Direction and Route of China's Industrial Upgrading

The essence of transforming economic growth pattern is the adjustment of industrial structure.Most of the existing researches believed that proportion of China's secondary industry is too high,and the direction of China's industrial restructuring is to raise the proportion of the tertiary industry.In this paper,the authors analyzed the efficiency,supply and demand and international trade of the three industries,and made the following judgments: ①Rising proportion of the tertiary industries in developed countries does not justify it as the direction of industrial upgrade,nor it is better than the secondary industry;②Despite growing proportion of tertiary industry in developed countries,there is no significant drop in the ratio of commodities provided by secondary industry in final consumption;③Rising proportion of tertiary industry is based on advanced international trade in developed countries and fast growing secondary industry in developing countries,a prerequisite global does not have at the moment;④Rising proportion of tertiary industry in developed countries is at the expense of price distortion between tertiary and secondary industry,whereas sharp price rise in secondary industry will push up the proportion.This paper calculated China's industrial structure of 2000—2009 with purchasing power parity data.Results show that current prevailing industrial structure data overestimated the secondary industry by nearly 14 percentage points,the ratio between the three industries should be: 5∶32∶63,which is close to that of Japan in 2000.Compared to developed countries with the same level of per capita GDP,the ratio of China's secondary industry is not too high,but too low and there is room for improvement.Accelerated development of the secondary industry,especially manufacturing in China remains the direction of industrial upgrading and the focus of industrial policy.Despite three decades of fast growth,factor endowments of China's economy continue to have quantitative change,but qualitative change has yet occurred.China's comparative advantage still lies in labor-intensive industries at least during the 12th Five-Year Plan period.