Productivity Growth of the Nontradable Sectors in China

12 Pages Posted: 9 Oct 2014

See all articles by Dong He

Dong He

International Monetary Fund (IMF) - Monetary and Exchange Affairs Department

Wenlang Zhang

Independent

Gaofeng Han

Hong Kong Monetary Authority; University of California, Santa Cruz - Department of Economics

Tommy T. Wu

Hong Kong Monetary Authority

Date Written: November 2014

Abstract

Little is known about the total factor productivity of the nontradable sectors in China. In this paper we estimate productivity growth of the nontradable sectors by studying the relative price movements of the nontradable sectors vis‐à‐vis the tradable sectors, i.e. changes in the internal real exchange rate. We find that prices of the nontradable sectors have risen significantly faster than those of the tradable sectors since China's accession to the WTO, and as a result China's internal real exchange rate has appreciated faster than the renminbi real effective exchange rate. We also find that the nontradable sectors have seen much lower productivity growth than the tradable sectors. We argue that it is important to raise China's productivity growth in the nontradable sectors through policy actions to achieve growth rebalancing and containing inflationary pressures in the medium run.

Suggested Citation

He, Dong and Zhang, Wenlang and Han, Gaofeng and Wu, Tommy T., Productivity Growth of the Nontradable Sectors in China (November 2014). Review of Development Economics, Vol. 18, Issue 4, pp. 655-666, 2014, Available at SSRN: https://ssrn.com/abstract=2507547 or http://dx.doi.org/10.1111/rode.12109

Dong He (Contact Author)

International Monetary Fund (IMF) - Monetary and Exchange Affairs Department ( email )

700 19th Street NW
Washington, DC 20431
United States
(202) 623-4062 (Phone)
(202) 589-4062 (Fax)

Wenlang Zhang

Independent ( email )

Gaofeng Han

Hong Kong Monetary Authority ( email )

3 Garden Road, 30th Floor
Hong Kong
Hong Kong

University of California, Santa Cruz - Department of Economics ( email )

Santa Cruz, CA 95064
United States

Tommy T. Wu

Hong Kong Monetary Authority ( email )

55/F, Two International Finance Centre
8 Finance Street, Central
Hong Kong
Hong Kong

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
0
Abstract Views
316
PlumX Metrics