In this study, we estimate total factor productivity (TFP) growth as well as multilateral TFP index for 25 contiguous China provinces over the 1985-2007 period. Agricultural output growth for each province was decomposed into TFP growth and input growth, where input growth was further disaggregated into contributions from growth of labor, capital, land, and intermediate goods. Over the study period, TFP growth contributed 2.7 percentage points to output growth annually, which was slightly higher than the input growth contribution of 2.4 percentage points per annum. On average, the annual rate of productivity growth peaked during 1996-2000, at 5.1%. It slowed in 2000-2005 to a rate of 3.2% per annum and declined in the most recent years (2005)(2006)(2007) to −3.7%. Differences in productivity among regions persisted over the entire period. The tendency toward faster TFP growth in relatively well-off coastal regions may imply a widening of regional inequality.
This paper delves into China’s differential growth in exports with high income and developing countries by focusing on bilateral content of China’s trade and particular exports over the time period 1979-2015. In the last 30 plus years, China has specialized in upstream capital goods and exhibited rapid diversification in consumer goods. Performing causality tests reveals a strong evidence of causality from the export growth of capital goods and consumer non-durable goods to gross domestic product (GDP) per capita. There is also evidence that the causality is bi-directional for consumer durable goods, intermediate goods, and primary non-energy goods with income. Econometric analysis shows a positive and statistical significant relationship between income and export growth of capital goods, consumer non-durable goods, intermediate goods, and primary non-energy goods. Trade openness allows stimulation of growth and efficiency as producers in China are exploiting areas in which they have a comparative advantage.
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