Industrial Structural Change and Economic Growth in China, 1987-2008

The present paper studies the sources of economic growth and the nature of structural change in the Chinese economy from 1987 to 2008. Using a methodology that evaluates the contribution of an industry to economic growth, the present paper shows that the post-2000 subperiod marked an increased reliance on the services sector as a source of growth in the Chinese economy. Much of the acceleration in real GDP or aggregate labor productivity growth in China in the post-2000 subperiod compared to the pre-2000 period can be traced to an increased contribution from service-producing and high-technology exporting manufacturing industries. The evidence indicates that the Chinese economy has been rebalancing toward domestic consumption and shifting its export sector toward high-technology manufacturing industries.