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Measuring Productivity Performance by Industry in China, 1980-2005

Author

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  • Harry X. Wu

Abstract

Using the author’s recently constructed data set, this article measures the productivity performance of China’s 19 manufacturing industries, four mining industries, plus utilities, over the reform period 1980-2005. The approach is based on neoclassical assumptions on institutional settings and behavior of agents. Some of these assumptions are questionable in the case of China, but the results can be used as a starting point for further investigation. We find that the post-reform industrial growth in China had been largely investment-driven and inefficient until the 2000-05 period. Following China’s accession to WTO in 2001, Chinese industry experienced the best performance in TFP, accounting for 50 per cent of the growth of industrial value added. However, the mining sector had been most inefficient and had not yet shown a clear sign of improvement by 2005. Traditional labour intensive manufacturing did not appear to be efficient as suggested by the theory of comparative advantage, but there was a sign of significant improvement in 2000-05. By contrast, the capital and technology-intensive industries engaged in consumer goods manufacturing were most efficient throughout the entire period, apparently due to continuous foreign direct investment, high exposure to international competition and less state intervention.

Suggested Citation

  • Harry X. Wu, 2007. "Measuring Productivity Performance by Industry in China, 1980-2005," International Productivity Monitor, Centre for the Study of Living Standards, vol. 15, pages 55-74, Fall.
    • Handle: RePEc:sls:ipmsls:v:15:y:2007:4
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    References listed on IDEAS

    as
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    4. Mr. Mohsin S. Khan & Zuliu Hu, 1997. "Why is China Growing So Fast?," IMF Economic Issues 8, International Monetary Fund.
    5. Hulten, Charles R. & Wykoff, Frank C., 1981. "The estimation of economic depreciation using vintage asset prices : An application of the Box-Cox power transformation," Journal of Econometrics, Elsevier, vol. 15(3), pages 367-396, April.
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    More about this item

    Keywords

    Productivity in China; National accounts; Growth accounting; Labour productivity; Total factor productivity.;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General

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