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China in the Global Economy

Edited by P. J. Lloyd and Xiao-guang Zhang

China in the Global Economy focuses on the theme of twin transitions occurring in the Chinese economy: the transition from a centrally planned economic system to a market oriented one, and from an agrarian to a modern industrialised society. China’s exporters face unprecedented competition in the world market and the flow of foreign direct investment has fallen restraining the growth of the domestic economy. These new challenges have fuelled debate on the perspective of the Chinese economy and its role in the global economy.
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Chapter 12: Off-farm migration of labour and long-term economic growth in China

Xiao-guang Zhang


12. Off-farm migration of labour and longterm economic growth in China Xiao-guang Zhang Economic development is a long-term process, consisting of not only the growth but also the structural change of the economy. A fundamental structural change in long-term economic growth has been the shift of economic activities from the agricultural to non-agricultural sector. This is reflected in the persistent decline in the share of agriculture in both national output and labour employment. History has shown that this structural change in developed countries and developing countries is fundamentally different. Developed countries have maintained a relatively balanced growth path during the process of their longterm economic development.1 Developing countries are less fortunate. As late-comers in the global industrialization process, many developing countries are confronting a dualistic economic structure: a large and traditional agricultural sector coexisting with a small modern industrial sector.2 The increasing sophistication of modern technologies and the requirement for large capital investment have made the absorption of rural labour by modern industry more difficult to accomplish than ever before. As a result, in many developing countries, the share of agriculture in total labour employment is far greater than its share in total output. The structural change towards industrialization has been slow and increasingly unbalanced. A large proportion of the labour force in rural areas is either unemployed or underemployed, which also contributes to low per capita incomes and a poor living standard. As the largest developing country in the world, China faces the daunting task of transferring...

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