ABSTRACT
Technological change whether from improved equipment, better methods of cultivation, or new crops and new seeds, was of much less significance and accounted for only a small share of the growth of output. This chapter suggests that the average capital output ratio in China was 2/1 and that the rate of return on capital was 10 per cent. An assumption of constant per capita output, then the higher the share of labor in total product, the smaller will be the contribution of technological change. The different possible assumptions about the rate of growth in output and capital, there are a large number of alternative estimates of the contribution of technological change to the increase in grain output. Technical progress may have been more rapid but not as significant as a 20 per cent rise in per capita output would imply.
