Structural Change and Economic Growth in China

18 Pages Posted: 15 Oct 2003

See all articles by Shenggen Fan

Shenggen Fan

International Food Policy Research Institute (IFPRI)

Xiaobo Zhang

International Food Policy Research Institute (IFPRI)

Sherman Robinson

International Food Policy Research Institute (IFPRI)

Abstract

This study develops a new analytical framework to account for sources of rapid economic growth in China. The traditional Solow approach is expanded to include another source of economic growth - structural change. The empirical results show that structural change has contributed to growth significantly by reallocating resources from low-productivity sectors to high-productivity sectors. It is found that the returns to capital investment in both agricultural production and rural enterprises are much higher than those in urban sectors, indicating underinvestment in rural areas. On the other hand, labor productivity in the agricultural sector remains low, a result of the still large surpluses of labor in the sector. Therefore, further development of rural enterprises and an increase in labor flow among sectors and across regions are key to improvements in overall economic efficiency.

Suggested Citation

Fan, Shenggen and Zhang, Xiaobo and Robinson, Sherman, Structural Change and Economic Growth in China. Available at SSRN: https://ssrn.com/abstract=426155

Shenggen Fan (Contact Author)

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

Xiaobo Zhang

International Food Policy Research Institute (IFPRI) ( email )

2033 K Street, NW
Washington, DC 20006
United States
202-862-5677 (Phone)
202-467-4439 (Fax)

Sherman Robinson

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

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