The paper investigates the determinants of productivity growth in China. It also analyses the sustainability of the country's industrial growth by estimating sectoral productivity, accounting for energy usage and emission since the start of the market-oriented reforms in the late 1970s. The growth accounting analysis indicates that productivity is the most significant driver of growth. Energy and capital are also important factors promoting China's industrial growth. The substantial productivity improvement of China's industry is attributable more to high-tech light industrial sectors. Heavy industry, characterized by high energy emission levels, lags behind in terms of productivity and overall technical change.
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