LAUSR

This paper provides an analysis of productivity growth and structural change of the Chinese economy for the period 1995–2009 based on the Subsystems approach. The approach allows a disaggregated analysis without losing sight of sectoral inter-dependences. We observe, in a clearer way, the transition in China from the development phase based on agriculture and ‘light’ industry to the phase based on ‘heavy’ industry and technology-intensive industry and services. We find that best performing subsystems where targeted by industrial policy for promotion. Although there is not a clear pattern, the main source of productivity growth across subsystems was direct labor savings.