Analysis and Policy Suggestion of the Current Industrial Economic Situation

Abstract

In the first three quarters of 2014, the industrial economy of China decreased but experienced positive progress in the adjustment of industrial structure and remarkably improved the industrial economic growth quality. At present, the dynamic mechanism for industrial economic growth is shifting. Seen from demand, investment is still an important engine for industrial growth, but the investment efficiency is dropping rapidly. Seen from supply, the rise in total factor productivity will gradually replace capital formation as the core driving force for the industrial growth. In terms of industry, labor-intensive, capital-intensive, and knowledge-intensive industries have played an irreplaceable role in China’s industrial economic growth, but with certain variations in the mechanism of action and relative position. In making policies, the government should attach more importance to the balance among all the objectives, not only maintaining a rapid growth in the industrial economy and avoiding all shocks brought by an economic plummet, but also focusing on improving the industrial economic growth quality and accelerating transformation and upgrading. Therefore, the government should promulgate policies from different aspects such as demand, supply and industry, and stress both the outcome and the process to promote a healthy and sustainable development of the industrial economy.