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Structural Change and Economic Growth in China

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  • Shenggen Fan
  • Xiaobo Zhang
  • Sherman Robinson

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. Copyright Blackwell Publishing Ltd 2003.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of Development Economics.

Volume (Year): 7 (2003)
Issue (Month): 3 (08)
Pages: 360-377

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Handle: RePEc:bla:rdevec:v:7:y:2003:i:3:p:360-377

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Cited by:
  1. Chen, Zhuo & Huffman, Wallace & Rozelle, Scott, 2006. "Farm Technology and Technical Efficiency: Evidence from Four Regions in China," Staff General Research Papers 12605, Iowa State University, Department of Economics.
  2. Bloom, David E. & Canning, David & Hu, Linlin & Liu, Yuanli & Mahal, Ajay & Yip, Winnie, 2010. "The contribution of population health and demographic change to economic growth in China and India," Journal of Comparative Economics, Elsevier, vol. 38(1), pages 17-33, March.
  3. Fan, Shenggen & Chan-Kang, Connie, 2005. "Road development, economic growth, and poverty reduction in China:," Research reports 138, International Food Policy Research Institute (IFPRI).
  4. Diao, Xinshen & Hazell, P.B.R. & Resnick, Danielle & Thurlow, James, 2007. "The role of agriculture in development: Implications for Sub-Saharan Africa," Research reports 153, International Food Policy Research Institute (IFPRI).
  5. Mukherjee, Anit & Zhang, Xiaobo, 2005. "Rural non-farm development in China and India," DSGD discussion papers 24, International Food Policy Research Institute (IFPRI).
  6. Zhang, Xiaobo, 2006. "Asymmetric property rights in China's economic growth:," DSGD discussion papers 28, International Food Policy Research Institute (IFPRI).
  7. Yang, Ling & Lahr, Michael L., 2010. "Sources of Chinese labor productivity growth: A structural decomposition analysis, 1987-2005," China Economic Review, Elsevier, vol. 21(4), pages 557-570, December.
  8. Pratt, Alejandro Nin & Fan, Shenggen, 2010. "R&D investment in national and international agricultural research," IFPRI discussion papers 986, International Food Policy Research Institute (IFPRI).
  9. Jia, Xiangping & Fock, Achim, 2007. "Thirty Years of Agricultural Transition in China (1977-2007) and the "New Rural Campaign"," 106th Seminar, October 25-27, 2007, Montpellier, France 7953, European Association of Agricultural Economists.
  10. Zhang, Xiaobo & Tan, Kong-Yam, 2007. "Incremental Reform and Distortions in China’s Product and Factor Markets," MPRA Paper 6804, University Library of Munich, Germany.
  11. Huanxiu GUO & Sébastien Marchand, 2013. "The environmental efficiency of non-certified organic farming in China: a case study of paddy rice production," Working Papers halshs-00763675, HAL.
  12. Cao, Kang Hua & Birchenall, Javier A., 2013. "Agricultural productivity, structural change, and economic growth in post-reform China," Journal of Development Economics, Elsevier, vol. 104(C), pages 165-180.
  13. Fan, Shenggen & Zhang, Xiaobo, 2004. "Infrastructure and regional economic development in rural China," China Economic Review, Elsevier, vol. 15(2), pages 203-214.
  14. Mukherjee, Anit & Zhang, Xiaobo, 2007. "Rural Industrialization in China and India: Role of Policies and Institutions," World Development, Elsevier, vol. 35(10), pages 1621-1634, October.
  15. Chen, Shiyi & Jefferson, Gary H. & Zhang, Jun, 2011. "Structural change, productivity growth and industrial transformation in China," China Economic Review, Elsevier, vol. 22(1), pages 133-150, March.
  16. Ravi Kanbur & Xiaobo Zhang, 2005. "Fifty Years of Regional Inequality in China: a Journey Through Central Planning, Reform, and Openness," Review of Development Economics, Wiley Blackwell, vol. 9(1), pages 87-106, 02.

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