Media Briefings


  • Published Date: April 2014

China’s extraordinary economic growth in recent decades has been driven more by technological progress than by increases in efficiency (measured by growth of total factor productivity, TFP). That is the central finding of research byJianhua Zhang, Chunxia Jiang and Peng Wang, to be presented at the Royal Economic Society’s 2014 annual conference.


Their study looks at data for the period 1997-2012 to determine the key driving forces behind China’s economic growth, which has grown at around 10% per year for more than three decades. They find that only 16% of the growth is down to improvements in efficiency, with the majority coming from other factors such as the adoption of new technology. According to the report:


·        TFP growth accounts for only 16% of economic growth, whereas technological progress accounts for 32%, of which half is wiped out by inefficiencies with a share of -16%.


·        TFP growth varies significantly across the country. The least developed central and western regions have a TFP growth rate of 2.14% and are about three times more productive than the most developed municipalities at a rate of 0.78%.


·        TFP growth is positively influenced by human capital, innovations and imports of machinery.


·        TFP growth is negatively affected by financial development and exports. Foreign direct investment (FDI), infrastructure and the level of market competition do not seem to have much of an impact on TFP growth.


The authors comment:


‘The experience of developed economies suggests that TFP growth is the key driver of sustainable growth in the long term.


‘China’s GDP growth is largely driven by input factor accumulation with withering contribution from TFP from 30-58% in the early reform period reported by existing studies, to 16% in the recent decade.’





Notes for editors:


‘Total Factor Productivity and China's Miraculous Growth: An Empirical Analysis’ by Jianhua Zhang, Chunxia Jiang and Peng Wang


For further information, contact:


Dr Chunxia Jiang,

Romesh Vaitilingam:, +44 7768 661095