Structural Transformation in the Chinese Economy: From Manufacturing to Services

Zhang Bin, PhD, Senior Fellow, China Finance 40 Forum & Chinese Academy of Social Sciences, Beijing

A version of this article was originally published in the Business Standard as ‘The way forward for the Chinese economy’, 18 March 2017. This is part of a series by Chinese economists facilitated by the ICS.

As part of the cycle of economic development, all advanced economies have undergone industrialization and post-industrialization. Industrialization involved the manufacturing sector’s focus on increasing GDP, employment rate and consumption of manufactured products. For China, the post-industrialization phase implies economic activities will be concentrate in the service industry.

Based on measures of income level, the rate of growth of the manufacturing sector, employment rate and the consumption of manufactured products, China has passed the peak of industrialization. If global experience is a guide, the peak of industrialization happens when per capita GDP ranges between US$8,000 and US$10,000 (PPP based on 1990 value). After reaching the peak of US$10,000, the proportion of the industrial sector indicators continues to decline. By this yardstick, China has passed the peak of industrialization. Continue reading “Structural Transformation in the Chinese Economy: From Manufacturing to Services”

Chinese Steel Industry’s Improving Performance and Implications for India

Aravind Yelery, PhD, Assistant Director, Institute of Chinese Studies

China recorded the highest global production of steel in 2016 despite its slowed growth rate. This suggests that steelmakers were focused on boosting output because they were eager to capture higher profit margins.

Steel production in China increased to 68,510 thousand tonnes in October 2016 from 68,170 thousand tonnes in September. Monthly production in China averaged 29,010.98 thousand tonnes from 1990 until 2016, reaching an all time high of 70,650 thousand tonnes in March 2016 with a record low of 4,918 thousand tonnes in February 1990. The rising trend in capacity continued from 2015 when China’s national steel output was 1.1235 billion tons, up by 0.6 percent over the previous year. Continue reading “Chinese Steel Industry’s Improving Performance and Implications for India”