School of Economics and Finance

No. 754: Structural Change in Industrial Output: China 1995-2010

Jose-Miguel Albala-Bertrand , Queen Mary University of London

September 28, 2015

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The aim of this paper is to learn about some patterns of sectoral and industrial structural change of the Chinese economy over the 1995-2010 period. To such a purpose, we set up a quantitative methodology via input-output modelling, which allows us to decompose gross output into some key demand sources or contributions. It can be shown that the trajectory of the main structural patterns over the period were both not smooth and pretty unbalanced and that they generally responded to both domestic policy and international shocks. Export demand and heavy industry appeared to be the main engines of the economy, which showed massive increases in their share of output, at the expense of domestic demand, services and agriculture. Despite the high growth rates over this period, the Chinese economy seemed to be in need of rebalancing. There is however some indication towards the end of our period that the economy was starting to go that way.

J.E.L classification codes: L16, O4, B4, E2

Keywords:China, Industrial structural change, Input-output decomposition, Trajectories over 1995-2010