The Process Of China's Economic Growth In Investment And Consumption Structure Change

The reform and opening up has brought about great achievements in China's economic development, with ranking 2nd in the world. China's growth model is characterized by the higher ratio of investment to GDP & lower ratio of consumption to GDP in the world. High amount of investment has resulted in China's economic structure imbalance. In this context, it is necessary to change the mode of economic growth. In fact, continuous increase in investment ratio has lead to obvious decrease in investment efficiency, excess production capacity,insufficient domestic demand, widening gap between rich and poor, increase dependency on exports & escalating trade dispute.To some extent, China has become the object of global imbalances blame. Therefore, systematically investigate into internal mechanism of structural changes will pave the way for the transformation of China's economic growth model & sustained economic growth.This thesis employs a standard empirical method in analysing the influential factors in China's economic growth structural transformation and sustainability of economic growth. First, with theoretical and empirical analysis of international experience, basic law of structural change and generalization of influential factors are drawn, which would lay the foundation for the analysis of economic growth structural transformation. Secondly, an empiricl & theortical study shows the stage of China's economic growth structural transformation as well as influential fators.The third part makes an analysis of influence on economic growth structural transformation in China exerted by credit preference constraints and population sturcture change.And tentative study has been conducted on increasing returns characteristics in the process of economic growth structural change for the sake of prospects of sustainability of economic growth.Finally, on the basis of theoretical and empirical analysis, the way of choice for the transmation of economic growth can be deducted.In the thesis, theoretical and empirical analysis demonstrates on the one hand, in the process of economic development, ratio of capital to GDP presents inverted U-shape characteristics with rise followed by fall,which is mainly caused by dual economic structure transmation. On the other hand, China's higher capital ratio has its distinctive features,which can be attributed to government-driven fators and lower financing cost of state-owend enterprises. This thesis, by buliding a growth model, which divides a personal working period into two phases, shows consumer credit market perfection exerts a notable influence on eonomic growth stucture,supported by China-US data labor ratio and demographic changes have significant effect on investment and consumption structure. In the process of China's economic growth, investment does promote progress in productivity but not in eatern regins. The conclution could be drawn that a combination of dual economic structure transformation and government behavior is responsible for higher investment ratio in China.On the whole, China's high capital formation ratio is inevitable yet distinctive. One factor is that in the process of China's economic development, rapid changes in the dual economic structure necessarily calls for a high capital formation ratio. Meanwhile,government action has significant impact on capital formation, beacause the government is more concerned about aggregated economic growth under unconstrained competition, regardless of the cost of economic growth and the sharing of the fruits of growth.Expenditure on production comes prior to welfare in government spending strcucture.Another important fator is the diverse preference in inventment and consumption for China's economic growth model of high investment and low consumption. Moreover, with the pace of China's reform and opening up consistent with demographic dividend, favorable demographic stucture provides not only sufficient labor resourses for economic growth, but also significantly affects the level of investment ratio.