chapter  4
The role of productivity
Pages 15

The contribution of productivity to economic growth in China has been of

particular concern since the publication of an article on the East Asian newly

industrialised countries (NICs) by Krugman (1994). He quoted work by Young

(1994a, 1994b) and Kim and Lau (1994) to argue that rapid growth in the East

Asian NICs has been driven mainly by massive injection of factor inputs rather

than innovation and that growth in these countries would not be sustainable. As

China’s growth is likened to the East Asian NICs, can the same argument be

made about the Chinese economy? The aim of this chapter is to examine the role

of productivity in China’s economic growth in the past two decades.