Analysis Of Dynamic Efficiency In China's Economy

The Chinese economy has maintained a rapid growth since the reform and opening up to the outside world, and meanwhile achieved a remarkable success. However, the investment plays an essential role in the course of rapid economy development, but domestic consumption is not satisfactory, which makes us to think about the relationship between accumulation and consumption, and this relationship means the study on the level of capital accumulation virtually, and the study of dynamic efficiency is to judge whether capital accumulation in the real economy is exorbitant.While the economic dynamics is invalid,which indicates the excessive capital accumulation, while effective, which shows the lack or equilibrium of capital accumulation.This study intends to test dynamic efficiency of Chinese economy on the base of the theory of dynamic efficiency model referred in the western macroeconomic theory by the use of AMSZ rule.However, when taken the Chinese actual situation into consideration, this study will plus the corporate subsidies instead of minus in terms of calculating the total capital gains by application of this rule.After the test on dynamic efficiency of Chinese economy from year 1994 to 2007, the result shows that the Chinese economy as a whole is in a dynamically efficient state, however, we find that the economy in west region and primary industry are dynamically inefficient.This conclusion is basically accordance with China's actual situation——regional development imbalances and irrational industrial structure. Finally, this study offers meaningful policy proposals based on the analysis on the obtained test results.