Openness and Urbanization: The Case of the People’s Republic of China

Chu-Ping Lo
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Chu-Ping Lo: Asian Development Bank Institute

No 561, ADBI Working Papers from Asian Development Bank Institute

Abstract: Urbanization usually occurs with structural transformation driven by a “push” from agricultural productivity growth and a “pull” from industrial productivity growth, and usually the former exceeds the latter. This paper presents a simple model to illustrate how the open policy in the People’s Republic of China (PRC) since 1979 reversed the pattern such that the “pull” effect dominated the “push” effect during the PRC’s structural transformation and urbanization. This model helps explain why the PRC, whose industrial productivity growth exceeds its agricultural productivity growth, has experienced a standard pattern of structural transformation. The paper also demonstrates how a developing country’s business services intensity increases with its urbanization.

Keywords: urbanization; structural transformation; industrial productivity growth; People’s Republic of China (search for similar items in EconPapers)
JEL-codes: L16 O14 O40 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2016-03-27
New Economics Papers: this item is included in nep-cna and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:ris:adbiwp:0561

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