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

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  • Lo, Chu-Ping

    (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.

Suggested Citation

  • Lo, Chu-Ping, 2016. "Openness and Urbanization: The Case of the People’s Republic of China," ADBI Working Papers 561, Asian Development Bank Institute.
    • Handle: RePEc:ris:adbiwp:0561
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    More about this item

    Keywords

    urbanization; structural transformation; industrial productivity growth; People’s Republic of China;
    All these keywords.

    JEL classification:

    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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