Government Investment, Private Investment And Foreign Investment

Since the reform and opening, China gets rapidly economic growing, and investment is an important driving force for economic growth. From economic theory, this paper puts forward the concept of investment structure, defines investment, and divides it into government investment, private investment and foreign investment, according to different investment subjects. From China's present situation, this paper gives an analysis of the status of Chinese investment, analyses investment scale and economic growth, and according to the current China's situations, makes specific definition and description of government investment, private investment and foreign investment. According to economic growth theory, this paper expands Solow's model to get a theoretical model of investment structure and economic growth, and shows that investment structure affects economic growth, due to different investment efficiency. This paper establishes a multivariate regression model by introducing control variable, the proportion of total investment in GDP, original GDP per capita, population growth rate, illiterate rate, and the proportion of trade in GDP. Analyzing data of 30 provinces in China from 2005 to 2009, it shows that China's government investment proportion negatively relates to economic growth, and private investment and foreign investment proportion positively relates to economic growth. Comparing regression results of 2005-2007 and 2008-2009, it is concluded that the efficiency of government investment and foreign investment increase, and the efficiency of private investment descend after economic crisis. According to theoretical and empirical result, this article explains China's problems in government investment, private investment and foreign investment, and gives the policy suggestion that China should deliberately use government investment, fully playing macro-control role, and encourage high-quality foreign investment, and develop private investment, and pay attention to regional balance of investment.