An Empirical Research On The Relationship Between Industrial Structure Transformation And Economic Growth

With the conclusion of the3rd Plenary Session of the18th CPC Central Committee and the Central Economic Working Conference, focus on industrial structure adjustment has been heightened recently. Since China introduced reform and opening policies, it has been the world’s second largest economy. So, for economy, the industrial structure becomes one of the important factors to restricting the sustainable development of economy. The outcome of this event is intended to result in the development of guidance on industrial structure adjustment in Henan province on December10,2013. One of the most important goals of the guidance in Henan province is to lead the China in manufacturing, services, and agriculture. New situation of China’s regional economic development is that industrial transferring from east to west. That taking full advantage of late-development advantage to achieve spanning development of the industrial structure in Henan province is worth pondering on.Taking Henan province as an example, in this paper, there is an empirical study on industrial structure change and economic growth in Henan province from1978to2012with a dynamic economic analysis method based on VAR model, co-integration analysis, vector error correction model, impulse response function and variance decomposition. The empirical analysis concludes that there is a stable equilibrium relation between Henan province’s change in industrial structure and real economic growth in the long run, and there is a reverse revision mechanism in the relation. The Granger causality test shows that adjustment of industrial structure and economic growth have an important effect on each other through production value structure. Although Henan province has a fast growth of the economy, it has the much recessive unemployment in the primary industries, mainly agriculture. The existing problem is the lagging of labor structure adjustment behind economic growth. As a result, among all the policies, energetically readjusting and optimizing industrial structures is key measure to prosper the economy in Henan province. In the end, this paper provides some policy proposals depending on the above analyses.