Zhang Bin, PhD, Senior Fellow, China Finance 40 Forum & Chinese Academy of Social Sciences, Beijing
A version of this article was originally published in the Business Standard as ‘The way forward for the Chinese economy’, 18 March 2017. This is part of a series by Chinese economists facilitated by the ICS.
As part of the cycle of economic development, all advanced economies have undergone industrialization and post-industrialization. Industrialization involved the manufacturing sector’s focus on increasing GDP, employment rate and consumption of manufactured products. For China, the post-industrialization phase implies economic activities will be concentrate in the service industry.
Based on measures of income level, the rate of growth of the manufacturing sector, employment rate and the consumption of manufactured products, China has passed the peak of industrialization. If global experience is a guide, the peak of industrialization happens when per capita GDP ranges between US$8,000 and US$10,000 (PPP based on 1990 value). After reaching the peak of US$10,000, the proportion of the industrial sector indicators continues to decline. By this yardstick, China has passed the peak of industrialization. Continue reading “Structural Transformation in the Chinese Economy: From Manufacturing to Services”