Influence Of Urbanization Of China's Industrial Structure Change

The urbanization, which is now on the accelerating stage, is significant to expanddomestic demand and promote economic development of our country. The support ofindustry is essential to the urban development, and industrial structure has a greatinfluence on the speed and quality of urbanization. This paper tries to analyze the effectof industrial structure on urbanization.Firstly, the related theories of urbanization are introduced, followed by the analysison the mechanism about how industrial structure affects urbanization. Then theadjustment of industrial structure is classified into rationalization and supererogation,from which the mechanism is illustrated in detail.Secondly, based on the panel data of28provinces from year2000to2012, this paperexamines the role of rationalization and supererogation in the urbanization process. Thenconsidering the regional differences in urbanization stage, a quantile regression for paneldata is used to analyze the change of the influence coefficients at different quantiles indetail. Results of the empirical analysis are concluded as follows:(1) Rationalization has a negative influence on urbanization, which means that therationalization of industrial structure plays a significant role in promoting thedevelopment of urban. With the increase of urbanization rate, the beneficial effect ofrationalization tends to be increasing.(2) The difference of index measuring supererogation leads to the disparity of theresult. More specifically, the proportion of non-agriculture shows a positive effect whilethe economic service-oriented tendency shows a negative effect. This difference can beexplained by the fact that the second industry is still playing a leading role in economicdevelopment and the potential of the third industry hasn’t been totally developed. Withthe increase of urbanization rate, the relationship between industrial structuresupererogation and urbanization is found to be a W-shape curve.(3) Among controlled variables, GDP per capita and FDI are helpful to the promotionof urbanization. However, the increase of government fiscal expenditure is proved notvalid to promote urbanization. With the increase of urbanization rate, the promotion effectof economic development grows gradually while the beneficial effect of FDI shows a bigdecrease. Finally, some suggestions are given on urbanization and the adjustment of industrialstructure.