Look For Bottleneck Sectors In The Economy

Since the share of service sector exceed manufacture sector in final product in China economy in 2009,the economy in China faced in deep transition.It has been an important issue that how to highlight the growth rate or the scale of the final product under the ground of the new normal economy.It is an essential question in the view of the structural economy and the industrial economy that which sector is the bottomneck sector in the situation of the current market environment.For the economics,it is known that the factor price wedge will reduce the final product in an economy,and it is found that some part of the difference of the final product in different countries account to the difference in the level of factor price wedge in different countries.The reasons on the factor price wedge can described below,the developing degree of different sectors are different,and the structural of the factor market and factor are different,and the frictions and threshold for different sectors are different.For the limit of factor mobility,the factor prices in different sectors are different,which limit the efficiency of factor used in the whole economy,so the real final product is lower than the potential final product.It is believed in this paper that with the adjustment of factor price in the bottom-neck sector,the scale or the growth rate of final product will be close to the potential level.Based on input-output structure,this paper first caculated intermediate price wedge,capital wedge,high skill,middle skill,low skill labor price wedges and their influences on gross output,then decomposed efficiency improvement item and nonefficiency item.From the results of counterfactual estimation,the misallocation eliminating in Chinese manufacture will not improve the output efficiency in a close economy,while industries like finance,research,IT could largely grow output.Then by introducing intermediate goods elasticity,it is found that the misallocation eliminating in Chinese finance,research,IT sectors will reduce the total product of service sectors,enhance the total product of the manufacture sector.It is described as the squeezing effect between industries.By using world input-output tables,the model finally estimated the international trade effects on misallocation eliminating.When under international background,Chinese manufacture will get international benefits by cutting price wedges.Their nontradable upstream industries can benefit the gross output by international trade effect.In process of network enhancing among industries,some service industries appeared to be over input-output structures.They have little relations on network,but large influence on the productive factors.This paper also discussed these kinds of industries.This paper considers the change of Chinese economic growth path under the model of structural change,and it can be shown that the misallocation eliminating in the above sectors will highlight growth rate for all time or for long time.Finally,finance,research,IT and retail trade,government,health and education sectors are located as the bottom-neck sectors in China.