The Impact Of Industrial Structure Upgrading On China's Economic Growth

Since the Chinese economy entered the New Normal,economic growth has undergone a transformation from a high speed to a medium-high speed,and the industrial structure and development drivers have undergone profound changes.In the period of economic transformation,China is facing the dual test of structural adjustment and increasing economic downward pressure.In the impact of industrial structure upgrading on economic growth,there are two important theories,namely "Structural Dividend" hypothesis and "Structural Deceleration" theory.Is the impact of industrial upgrading on economic growth a "Structural Dividend" or a "Structural Deceleration" ? At present the academic circle has not formed the unified conclusion.This paper analyzes the internal logic of "Structural Dividend" hypothesis and "Structural Deceleration" theory,and finds that both theories have their own applicable conditions and existence basis.Both of these theories superficially discuss the effect of industrial upgrading on economic growth,but actually they correspond to two different modes of industrial upgrading.Industrial upgrading in the theory of "Structural Deceleration" refers to the evolution of industrial structure to the dominant position of the tertiary industry,and only focus on the services the evolution trend of the size and quantity,without considering the services of internal factors such as input and output efficiency.So,this article referred this mode as "quantitative" industrial upgrading.Correspondingly,the industrial upgrading in the "Structural Dividend" hypothesis evolves towards the dominant position of industries with high productivity.It is a sustainable long-term development mode with high efficiency and quality,which is called "quality" industrial upgrading in this paper.In fact,the "Structural Deceleration" theory discusses the drawbacks of quantitative industrial upgrading,that is,the industrial upgrading led by scale and quantity can significantly promote economic growth in the short term,but the sustainability is not strong,and deceleration trend is shown in the long term.The "Structural Dividend" hypothesis clarifies the advantages of qualitative industrial upgrading,and the industrial upgrading that aims at efficiency and quality provides the internal driving force for economic growth and guarantees the long-term growth.Based on the theoretical hypothesis above,this paper further uses the provincial panel data for empirical analysis to prove the rationality of the hypothesis.In the empirical part,this paper uses the provincial panel data from 2003 to 2017 to analyze the heterogeneous influence of these two industrial upgrading modes on economic growth through the first-order difference GMM method.The research finds that:(1)Qualitative industrial upgrading has a more direct and rapid effect on TFP growth than quantitative industrial upgrading.Qualitative industrial upgrading can directly obtain "Structural Dividend" from the flow of factors to high-productivity industries,and maintain this dividend through the accumulation effect within the industry,thus significantly promoting the growth of TFP in the current period.In the current period,the quality-oriented industrial upgrading has a positive effect on labor's capital accumulation,but the lag period has a negative effect,which indicates that the quality-oriented industrial upgrading uses more capital investment in the short term,while in the long term,it will gradually reduce capital investment and turn to rely on TFP growth to promote highquality economic development.(2)Quantitative industrial upgrading has a negative impact on TFP in the current period,and a positive effect is generated only after a lag of one period.This is because the heterogeneity and externalities of the service industry are strong,so its impact on TFP requires a complex transmission mechanism and a relatively slow process.The impact of quantitative industrial upgrading on labor capital accumulation is not significant,but has a negative trend,which reminds us that industrial upgrading in the form of excessive service may cause the "financialization of nonfinancial enterprises",which is not conducive to capital accumulation.In that cases,this paper argues that the effects of quantitative industrial upgrade on economic growth is relatively slow,the excessive expansion of traditional service industry is not conducive to long-term economic growth.Government should support and encourage the development of more high-tech and knowledge intensive service industries,improving industrial structure to qualitative side based on high technology and efficiency.