Study On The Relationship Between The Traffic Infrastructure And The China’s Manufacturing Inventory Level

Since1990, China has accelerated its transport infrastructure construction, but theimprovement of traffic infrastructure construction level has not brought about a generalreduction of logistics costs.As an important part of the logistics costs, how might theinventory cost change? Judging from experience, while traffic infrastructureconstruction levels increase, the transportation costs can be reduced, and the inventorylevel would reduce. But this is contradictory with objective facts. With this question,this paper attempts to analysis more comprehensively of the relationship between theconstruction of transport infrastructure and inventory levels.In theory analysis of the relationship, this paper added economic development intothe model as a new variable, and replaced lead-time with transport efficient anddistances. Through the analysis of new models, effects of transport infrastructure oninventory levels divided into three ways:to improve transport efficiency, to increase thetransport distance and economic level.The three impaction ways impacts each other.And the results depend on how much each ways impact on the others.In empirical analysis, this paper tested the effects with provincial panel data fromindustrial enterprises above designated size in the years from2005to2010. The resultssuggest thatthe inventory level of manufacturing enterprises is really raisedwith theimproving of traffic infrastructure construction level.And the transfer of industry andmarket expansion might to be the reason of the rising of inventory levels.Based on the conclusions, this paper suggests: to invest in varying levels oftransport facilities in the Midwest, while in the eastern region should concentrate withhigh levels of traffic facilities; The government’s guiding industry transfer should bebased on local capacities to undertake, and should promote the transfer of the wholeindustry chain to reduce logistics costs.