Social Sciences in China (Chinese Edition)

No.12, 2017

A Study of China’s Industrialization Strategy at the Upper Middle Income Stage

(Abstract)

Huang Qunhui, Huang Yanghua, He Jun et al.

When high-income East Asian economies entered the upper middle income stage, the actual share of manufacturing and total factor productivity maintained longterm growth, in a typical pattern that is highly consistent with the classic theory that sees manufacturing as an engine of economic growth. When China entered the upper middle income stage, the actual share of manufacturing industry and total factor productivity both fell at the same time, exhibiting a theoretical and empirical tendency toward “premature deindustrialization” that increases the risk of being caught in the middle-income trap. Accelerating China’s development as a major manufacturer and enhancing the quality and efficiency of traditional industry are realistic options for the country’s current industrial development strategy.