Abstract: This paper observes the progress of China's economic restructuring from two perspectives, industry and expenditure, and compares it with high-income economies at a similar stage of development. Chinese economic activity has been shifting from manufacturing to service since 2010–2012. After this peak of industrialization, inputs, production and products displayed a good trend in upgraded manufacturing, human–capital intensive services grew at a faster pace, and consumption, investment and exports were more balanced. The trajectory of these structural changes is consistent with the historical experience of high-income economies, indicating that China is on track towards higher income. The gap is mainly in the lower share of jobs in secondary and tertiary industries. Value-added in government services as a percentage of GDP is relatively low and that of the financial sector is high. Household consumption as a percentage of GDP is relatively low, whereas that of investment is relatively high, especially construction investment. Closing these gaps requires a shift in government focus from development to service so as to increase the rate of urbanization.
Keywords: structural transformation, cross-country comparison
Download the full PDF report with the link below -
