Whether Labor Interregional Flow Hindered The Space Of Industry Transfer

In recent years, with the widening gap between the eastern and the western original economy and the changing pattern of comparative advantage between the east and west in China, central and local government put forward policies to speed up the industrial transfer that is the main and direct method to balance the eastern and the western original economy at present. However, the transfer of industry didn’t emerge on a large scale. Some scholars in China believe that it may be caused by the labor transfer, because the labor transfer causes the comparative advantage of labor in the east still exist and it is to some extent alternative to the industrial transfer of labor-intensive industries in the more developed eastern region. According to these scholars, if the labor force transfer slows down, the industrial transfer should speed up. But it is in fact not consistent with the economic reality that the labor force transfer slows down but the industrial transfer is still slow at present. This paper believes that the influence of labor transfer on the industrial transfer is just a stage of economic development and slow industrial transfer is caused by the different trade pattern between the east and the west. The trade pattern is characterized by the follows:high foreign trade dependence in eastern region, processing trade as the main way of export and more export firms being foreign-owned enterprise, which will increase the transaction cost and transport cost of industrial transfer and slows down the industrial transfer. And so, to speed up the industrial transfer, it is very important and necessary to expand the domestic demand and change the east-west structure of trade.