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Policy Connotations of China’s Intermediate Input Rate Changes in Recent Years (No.311, 2020)

Feb 20,2021

By He Jianwu & Li Shantong, Research Department of Development Strategies and Regional Economy, DRC; Tang Zedi, China Institute for Development Planning, Tsinghua University; Zhang Yibing, School of Economics, Capital University of Economics and Business

Research Report, No.311, 2020 (Total 6055) 2020-12-25

Abstract: Based on historical, international and Chinese regional data, this paper reveals the general law of the change of intermediate input rate and the evolution characteristics of China’s regional industrial structure. From the global perspective, the connection between intermediate input rate and the level of economic development presents an inverted U curve, showing a trend from rise to decline. From the national perspective, China’s intermediate input rate has experienced a transitional change. Before 2010, the upgrading of the internal structure of the manufacturing industry was the main cause for the rise of the intermediate input rate across the board. After 2010, the accelerated upgrading of industrial structure between different sectors, especially the rapid increase in the proportion of added value of tertiary industry in GDP, led to the decline of the intermediate input rate on the whole. This paper holds that as far as a country is concerned, different provinces enjoy different resources and the stages of their industrialization level are bound to be different. Consequently, different measures could be taken according to the difference in the changing trend of intermediate input rate, so as to advance their industrial transformation and upgrading.

Keywords: intermediate input rate, structural upgrading, development level, manufacturing industry