The Relation Between Infrasturcture And The Economic Development In Jiangsu Province

Since China's adoption of reform and open-up policy in 1978, Jiangsu Province has achieved a rapid economic growth, with the average annual growth rate of GDP per capita at 11.3%(counted with comparative price). In this process, the role of infrastructure in pushing the economic growth receives great attention. Study on the pushing effect of infrastructure on the economic growth will help the stipulation of proper infrastructure development stratigy, so as to push forward economy and narrow the regional gap.In this article, the author focused on the importance and role of infrastructure sector in the economy of Jiangsu Province, based on basic economic theories, the author used statistical and econometric methods, theoretical and empirical analysis, and discussed comprehensive on the relation between infrastructure and economic growth. The author focus on the mechanism through which infrastructure impact the economic growth, and what a role infrastructure play in regional disparity. The author pointed out that:(1) From both input and output perspectives, the infrastructure sectors come to be more and more important. Their contribution to the economy has enhanced. (2) Infrastructure investment has a significant "Crowd-in" effect on the aggregate investment in Jiangsu, i.e, a certain increase in infrastructure investment will lead to more investment in other sectors. (3) The author analyzed the relation between infrastructure distribution and economic disparity, and found that infrastructure influenced the regional disparity through industry allocation. Industries tend to allocate in the infrastructure-sufficient area. The author analyzed the allocation of heavy industries, export, foreign-funded enterprises, and found the influence of infrastructure exists in Jiangsu Province. On this basis, the author developped a System Equations (SE) and testified the hypothesis, by using Panel Data of 13 cities in Jiangsu from 1996 to 2004.In conclusion, the author proposed some policy suggestions of the research to serve the purpose of accelerating economic growth and narrowing the regional economic gap.