ABSTRACT
This chapter discusses what happened to China’s production structure and industrial upgrading. China’s rapid growth was achieved through a dramatic structural transformation, which can be observed from changes in the sectoral composition of gross domestic product. The chapter addresses conditions faced by China’s manufacturing industry before China’s economic reform in 1978, and discusses the trends and characteristics of China’s industrialization and manufacturing structural upgrading since its take-off. The structural transformation and industrial upgrading also have significant effects on employment generation and poverty reduction. The chapter examines the main factors, namely, policy setting, accounting for rapid industrial growth, and structural upgrading. It investigates the effect of industrial growth and manufacturing structural change on employment generation, following a careful scrutiny of the relationship between shifts in manufacturing employment and poverty reduction.
