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Tertiarization Like China

Author

Listed:
  • Xilu Chen

    (Lingnan College, Sun Yat-sen University, Guangzhou, China)

  • Guangyu Pei

    (Department of Economics, The Chinese University of Hong Kong, Shatin, Hong Kong SAR)

  • Zheng Song

    (Department of Economics, The Chinese University of Hong Kong, Shatin, Hong Kong SAR)

  • Fabrizio Zilibotti

    (Department of Economics, Yale University, New Haven, Connecticut, USA)

Abstract

This article documents a rapid shift toward services (tertiarization) of the Chinese economy since 2005, as evidenced by the significant increase in both employment and value-added shares of the service sector. Notably, our analysis reveals that a variety of measures of productivity growth have been greater in the service sector than in the manufacturing sector. Firm-level measures of dynamism corroborate this ongoing tertiarization trend, which is not limited to services used as inputs to industrial production but extends also to consumer services. These findings are robust across different growth accounting methodologies, including a recently proposed method by Fan et al. (2023) that addresses challenges associated with the measurement of quality improvements in service industries.

Suggested Citation

  • Xilu Chen & Guangyu Pei & Zheng Song & Fabrizio Zilibotti, 2023. "Tertiarization Like China," Annual Review of Economics, Annual Reviews, vol. 15(1), pages 485-512, September.
    • Handle: RePEc:anr:reveco:v:15:y:2023:p:485-512
    DOI: 10.1146/annurev-economics-071122-030026
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    More about this item

    Keywords

    China; growth accounting; nonhomothetic preferences; consumer services; producer services; tertiarization;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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