Transformation strategy of the three industries in China at the Lewis turning point

Abstract

At the first stage of Lewis, China promoted rapid development of industrialization driven by huge demographic dividend. But under the institutional constraint, the labor force in non-agricultural industries flows back into the countryside constantly. In 2004, China had entered into the Chinese-style Lewis turning point. Under the Chinese-style Lewis turning point, the three industries in China has three characteristics: low efficiency in the primary industry, overcapacity of the second industry, the rapid development of the tertiary industry. In order to improve production efficiency of the primary industry, China should implement effective policies to promote the rural population urbanization, and at the same time encourage urban capital to flow to the countryside. In order to increase the strength that economic development is driven by demand, China should optimize the distribution structure of national income through the government means such as reduction of tax and transfer of profits.