Research On The Dynamic Relationship Of Urbanization, Tertiary Industry And Economic Growth In China

According to the classic economic theory, along with the development of economy, per capita income would increase, labor force would transfer to the tertiary industry. The level of urbanization has become an important index to measure the comprehensive development level of a certain region. The development of the urbanization would influence the tertiary industry development, at the same time would drive a steady economic growth. From the analysis of the western economic theory, and the development experience of developed countries, the analysis focuses on the development situation of China.To study the interaction relationship between urbanization and the tertiary industry and investigate the action mechanism of the urbanization level and the output of the third industry on the economic growth, make the corresponding empirical analysis, according to the time series data from 1984 to 2012, to construct the stability model of VAR, and then use VAR do the Granger causality test, impulse response analysis and variance decomposition test. Combine the empirical test results and theoretical analysis, the study get some conclusions. First, the dynamic relationship between urbanization and the tertiary industry exists, and from the short-term the influence of tertiary industry to promote urbanization is relatively larger, and for the long-term development, increase the output of the third industry has some effect on the improvement of urbanization level, but not very significant. Second, the interaction between urbanization and the tertiary industry level affects the level of economic development. Among various factors at present on the impact of China’s economic growth, urbanization and the third industry are the critical power source. Third, the development situation for tertiary industrial depends on the growth of the economy and urbanization. With the advance of the urbanization process, the optimistic allocation of resources, infrastructure functions, industry agglomeration, technological innovation, and employment rate have been enhanced,and in turn these facts affect the development of the tertiary industry, the tertiary industry can give full play to its absorbing labor function, thus affect the economic growth pace. According to the results of empirical analysis, combined with the framework of theoretical analysis, related to how to promote the development of urbanization and the tertiary industry, some relevant policy recommendations have been put forward, such as promote the urban infrastructure construction, encourage people-oriented population into the mechanism, speed up the adjustment of industrial structure upgrading, coordinated development of urbanization and the tertiary industry, in order to enhance the economic growth in the long-run.