ABSTRACT
This chapter focuses on the changes in the structure of the Chinese economy since 1978 in particular, when pro-market economic reforms first began that led to the transformation from a centrally planned to a pro-market economy. The first two sections provide a macroeconomic accounting framework of the growth experience since 1950. Economic growth is explained in terms of both aggregated technological progress and factor accumulation, while labor productivity is decomposed in intra-industry growth and structural change. Next, the analysis shows how the Chinese economy is organized (into SOEs and private companies), as well as the types of sectors that are responsible for the main employment and production activities. Among the top priorities of the economic reforms has been the process of integration into the world economy, which has pushed China to the core of international trade. The sectors and products that are relatively strong internationally (with revealed comparative advantages). The last sector to be reviewed is the banking system, which has been lagging in terms of economic liberalization. This sector provides further opportunities for market reforms that would ease the financial constraints on private firms, small and medium-sized enterprises in particular.
