Structural Analysis Of Economic Growth In China

The GDP per capita of China has reached the upper middle-income. People are interested in finding the answer to the question "Can China step over the’Middle Income Trap’?" and "Will China realize a sustainable economic growth?" Firstly, The paper refers to a model from Aoki&Masahiko(2011), decomposing the GDP per capita growth into three factors:(1) demographic-economic change in the ratio of total employment to total population;(2) structural transformation;(3) technological progress in the I-sector. Then, we carried out a structural analysis on China’s economic growth and made an international comparison on the economic growth of China, Japan, Korea and Taiwan. The paper argues that structural transformation is the key factor for China’s sustainable economic growth. In order to complete the structural transformation, we must pay attention to the following two aspects. On one hand, the employment share of the A-sector has to be lowered, making more rural surplus labor transfer from the A-sector to the I-sector. On the other, the gap of labor productivity between the A-sector and I-sector should be narrowed. Finally, according to the development experience of other countries, we made a prediction for China’s future economic growth, coming to a conclusion that it is possible for China to reach the high-income level by2030. Meanwhile, the employment share of the A-sector and Dual contrast coefficient will continue to decline.