Capital Allocation Efficiency In Chian

According to the economic theory, there are two ways to realize economic grow th, one is to increase total capital by increasing the occupancy and consumption of pr oduction factors; the other is to improve capital allocation efficiency by improving th e allocation and utilization efficiency of production factors. At present, China’s extensive economic growth mode is the mode of economic growth-oriented. However, as the economy expands, if we still rely on the traditional development mode and enlarge the volume of production factors inputs and the scale of production, China’s economic and social development will be increasingly constrained by severe resource and environment.Under the current backdrop of economic resurgence, researching on capital allocation efficiency in different types of enterprises in China and the corresponding influences from the perspective of enterprises, for grasping and using its strength to guide capital flowing to technology-intensive and other competitive and growing industries will have great theoretical and practical significance to the restructure of industries and change of economical development pattern, the realization of healthy and stable increase of economy.Capital allocation means the mobility of capital between regions and sectors through various economic activities. The improvement of capital allocation efficiency will optimize the allocation of production factors and increase utilization efficiency, and promote economic growth. In China, there are different types of capital such as state-owned capital, private capital and foreign capital. This paper, proceeds from the perspective of different capital and on basis of Wurgler’s classic capital allocation efficiency model, analyzed the allocation efficiency of different economic types and their differences from the first quarter of2003to the fourth quarter of2008, calculated and analyzed the capital allocation efficiency of different economic types in different industries. In addition, this paper also analyzed the influence degree to capital allocation efficiency of different economic types in different industries from industrial efficiency, industry size, industry structure, industry operating capacity, industry developing capacity, industry concentration, industry concentration trends, intensity of industrial factors and entry barriers. The research result demonstrated that, in various types of enterprises, foreign capital has the highest allocation efficiency, followed by private sectors and state-owned enterprises came in last. In the recent five years, though the capital allocation efficiency in state-owned sector stayed stable, it remained low. And the capital allocation efficiency in private sectors is fluctuating. Moreover, in different types of enterprises, energy and special equipment manufacturing industry has the least difference in capital allocation efficiency, while the differences in electric power, nonferrous metal and other industries are big. In foreign-funded enterprises, the most efficiently allocated industries are mostly capital-and technology-intensive industries. Besides, according to the analysis of influence factors in the capital allocation efficiency of different types of enterprises, the capital allocation in foreign-funded sectors focus more on industrial benefits, while private sectors pay more attention to industrial development. The capital allocation in state-owned enterprises is related to the intensive factors; therefore they attach more importance to energy industry. Furthermore, the correlation between the capital allocation in state-owned enterprises and industrial structure (asset-liability ratio) is relatively weak.In the light of the above conclusions, we put forward suggestions as follows:(1) To improve the utilization efficiency of the state-owned enterprise capital, we should choose industries with development potential or with potential economic value, when selecting the industries which need to be supported. Simultaneously, fostering their independence and profitability is also needed.(2)To loosen the restrictions on private business, government should supply some tax supports at their primary stage. For small-scale enterprises, in addition to encouraging private business to develop industries with good growth, government should also aid them in technology, management and capital and encourage them to be entrepreneurial as well as big. Moreover, to improve the knowledge structure of the private business, government needs to encourage entrepreneurship and the re-learning in the enterprise’s development. The private enterprises should also be provided with some policies, which are those equal to or more favorable than those offered to foreign companies. (3)Government should guide the foreign companies to invest in the growing industry when they invest in highly profitable industry. As to larger-scale industries, we should strengthen the configuration and management of capital to improve the efficiency of the capital allocation. In addition, foreign-funded companies enjoy high market share in China’s capital-intensive industries, especially in the communications field. So how to prevent the foreign enterprises from controlling the industry in China, depriving Chinese enterprises of economic profit, gaining mastery over China’s economy, has become the future development direction that protect the foreign enterprises, state-owned enterprises and the private enterprises.