2011年-世界发展银行全球_Growth_in_China_1978-2008___Factor_Accumulation_Factor_Reallocation_and_Improvements_in_Productivity_38页_2mb

Summary of "GROWTH IN CHINA 1978-2008: FACTOR ACCUMULATION, FACTOR REALLOCATION, AND IMPROVEMENTS IN PRODUCTIVITY"

Core Content

This paper provides a detailed growth accounting analysis of China's economic performance from 1978 to 2008, decomposing growth into three key components:

1. Factor Accumulation: Growth from the addition of labor and capital.
2. Factor Reallocation: Growth from the movement of labor and capital between sectors and ownership types.
3. Total Factor Productivity (TFP): Growth from improvements in efficiency and technological progress.

The goal is to understand the relative contributions of these factors to China's growth and assess future potential.

Main Viewpoints

• TFP Growth: TFP growth was estimated at 2.1% over the entire period (1978-2008), but it declined sharply in recent years, from 2.9% (1979-1995) to 1.0% (1996-2008). This suggests diminishing returns to TFP gains.
• Factor Reallocation: Factor reallocation (both labor and capital) contributed significantly to growth, with an average of 0.8 percentage points per year for each. The contribution of capital reallocation increased notably in the later years, averaging 1.3 percentage points of growth, compared to 0.4 percentage points in the earlier period.
• Factor Accumulation: Factor accumulation accounted for the largest share of growth, contributing 6.1 percentage points annually on average.
• Sectoral and Ownership Shifts: There was a major shift in the composition of employment and capital across sectors and ownership forms. The state sector's share of value added declined from nearly 80% to 30% in industry and 20% in services, while non-state and non-collective ownership gained prominence.
• TFP Contribution to Growth: Over the period 1979-2008, TFP growth contributed 1.5 percentage points to annual GDP growth, which averaged 9.8%. This places TFP growth at the lower end of estimates for China, but still respectable in international comparison.

Key Information

Data and Assumptions

• GDP and Value Added: GDP is calculated at 2000 prices, with a notable decline in the primary sector and a relatively flat share of services. Data on industrial value added by ownership starts in 1981, with earlier estimates based on gross output value of industry (GOVI).
• Employment: Employment data are scaled up to account for census revisions and off-farm migration. The share of agricultural employment dropped from 70% in 1978 to below 40% in 2008.
• Capital Stock: Capital stock is estimated using a perpetual inventory method, with an assumed 7% annual depreciation. Initial capital stock in 1978 is based on the five-year average of GFCF shares. Capital reallocation is particularly important due to concerns about financial market distortions in China.

Methodology

• A production function model is used to decompose growth into three components: factor accumulation, factor reallocation across sectors, and factor reallocation across ownership forms.

• The formula for GDP growth is:

  $$
  g_Y = \alpha g_K + (1 - \alpha) g_L + \text{reallocation terms} + g_A
  $$

  where $g_Y$ is GDP growth, $g_K$ and $g_L$ are growth rates of capital and labor, $g_A$ is TFP growth, and $\alpha$ is the capital share.

• The model allows for a detailed breakdown of how capital and labor moved between sectors and ownership types, and how this affected overall productivity.

Results

• Aggregate TFP Growth: 1.5% annually over 1979-2008, lower than some previous estimates but still relatively high compared to other countries.
• Capital Reallocation: Contributed 1.4% annually, with a notable increase in the more recent period (1996-2008).
• Labor Reallocation: Contributed 0.8% annually, with a consistent but smaller impact compared to capital.
• Sectoral Shifts: The reallocation of labor from agriculture to industry and services was a major driver of growth, with capital shifting from agriculture to services and then back to industry in recent years.
• Ownership Shifts: The decline in state ownership and rise in non-state, non-collective ownership led to positive reallocation effects. However, recent trends show a narrowing of the productivity gap between ownership types, suggesting limited future potential for reallocation gains.

Implications

• Future Growth Potential: The paper suggests that there is still substantial potential for growth through factor reallocation, especially in the agriculture sector, where capital and labor shares have not yet reached equilibrium.
• Policy Relevance: The findings highlight the importance of capital reallocation and the role of financial market distortions in misallocating resources. This has strong implications for China's future economic policy.
• Comparative Analysis: TFP growth in China is lower than some earlier estimates, but still above the global average, indicating that while growth has been driven by accumulation, the role of reallocation is increasingly important.

Key Contributions

• The paper expands on previous growth accounting studies by including capital reallocation in addition to labor reallocation.
• It provides sectoral and ownership-level insights into the sources of growth, offering a more nuanced understanding of China's economic development.
• It highlights ongoing productivity disparities between sectors and ownership types, suggesting that these disparities still offer potential for growth.

Summary Table

Conclusion

The paper emphasizes that while TFP growth has been important, it has not been the dominant factor in China's growth over the past three decades. Factor reallocation, especially of capital, has played a growing role, and this trend is likely to continue. However, the diminishing returns to TFP and the narrowing of productivity gaps between ownership types and sectors suggest that future growth may be more reliant on factor accumulation. The study provides a robust framework for understanding China's economic evolution and offers valuable insights for future policy and research.