Empirical Research On The Contribution Of The Factor Inputs To China' Economy

The high growth of Chinese economy gives impetus to the world economy so that Chinese economy becomes the focus. Under this background, this paper researches the continuity of Chinese economy from the real evidence, and the contribution of the factors of production and the total factor productivity to the economy. The empirical analysis bases on the Neoclassical Economical Growth Theory, and uses the C-D model to analyze the economical data from 1978 to 2008. The result tallies with the reality.The empirical results indicate five points:(1) A long-term equilibrium relationship does exist between China's GDP and the factor inputs, such as capital and labor and so on, which means that the inputs increasing of capital and labor would bring up the Chinese economy and the increasing of the economy would bring up the inputs of factors. (2) The flexibility sum of capital and labor inputs is less than 1, no matter from the angle of China's total economy or from the angle of regional economy, which means that both the overall country's economy and the regional economy lack the scale reward. (3) The total factor productivity of China's economy is very low, and the total factor productivity are negative in more than half years from 1978 to 2008, which demonstrates that the factors such as the system, the technology, human capital, contribute a little to the economy. (4) There also is a long-term equilibrium relationship between China's economy and China's finance, which promote and push each other. (5) The research on the regional economy demonstrates that there is a lot difference among the regional economy. No matter GDP or capital inputs or the employment, the Eastern is better than the Middle Area and the Western, and the Middle Area is better than the Western.The finding shows that the continued and healthy development of China's economy needs the reformation of the existing system and the restructure of the economy, and increasing investment in education, and playing full the Contribution of human capital.