The Mystery of China's Interprovincial Manufacturing Convergence & Differentiation of Overall Economic Growth——From the Perspective of Sector Productivity Growth & Cross-sector Redistribution of Resources

This article breaks down productivity growth into intra-sector productivity growth & inter-sectoral resource reallocation, & analyzes the reasons for the convergence of China's inter-provincial manufacturing industry & the differences in overall economic growth. The conclusions are as follows: (1) The growth of the service sector is diverging across provinces. The divergent growth of the service sector may be the key cause of the overall economic inconsistency, but not all. (2) Although the productivity of manufacturing industry has accelerated convergence across provinces, the convergence of manufacturing industry on the overall economy has been weakened by changes in the industrial structure due to the accelerated transfer of labor in the manufacturing industry. (3) The labor outflow from agriculture enters the service industry & non-manufacturing sectors, rather than the manufacturing industries with higher labor productivity. Therefore, the substantial pulling effect of the changes in the industrial structure on the overall economy is limited.