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Time:March 23-25, 2019
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【“Bozhi Macro Forum”, Medium and Long-term Development Research Team,(CDRF)】Calculation of Total Factor Productivity and Potential Growth Rate

In recent years, China's economy has gradually shifted from the phase of high-speed growth to medium-speed and high-quality growth. Instead of blindly pursuing high-speed growth in the past, China has focused on total factor productivity (TFP) to promote the reform of quality, efficiency and power of economic development. In this context, it is of great theoretical and practical significance to accurately estimate China's total factor productivity and potential growth rate. Based on the calculation of capital stock and labor input, this paper employs the production function method and data envelopment analysis to calculate the annual TFP growth rate of all industries from 1979 to 2018, the quarterly TFP growth rate of all industries from 2006 to 2018, and the annual TFP growth rate of 19 major industries from 2006 to 2018 respectively. Meanwhile, by predicting the growth rate of capital stock, the growth rate of employment and the growth rate of TFP in the next five years, the production function method is adopted to forecast the potential growth rate in the next five years.

The study finds that, first, from the perspective of the annual data of all industries, since 1978, China's TFP growth has experienced three peaks in 1984, 1992 and 2007 respectively, and the TFP growth rate has been stabilized at around 3% in the recent five years. Second, in terms of the quarterly data of all industries, after the financial crisis, China's TFP growth rate dropped sharply, and continued to fluctuate and decline after a certain rebound. Around 2016, an inflection point from decline to rise occurred. Third, with regard to of the tertiary industry, the TFP of the tertiary industry has the highest annual growth rate since 2006, followed by the secondary industry, and the TFP of the primary industry basically shows negative growth. Fourth, from the perspective of sub-sectors, during the entire sample period from 2006 to 2018, the TFP growth rate of different industries is significantly different, and the TFP growth rate in the production service industry is relatively fast. Fifth, the potential growth rate is expected to present a slight decline in the next five years, falling to about 5.82% in 2023. Finally, it is suggested to improve the low-efficiency sectors, improve the efficiency of internal factor allocation of industries, promote the upgrading of consumption structure and industrial structure, accelerate the development and opening up of knowledge-intensive service industry, improve human capital and accelerate frontier innovation, and improve total factor productivity and potential growth rate.

附件下载:Calculation of Total Factor Productivity and Potential Growth Rate