Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/145230
Authors: 
Brandt, Loren
Ma, Debin
Rawski, Thomas
Year of Publication: 
2016
Series/Report no.: 
IZA Discussion Papers 10096
Abstract: 
We see industrialization in China the last 150 years as an ongoing process through which firms acquired and deepened manufacturing capabilities. Two factors have been consistently important to this process: openness to the international economy and domestic market liberalization. Openness and market liberalization are usually complementary: One without the other can seriously limit benefits. For a latecomer like China, modern industry initially finds its most success in more labor-intensive products that require only modest capabilities. Gradual upgrading entails the shift into more skilled-labor and capital-intensive products and processes. China's experience shows that government can both support and obstruct this process. Our review of long-term data shows that i) China's industrial growth rate has consistently exceeded that of Japan, India and Russia/USSR not just in recent decades but throughout most of the 20th century; ii) China's shift from textiles and other light industry toward defense-related industries began before rather than after 1949, as did the geographic spread of industry beyond the initial centers in the Lower Yangzi and the Northeast (formerly Manchuria) regions; iii) the state sector has consistently been a brake on industrial upgrading, highlighting the significance of current reform initiatives in determining China's future industrial path.
Subjects: 
China
industrial development
structural change
JEL: 
O
N
Document Type: 
Working Paper

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