Relationship Analysis between Investment and Industrial Structure

Since China followed the policy of reform and opening, investment has been used to stimulate economic development excessively. And the irrational investment structure has led to the imbalance of industrial structure. As a result, there is overcapacity of low-level industry and effective supply shortage of high-quality products and services in China's supply side. In order to achieve sustained, efficient, high-speed growth, the core task of China's structural adjustment at the present stage is to promote supply-side reform. Under the background of supply-side reform, the reasonable and effective investment should be made around the five economic tasks of the implementation to capacity, to inventory, to leverage, and reducing costs and making up short board. The supply and demand effect of investment should be brought into full play in economic growth. Therefore, the purpose of optimizing the industrial structure can be achieved. In the face of new normal, new situation and new requirements, based on the data of 1991 to 2014, this paper applies co-integration test, Granger causality test and VAR model analysis to analyze the relationship between investment and industrial structure, and provides appropriate recommendations for the direction of industrial optimization and the policy choice of supply-side reform.