| Since Reform and Opening,China's economy scale has expanded continuously,and GDP growth rate was always above world's average level,which made China the world's second largest economy.However,imbalance problems including industrial structure,technical structure and supply and demand structure emerge obviously nowadays.Therefore,in order to overcome the negative factors of China's development,Reform of the Supply Side,which targets at resolving industrial overcapacity,pushing forward structure readjustment and balancing supply and demand,becomes important method so that China could gain sustainable development and realize the innovation-driven growth.Accordingly,this paper,based on D-S model,tries to discuss the formation mechanism of industrial overcapacity and the way to upgrade industrial structure.Firstly,D-S model is used to demonstrate that technical innovation is important to meet consumer preference,and the dynamic change of demand is also concerned to explain the formation of industrial overcapacity.Additionally,technology imitation and patent protection model is applied to analyze the access to high value-added industry.Secondly,the paper tests the cointegration relationship among technology advancement,domestic demand,human capital,FDI and industrial upgrading according to the data from 1995 to 2015.Besides,pulse response analysis proves that technology advancement and FDI shows time-lag to the shock of industrial structure,and domestic demand and human capital are vital to the existence of high-tech industry.Furthermore,variables make differentiated contributions to industry upgrading according to variance decomposition.Finally,the paper proposed several suggestions which could prevent overcapacity,boost technology advancement and optimize economic structure based on the conclusions and results mentioned before. |
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