Analysis On Factors Of Industrial Structure Optimization And Upgrading In China Based On Panel-data Model

Optimization and upgrading of industrial structure, depends on the efficiency of the allocation of economic resources under market mechanisms, and also the efficiency of the industrial policy from the government to make up the lack of market mechanism. China has practiced a progressive market-oriented reform, so the optimization and upgrading of industrial structure totally relying on market mechanism would require a fairly long process. In order to facilitate the leading role of the government in the process of industrial restructuring, it is necessary to figure out the specific factors of optimization and upgrading and their impact mechanism, which form the targeted way for the industrial policy. and introduce exogenous forces into endogenous optimization mechanisms, thereby promoting the change of economic growing mode.This paper has acquired statistics from national and local bureaus of statistics. databases of GUOYAN Web and existing economic documents. It firstly builds a system of indicators to represent the optimization and upgrading of industrial structure, and then assesses the level of industrial structure of 30 provinces objectively, using the mode of factor analysis. Secondly, it analyzes the factors affecting the optimization and upgrading of industrial structure from four points of view:leading industry, technology investment, external openness, and energy efficiency, with the application of Panel-Data model. The paper has made three conclusions as follows:First, technology investment and external openness, represented by R&D input and FDI dependency, have a very significant positive effect to the industrial structure of China, so are potent factors to the optimization and upgrading of industrial structure.Second, leading industry and energy efficiency, represented by proportions of leading industries and electric consumptions of unit industrial output, have no obvious effect, or even a negative one for leading industry to the optimization and upgrading of industrial structure. So they are weak factors. The former is due to a dominant position of low-level industries at the present stage of China; while the latter is restricted in the objective reality of the majority of industries with high-energy consumption.At last the paper has put forward some recommendations about industrial policies according to the results of the empirical analysis.