Evaluating Production Efficiency in China examines production from engineering and statistics perspectives rather than from economics and mathematics perspectives. The authors present an observable benchmark as the criterion of the production efficiency to replace the unobservable production frontier surface. This book discusses several different computing technologies, controllable variable as a path of identification, changes in production efficiency by decision making on specific operating conditions, and optimal resource allocation. The book provides a channel to tap inside the success stories of China, exploiting the way of changes in production efficiency during China’s development in the past 30 years. This book examines the concepts and realization of production efficiencies across all areas of the economy. Also the book provides the perspective of foreign direct investment (FDI) absorption to identify how Chinese economy changes in production efficiency.

This dissertation studies the production efficiency and productivity of agriculture in Shanxi province after Chinese economic reforms. The main question about the economic aspects of agriculture we want to address is the performance of Chinese agriculture since 1980. We use a newly constructed county-level input and output quantity data set to obtain technical efficiency and measure the Malmquist productivity index and its components. We first use the nonparametric method of Data Envelopment Analysis (DEA) to obtain Pareto-Koopmans measures of technical efficiency of individual counties in Shanxi province during year 1981-2010 in a multi-output, multi-input production framework. We disaggregate overall efficiency into two components representing output and input efficiencies and evaluate the contribution of individual outputs and inputs to the measured level of overall efficiency. We also examine the utilization of modern agricultural inputs compared to the traditional inputs. Next, We investigate the temporal and spatial nature of productivity growth of Chinese agriculture in Shanxi province. The results indicate that growth in the Malmquist productivity index over the 1983–2010 periods was 1.2% annually for the entire province. Decomposition of the Malmquist productivity index shows that technical change contributed to the growth in productivity by 0.8% per year, while efficiency change increased productivity by 0.4% per year. The results also show that the Malmquist index of productivity changes is fast-, moderate- and slow-growing in different groups. The trend of the growth of productivity is also explained in this dissertation. Finally, across county variation in the DEA measure of efficiency and its components is investigated. We identify a number of important factors and discuss their relevance as determinants of efficiency in agricultural production in Shanxi province. We also evaluate the impact of three important policy changes (named, China’s admission to WTO (2001), abolition of agricultural tax (2006), and subsidization of agricultural machinery (2007)) on agricultural efficiency at both national and county level. An analysis of the measured efficiency level can help to identify factors that enhance or hinder efficient resource utilization. This becomes helpful for public policy for improving efficiency.

This study by Shenggen Fan makes three important and original contributions. It is the first study to report regional patterns of productivity growth in Chinese agriculture. There have been dramatic differences in output and productivity growth among Chinese regions. The second contribution is to measure the separate effects of technical change and institutional reform on productivity growth. Much of the rapid growth in agricultural production and in productivity since the late 1970s has been a consequence of an important series of institutional reforms. The third contribution is the first test of the induced innovation hypothesis against experience in a centrally planned economy. Regional patterns of productivity growth are consistent with the hypothesis that the path of technical change has been responsive to regional differences in resource endowments.

This book explains how policy changes affect farmers' production incentives and efficiency of resource allocation within and outside agriculture in modern China, paying particular attention to the effects of technical inputs on yield and efficiency of spatial crop production pattern. Drawing experiences of agricultural development in different periods after independence and employing two different quantitative techniques, it concludes that government's long term tendency to undermine the role of agriculture, lack of state investment and the inconsistency of market reforms are three major threats to sustained grain production and agricultural growth in China.

China’s growth potential has become a hotly debated topic as the economy has reached an income level susceptible to the “middle-income trap” and financial vulnerabilities are mounting after years of rapid credit expansion. However, the existing literature has largely focused on macro level aggregates, which are ill suited to understanding China’s significant structural transformation and its impact on economic growth. To fill the gap, this paper takes a deep dive into China’s convergence progress in 38 industrial sectors and 11 services sectors, examines past sectoral transitions, and predicts future shifts. We find that China’s productivity convergence remains at an early stage, with the industrial sector more advanced than services. Large variations exist among subsectors, with high-tech industrial sectors, in particular the ICT sector, lagging low-tech sectors. Going forward, ample room remains for further convergence, but the shrinking distance to the frontier, the structural shift from industry to services, and demographic changes will put sustained downward pressure on growth, which could slow to 5 percent by 2025 and 4 percent by 2030. Digitalization, SOE reform, and services sector opening up could be three major forces boosting future growth, while the risks of a financial crisis and a reversal in global integration in trade and technology could slow the pace of convergence.