Comparative Advantages,Appropriate Technical Progress And The Development Of Modern Industry In China

To pursue modernization and develop modern industry is the common goal of developingcountries and areas in economic development. Due to multifarious factors in both history andreality, there generally exists a "wave phenomenon" in developing countries and areas, whichis, in a short period, the local government, enterprises and financial institutes simultaneouslyhave high return expectation in some emerging industries. Large investment wave to thoseindustries and irrational exuberance appears. When this round of social investment completed,excess capacity is inevitable. Enterprises suffer losses or even bankruptcy, the governmentaggravate policy burden while the banks have more bad and doubtful debts. According to thecore opinion of this paper, behind the "wave phenomenon" imply the industrial policies thatdepart comparative advantage and inappropriate technology selection.In part of the theoretical model, this paper through micro framework of the factorendowment structure and macro-analytical of the two-sector model with the dynamic evolution,which find that the development style of modern industry and technology choice areendogenously decided by the economy's endowment structure. To the Philosophical sense pointof view, the development process in modern industry also follows the principle "Quantitativecause a qualitative change". Combined with spatial econometrical models, we find that modernindustry in our country presents a more significant characteristic of cluster. Eastern coastal areasespecially Yangtze River Delta, Pearl River Delta and Bohai Ring Megalopolis have become intoChina's modern industry accumulation region, while the central and western regions are laggingbehind. This spatial distribution pattern can be explained from two aspects: On the one hand, theendowment structures between the regions are divergent. On the other hand, regions′industrialpolicies following or contrarying to the comparative advantages.The core conclusion and main opinion is as follows: firstly, factor endowment is the mostimportant constraint factor for economy confront with industry and technology selection underany open and race condition. If the economy choosing industrial development policiesaccordingto its comparative advantage, it can not only get the fastest pace of capitalaccumulation,but also get the maximum output. Secondly, how modern industry developsgreatly depends on the abundance degree of high-end elements. So government of developingcountries and areas should pay attention to how to promote structure upgrade of factor endowment rather than merely pursue modern industries and advanced technologies. Thirdly, ifthe governments ignore local factor endowment structure and continue to select policiesdeparting comparative advantage, the modern industry development will just get the oppositeeffect. As a result, in modern industry development, the most ideal condition is to be a flexiblegovernment. Fourthly, policy cost for violating comparative advantage has regional differences.In comparison, the departing in selecting the best technology due to violating comparativeadvantage will cause the areas with better economic development and higher factor structurelevel to undertake higher marginal cost. Fifthly, modern industry spatial organization adjustmentand perfection, the realizing of node and hub function, trend of technology localization, andevolution of industrial structure and value chain governance mode based on factor endowmentstructure, will effectively improve modern industry operating efficiency.