Crossing the Growth Threshold： Service-Based Economy, Knowledge Process and Reshaping of Efficiency Model

• Published in: China economist (Beijing, China) Vol. 12; no. 3; pp. 64 - 77
• Main Author: 袁富华 张平 刘霞辉 楠玉
• Format: Journal Article
• Language: English
• Published: Beijing 中国社会科学院工业经济研究所 01.05.2017; Institute of Industrial Economics, Chinese Academy of Social Sciences
• Subjects: Consumption; Economic growth; Economic models; Efficiency; High income; Human capital; Industrial development; Industrialized nations; Knowledge; Labor productivity; Macroeconomics; Productivity; Transition economies; Urbanization; China; Japan; Growth threshold; reshaping of efficiency model; service-based economy; knowledge process
• ISSN: 1673-8837

The transition from middle-income to high-income stage is fraught with risks of growth divergence. Economic transition is clouded by the following possibilities： （1）falling share of industrial seetor through industrial depression and weakening growth momentum caused by the large urbanization costs; （2） the subordination of service sector as a result of nearly irreversibly industrial professional, which falters the process of service sector transition and upgrading,＂ （3） inefficient knowledge production allocation and human capital upgrade due to the absence of incentivized compensation of knowledge consumption. We suggest that a country should reshape its efficiency model by upgrading knowledge factor and human capital as the pre-requisite. Given the dilemmas of transition, China should take the faetorization trend of service sector and reshape efficiency model through institutional reform, ensuring that service sector will develop in tandem with industrial sector.