China's miracle growth : the evolution of the industrial structure and the impacts of growth.

• Main Authors: Hong, Yue Ting., Leong, Vicki Pei Ting., Lim, Sandra Mui Kuen.
• Other Authors: Yao Shuntian
• Format: Final Year Project
• Language: English
• Published: 2009
• Subjects: DRNTU::Social sciences::Economic development::China
• Online Access: http://hdl.handle.net/10356/15148
• Institution: Nanyang Technological University

This paper attempts to explain the industrial distortions of China’s economy during the post-Mao era by looking at the returns to scale through the use of a Cobb-Douglas production function. In general, the industrial distortion has been identified as a secondary dominated one. This paper uses macro level and sectoral data, together with regression analysis to look deeper into these distortions. It is found that for the period of 1978 – 2001, both the secondary and tertiary industry exhibits increasing returns to scale. However, that of the tertiary sector is significantly higher and hence shows potential of sustaining China’s growth. This paper identifies that China has been in fact trying to grow its tertiary industry to improve the industrial structure. It also highlights other aspects of the economy that has been impacted by growth.