| This article will, under the background of economic growth, research ontechnological choice and technology progress in the process of industrializationsince China's opening and reform.Why China's economic growth keeps a continuous high speed, butimprovement of the common people's life becomes increasingly slowly? Explainingthis issue is the original intention of this article. After reading plenty of papers onChina's economic growth, we find, in spite of divarication on data's issues, China'sfactor-driving economic growth has got obvious achievement. The efficiency ofChina's economic growth is not so good. Many studies reveal that Chinaexperienced a positive but slow productivity growth after opening and reform,among which there is an important problem, that is, technology progress of China'seconomic growth has become more slowly since middle 1990s, and the reason lies inadverse capital-deepening.Capital deepening means "capital compelling labor", but it happened in thecondition of labor surplus. This issue not only brings me into an academic palace,but also provides me a convenient window to survey China's economic realities.Capital deepening is the possible reason slowing down technology progress, and alsoreflects the relative change of factors allocation, and in sequence, influences incomedistribution. Consequently, for research on efficiency and equity in the process ofeconomic growth, capital deepening is a good starting point.In Chapter 1, through an ideal capital deepening story, this article will verifyChina's economic realities according to every plot of the story, Through which thestructural arrangement of this article is formed.Chapter 2 reviews on studies on China's economic growth and its efficiency,including research conclusion and methods. Additionally, as there is doubt on data ofChina's economic scale and economic growth, this article also retrospects relativeresearch, on the base of which brings forward the routine of data processing.In chapter 3 through data verifying and construction and index choice, thisarticle analysis the periodiotical and structural tendency of capital deepening.Spending lot of words on data issues, then getting judgments on capital deepening, could provide a credible verification of current dispute on capital deepening. We find,China did experience an acceleration of capital deepening since middle 1990s, andthe tendency of capital deepening various from different types of enterprises, amidwhich the speed of SOE's capital deepening is obviously higher than that of othertypes enterprises.Chapter 4 using DEA method, computes technical progress of China'sindustries in 1985-2003, analyzes positively transitional characteristics of industrialtechnical progress, and tests the relativity between technical progress and profits ofChina's industries. Main conclusions include: (1) From 1985 to 2003, industrialtechnical progress was low as a whole, and hadn't become the main factor promptingindustrial economic growth. Technical progress trends varied in different stages; (2)Industrial technical progress saw evident transitional characteristic. Opening towardsforeign markets favored significantly technical progress (especially technicalchange), market centralization promoted technical change positively, and exerted anadverse effect on technical efficiency, but the effects of state-owned property rightson technical progress were on the contrary; (3) Market competition was beneficial totechnical progress embodying on industries' profits. The combination of monopolyand state-owned property rights in high proportion, not only did harm to technicalprogress, but also crowded out profits of competitive industries in lower position ofindustrial chains, which enabled considerable monopoly profits in the absence oftechnical progress.Chapter 5 researches on the reason of capital deepening. A favorablevindication for capital deepening is that capital deepening is necessary as technologyis essential for economic growth. So firstly, this chapter make cointergration andcasualty tests on the relationship between capital deepening and technology progress;secondly, as capital deepening means change of factors relative quantity, and in amarket process of factor allocation, change of factors' relative quantity isaccompanied with that factors' relative price, this article then makes a comparativeanalysis and cointergration test on index of capital deepening and wage-rent ratio,which is an important aspect of judging fitness of capital deepening; at last, when weget an negative answer in above two tests, we analysis non-market factors thatresulting of capital deepening.We find, at least in the second industry, capital deepening is not successful,because it didn't cause technology progress; capital deepening since the middle of1990s is not suitable, in that factors' relative quantity changed faster than factors' relative price did in that period, furthermore, in the whole period after 1985, there isnot an statistically stable relation between capital deepening and factor's relativeprice; china's high investment belongs to an institutional investing impulse, and theacceleration of capital deepening since the middle 1990s is relative to the foundationof system of tax distribution in 1994 and the judgment that the economy turning tobuyer's market from seller's market.Chapter 6 analyses how china's economic predicament is formed with thestarting point of capital deepening. Given non-market factors resulting of capitaldeepening in the condition of labor surplus, employment could not be improved inthe pace of economic and capital growth, and labor surplus keep the wage levelstagnant, which will bring about a wider gap between property income and laborincome, and the direct result is wider income gap between the rich and the poor. Asthe existence of great disparity, consumption demands of the majority, whosemarginal consumption tendency is higher, is constrained instead of upgraded, thendemand for final goods shrinks, which means internal demand insufficiency; at thesame time, increasing investment causes prosperous demand for capital goods, andsequently, results in investment over-heated. Such kind of circulation finally forms atrouble—over-supple of capital goods and insufficient demand for final goods. Onthe other hand, in a gradually open international economic system, stagnant and lowlabor income provide China lower cost advantage in global competition, and in thissituation, the less-developed country, with insufficient internal supple and surplusproduction capacity, have to engage in external demand expansion for its' low pricecommodities. This is china's economic predicament, whose characteristics includeincome gap, insufficient internal demand, environment deterioration, and excessivedependence on external demands.In chapter 7, this article analyses industrialization experiences of other countries.Though prospective of industrialization processes of other big countries with surpluslabor, we try to answer: capital deepening in this period is some certain kind ofnecessity or not. On this base, we make a conclusion of this article and give ourpolicy suggestions in chapter 8. |
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