China Central Area's Economic Growth Mechanism Analysis/ANALYSE DE LA VOIE DE CROISSANCE ECONOMIQUE DE LA REGION CENTRALE DE CHINE

By Ying, Liu; Yang, Wang | Canadian Social Science, January 1, 2007 | Go to article overview

China Central Area's Economic Growth Mechanism Analysis/ANALYSE DE LA VOIE DE CROISSANCE ECONOMIQUE DE LA REGION CENTRALE DE CHINE


Ying, Liu, Yang, Wang, Canadian Social Science


Abstract:

Through the regression analysis of the related data collected from 1991 to 2005 in China different economic areas, this paper has indicated the China central area's economic growth mechanism. The result shows that consumption demand is the dominating factor driving the central area's economic growth, while the investment demand and the exporting oriented economy have relatively little effects.

Key words: central area's economic growth, consumption demand , investment demand, exporting oriented economy

Résumé: A travers l'analyse des données recueillies de 1991 à 2005 dans de différents domaines économiques de la Chine, cet article indique la voie de croissance économique de la région centrale chinoise. Le résultat montre que la demande de consommation est un facteur dominant qui pousse la croissance économique tandis que la demande d'investissement et l'économie d'exportation exercent des effets relativement petits.

Mots-Clés: croissance économique de la région centrale, demande de consommation, demande d'investissement, économie d'exportation

1. INTRODUCTION

According to the related economic theories, the economic growth of one area is mainly influenced by following factors: consumption effects, investments situation and the net export volume. In the formula calculating the GDP on the basis of measuring the expenditure, the GDP is measured by these factors, namely, consumption expenditure - investment expenditure and me net exporting volume. Which factor dominates the economic growth of central China? Through the regression analysis of the related data collected from 1991 to 2005, we get some meaningful results showing the real element affecting the economic growth in central China - Yangzi River delta and me Zhu River Delta. The author adopts me EViews 5.0 software as the main analyzing instrument. The result shows that consumption demand is me dominating factor driving the central area's economic growth, while the investment demand and me exporting oriented economy have relatively little effects.

In the table 1, we generate the conclusion that during the period between 1991 and 2005, consumption was responsible for 61 .3% of the economic growth in central area, another 37.2% was originated from investment, and 1.1% was resulted from net exporting; in the Yangzi River Delta, the corresponding proportions were 49.4% - 44.2% - 6.2%; For Zhu River, the results were 50.1% - 44.5% - 6.3% respectively. Compared with the Yangzi River Delta and me Zhu River Delta, the consumption effects is obviously playing a larger role in the economic growth in central area, exceeding me former two deltas by 10%. Nevertheless, the contribution of investment and net exporting volume are evidently insignificant.

2. THE TREND ANALYSIS OF CONSUMPTION GROWTH'S EFFECTS ON THE ECONOMIC GROWTH IN CENTRAL AREA

According to the data in table2, the growth rate of consumption in central area was relatively higher than the rest regions around the China before 1997, then the rate began to slow down afterward. However, the consumption rates have been climbing gradually year after year in Beijing centered economic area, Yangzi river delta, Zhu river area and Shandong peninsula. Regardless of the data in 2005, the consumption growth rate in central area has always been lower than the Beijing centered economic area and Yangzi river delta, and lower than Zhu river area and Shandong peninsula more often than not. The year 2005 is a turning point to some extent. The consumption growth rate began to slump, the consumption level in China was stagnated on the whole. Whereas the economic growth was largely driven by consumption, the slump resulted in the clearly weak driven force. The growing rate of GDP in the period witnessed the trend demonstrated by conclusions above.

3. INVESTMENT IN CENTRAL AREA HAS GREAT POTENTIAL TO DRIVE THE ECONOMIC GROWTH

Investment rate refers to the proportion of fixed capital in GDP which is calculated in expenditure measuring method. …

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China Central Area's Economic Growth Mechanism Analysis/ANALYSE DE LA VOIE DE CROISSANCE ECONOMIQUE DE LA REGION CENTRALE DE CHINE
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