Industrialization,Urbanization and Income Growth of Rural Residents in China:Based on the Empirical Study Co-integration Theory

Based on the foundation of co-integration, this article applies Vector Error Correction Model and Granger Causality tests to analyse the dynamic relations among income growth of rural residents and development of industrialization and development of urbanization. The result shows that the development of industrialization and development of urbanization are the important factors to affect income growth of rural residents in both short run and long run.The influence from industrialization is more remarkable and permanent than from urbanization.Therefore, industrialization is an important driving force for income growth of rural residents.The promoting of urbanization should be coordinated with development of industrialization. In general, development of industrialization is more imperative than urbanization in our country at present.