China Meets Global De-Industrialization: Industrial Structural Transformation of China

Akira Kohsaka
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Akira Kohsaka: Osaka School of International Public Policy, The University of Osaka

No 26E002, OSIPP Discussion Paper from Osaka School of International Public Policy, Osaka University

Abstract: This paper examines China's industrial structural transformation over the past several decades, comparing it with Japan, Korea and the US. Using expanded sets of international comparable databases, we decompose aggregate productivity growth into sectoral productivity growth and inter- sector resource reallocation. Our findings reveal notable trend changes in labor shares across sectors with significant time differences, earlier de-industrialization in the US and latest industrialization in China. Notably, in the US, manufacturing has lagged behind trade, finance and business services in labor share, and ICT in productivity for years. In contrast, in China, while these service sectors remain minimal in labor share, their relative productivities surpass those of manufacturing. Despite her remarkable productivity growth, significant gaps persist in all sectoral productivity levels between China and the others. We explore how fast these gaps could be narrowed by current sectoral productivity growth trends.

Keywords: structural transformation; productivity growth; reallocation; growth decomposition; China (search for similar items in EconPapers)
JEL-codes: O47 O57 (search for similar items in EconPapers)
Pages: 62pages
Date: 2026-03
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