The Analysis Of The Relationships Of China's Governmental And Non-governmental Investments With National Economic Growth

As the first important factor of economic growth, investment as well as consumption and net export is considered as engine in one nation's economic development.Since 1996,when it has achieved "soft-landing" gently, Chinese national economy has been growing very well in general. Investment has been the first impetus of nation's GDP. We have developed a model which we pay more attention to investment,to accumulation and ignoring consumption in a long time, resuting in over-supplied commodities, repeating construction, the big gap between poor and rich, and lack of stamina in development. However, the role of investment in the economy cann't be placed by consumption. Enlargeing consumption doesn't mean giving investment up. If we can control proper investment scale and investment structure, can investment promot economy developing to the fullest extent possible.Domestic investment in accordance with it's subject, can be divided into government investment and non-government investment, which is rather important to government in deciding macro-economic policies, optimize investment structure and encourage private capital. Through empirical analyses of investment and economic growth, this thesis proves that enlargeing investment can boost economic growth and reveal the imbalance in the ratio of investment and irrational investment structure. By collecting historical annual data, using econometric research methods to build VAR model, this thesis's purpose is to study the relationship between GDP, the government investment and the non-government investment. Studies have shown that there is a long-term stable relationship among the three variables and the two kinds of investment have a great effect on economic growth. However, due to government investment problem itself, partly offset the stimulating effect. So the private investment has more effect on economic growth than government investment.In the case of today's financial crisis, how effect the government's 4 trillion investment on boosting the non-government investment? In this paper, adopting the latest monthly data from 2006 to 2009, establishing econometric models, shows that it is obvious government investment spur the economic growth. But in the long run, the way of relying on fiscal deficits and issuing treasury bonds will have a negative impact on economic growth. In order to maintain stable and rapid economic development and improving people's living standard, the most important thing is to vigorously develop the private economy and open the private capital..Contrast to the two models above, we found that promoting coefficients of government investment are different in the two models. In the financial crisis, the government investment stimulating has more effect on the economy than in usual. This shows that government expanding investmental scale for coping with crisis has important role in preventing economic recession and promoting economic growth. For the above analysis, we have proposed policy proposals on the regulations of government investment and how to encourage non-government investment.