Changes in the Structure of the Economy
Economic development has two major components: growth of national output and changes in the structure of the economy. This chapter focuses on changes in the structure of the economy. It explores China’s progress in sectoral structure, relationships between investment and consumption, industrial structure, and geographic distribution of production facilities and describes the impact of the structural changes on economic growth. The most distinctive feature of modern economic development is the shift of product and labor force from agriculture into manufacturing. A significant rise in the proportion of gross national product devoted to capital formation is a prerequisite for modern economic development. The Chinese economy could never be independent in the general sense if industry developed on the old pattern. When the Communists came to power in 1949, the Chinese economy was a dualistic one, comprising a relatively modern sector along the coastal areas and a traditional sector in the vast interior region.