Sources of Structural Change and Output Growth of China's Economy: 1987-92

This paper examines the sources of structural changes in output growth of China’s economy over 1987–92 using a decomposition method within the input-output (IO) framework. The model uses three comparable IO tables of 1987, 1990, and 1992 as the main data sources; it accounts for output changes from a demand side perspective and decomposes the growth of output into consumption demand, investment demand, export, import, and intermediate use (indicated by changes in IO coefficients). Special attention is given to identifying the effects of government policies on economic growth and structural change. It is found that overall output growth was multi-components driven rather than single-factor led; the share of the contribution to output growth from consumption and investment expansion declined and that from export and import increased. Whilst the efficiency of factor utilisation remains an issue of further research, a remarkable rise in IO coefficient share indicates a deepening and strong interdependence between industrial sectors over the data period. This revised version was published online in July 2006 with corrections to the Cover Date.