Stages Of Economic Growth In Fixed Asset Investment Law

From 2003 to 2007, GDP grew by average 10.6%, and the fixed asset investment (FAI)grew by average 25.8%, and the FAI rate was average 46.5% in China. By any standard, Chinese FAI grew too fast. Such high FAI rate and FAI growth rate were unusual in the world.In the history, Chinese FAI rate was very high since the Reform and Opening-up, especially since 1993, and it was one of the highest in the world. In 2007, it reached astonishing 55.6%. We can learn many experiences from other countries. From 1995 to 2003, the FAI rate of America, as a typical developed country, was from 17% to 19%, and stable. At the same time, the FAI rate of South Korea, as a new developed country, was going down.As we all know, today's investment will become tomorrow's productivity. FAI is very important factor which supports economic growth. Why is Chinese FAI rate so high? How long does this economic phenomenal maintains? Why has American FAI rate been maintaining from 17% to 19% for long time? Why is FAI rate of South Korea going down? Did the other countries experience such economic phenomenal? In order to keep Chinese economy to grow with high quality and high speed, we need such a study on the law of the FAI development, which is very important in theory and in practice.From the point of the relationship between FAI and the stage of economic growth and by using theoretic and empirical method, this dissertation tries to study the correlation between FAI and the stage of economic growth of China; and analyze whether Chinese FAI grows unusually quickly; and discuss whether Chinese FAI rate is too high; and establish a reasonable rang for Chinese FAI rate; and provide China for some valuable suggestion which is anticipated to do good to Chinese economy.This dissertation includes four parts, and is separated to six chapters. The first part (introduction, the first chapter) introduces what the issue is, the background of the study, the way of thinking in this dissertation and the structure of the study. The dissertation is involved in two different literatures of economics: the first is related to the theories on the stages of the economic growth; the second is the literatures on FAI. For the first category of literatures, this dissertation summarized W·W·Rostow's theory, H·B·Chenery's theory, Ernst·Engel's theory, etc.. Based on them, this dissertation analyzed the current stage of Chinese economy. For the second category of literatures, this dissertation summarized the Classic Economics, Karl·Marks's theory, the New Classic Economics, the Development Economics, etc.. They are involved in FAI, but they could not explain the high FAI rate in China.The second part (the second chapter),the core of this dissertation, advanced the hypothesis and the proof . To explain current phenomenal of FAI in China, this dissertation constructed a hypothesis:"The Exploding Effect of the Luxuries Becoming the Necessaries in the Transition of Consumption". What is the relationship between the law of FAI and Rostow's theory? The hypothesis in this dissertation holds: at the stage of the traditional society, the FAI rate will maintain a low level(about 10%), and is quite stale; at the stage of the preconditions for take-off, the FAI rate will rise from a low level(about 10%) to a high one(about 35%), and the duration of this stage is regular; at the stage of the take-off, the FAI rate will maintain a quite high level(about 35%), and the duration of this stage is regular; at the stage of the drive to maturity, the FAI rate will go down from a quite high leve(labout 35%) to a certain leve(labout 20%), and the duration of this stage is regular; at the stage of the age of high mass-consumption, the FAI rate will maintain a certain level(about 20%), and with the development of science and technology, it will fluctuate around 20%. By using the theory of Maslow's theory――"the Hierarchy of Needs"and"the Mode of the Elasticity of Demand of Industry and the Order of the Upgrading of Industry", this dissertation proved the hypothesis.The third part (the third chapter and the fourth chapter) is empirical. By using Japanese related data and the related data of South Korea, it proved the hypothesis. This dissertation thinks: first, at the stage of the traditional society, the FAI rate will fluctuate around a low level (below 10%); second, from the stage of the preconditions for take-off to the stage of the take-off, the duration of the FAI rate rising from a low level (about 10%) to a high one (about 35%)is about 15-20 years; third, from the stage of the take-off to the stage of the drive to maturity, the duration of the FAI rate maintaining a quite high level (about 35%)is about 30 years; from the stage of the drive to maturity to the age of high mass-consumption, the duration of the FAI rate going down from a quite high level (about 35%)to a certain level (about 20%)is about 15 years, and different country experienced different duration.In the fourth part (the fifth chapter and the sixth chapter), the hypothesis is proved by the related data of China, and some useful suggestion is supplied. According to the hypothesis and the experiences from Japan and South Korea, it discussed the situation of FAI and the related data in China, and some useful suggestion is supplied. The dissertation thinks: China is at the mid-stage of industrialization, or at the stage from the take-off to the drive to maturity in Rostow's theory. At this stage, the reasonable range of FAI rate is from 35% to 45% in China; but current FAI rate of China surpassed greatly the range. So the investment is unusually hot in China. At last, this dissertation gave some useful suggestion which may be helpful to control the situation of investment in China.In this dissertation, the innovation points may include as follows:First, this dissertation summarized the literatures which are involved in FAI, and rated their abilities of explanation to the current FAI situation of China.Second, based on theories related to the stages of economic growth and from the point of the economic history and empirical research, this dissertation constructed a hypothesis――"The Exploding Effect of the Luxuries Becoming the Necessaries in the Transition of Consumption", and it explained the current FAI situation of China.Third, in order to prove the hypothesis, this dissertation established"the Mode of the Elasticity of Demand of Industry and the Order of the Upgrading of Industry".Fourth, this dissertation suggested a reasonable range of FAI rate, and advanced some useful suggestion which is helpful to control the hot FAI situation for China.