Structural change and industrial linkages: a perspective on China’s growth pattern, 1995-2009

ABSTRACT China has presented one of the most noticeable growth experiences in economic history. High growth rates in the post-1978 reform period have been marked by deep structural changes in the Chinese economy. This paper aims to discuss China’s long-term economic growth from a Kaldorian-Structuralist framework that emphasises the importance of a large, diversified and integrated industrial base as a central engine of economic growth that may prevent balance-of-payments constraints. This study applies input-output indicators to reveal key sectoral transformations of the Chinese productive structure and changes in interindustry linkages during the 1990s and 2000s. Results provide evidence that: (i) the Chinese sustained growth pattern has relied on a diversified and increasingly integrated domestic industrial production; and (ii) most sectors have been able to generate through exports enough foreign exchange to pay for import needs.