Tertiarization Like China
This article documents a rapid shift toward services (tertiarization) of the Chinese economy since 2005, as evidenced by the significant increase in both employment and value-added shares of the service sector. Notably, our analysis reveals that a variety of measures of productivity growth have been greater in the service sector than in the manufacturing sector. Firm-level measures of dynamism corroborate this ongoing tertiarization trend, which is not limited to services used as inputs to industrial production but also extends to consumer services. These findings are robust across different growth accounting methodologies, including a recently proposed method by Fan et al. (2023) that addresses challenges associated with the measurement of quality improvements in service industries.
Published Versions
accepted for publication in the Annual Review of Economics
Xilu Chen & Guangyu Pei & Zheng Song & Fabrizio Zilibotti, 2023. "Tertiarization Like China," Annual Review of Economics, vol 15(1).
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