s economy is in a transition stage from rapid growth to a new normal, the industrial structure has basically achieved the transfer from the first industry to the second industry and the third industry, and is now moving towards the post industrialization stage. Since 2010, China’s economic growth rate began to slow down, the economic growth rate fell below 7% in 2015.In the meantime, the output of China’s third industrial has been developing rapidly, the third industry output share of GDP has began to be more than the second industry since 2012,and this ratio has reached over 50 percent. The industry upgrades well. But in this process, there are some problems need to be solved urgently in China’s industrial structure. All along, China’s manufacturing industry mainly centers on low-end manufacturing, the high-end manufacturing and is lagged behind. The disappearance of the demographic dividend makes the second industry advantage weakened, a large amount of capital transferred from the domestic to the Southeast Asia, then our second industry development slowed down. At the same time, the development of the third industry lagged behind has been unable to meet the people’s increasing consumption demand. Therefore, this paper focus on some questions such as "how to adjust the industrial structure”, “how the development of different industries affects the others”,” what is the interaction between the change of industrial structure and economic growth”. To answer the questions above, theoretical research and empirical study are carried out in this paper. First, we comb relevant theory, summarize different theoretical analysis and empirical research by different scholars, grasp the contents and main points of this paper in general. Then, in order to find out current situation of China’s industrial structure development and economic growth, this paper shows us the result of dynamic analysis and comparative analysis of the data of industrial structure and economic growth in general and provincial level. Finally, we establish PVAR models of national and the eastern, central and western regional using the provincial data from 1993 to 2014 in the empirical research to analysis the dynamic interaction between industrial structure and economic growth and compare the difference among dynamic interaction above in different regions. Through the above research, this thesis obtains some conclusions: the upgrading of industrial structure can promote China’s economy developing more rapidly, but the improvement of economic growth cannot drive industrial structure adjustment. Industrial structure upgrading in the central region will reduce the region’s economic growth rate, and the interaction between industrial structure change and economic growth in western province is weak. As for the relationship between the second and third industry, in the eastern region, there is a good dynamic interaction between the second and third industry; but not yet in the center or west. In order to maintain the rapid economic growth, China should promote industrial structure upgrading actively, accelerate to transfer resource and labor intensive industry from the eastern regions to central regions, concentrate on the development of high-end manufacturing industry and service industry in eastern area, then central region should continue to develop the second industry as the leading industry to promote development of the region economy. In the western region, local government need try to explore local advantage industries or comparative advantage industries, then develop relevant industries to create regional advantages.