An Empirical Analysis Of The Chinese Baumol-Fox Hypothesis

China’s national economic development has entered a new normal,in the context of the new normal,the industrial structure has a further adjustment and economic growth rate is gradually stabilized.With the China’s economic development into the new normal,what is the inherent mechanism of the gradual increase in the share of the service sector in the economy? Whether there is a link between the economic growth rate and the lagged service industry labor productivity growth rate.Through the test of Baumol-Fuchs hypothesis in the China macro economy,we can have a answer to these questions.Baumol-Fuchs hypothesis is based on the Baumol’s unbalanced growth model,it can systematically have a link among the labor force productivity growth rate,the share of the service industry and the economic growth rate,finally set the efficiency-structure-speed as a whole.In this paper,through the empirical analysis of Baumol-Fuchs hypothesis in China,the paper tries to test whether the hypothesis can be used to study the service industry in China.First of all,based on the comparative analysis of China ’s service industry,primary industry,secondary industry and the comparative analysis of service industry growth in the east,middle and west regions,we can understand the basic characteristics of China’s service industry.Secondly,we test whether the applicable conditions of the Baumol-Fuchs hypothesis is set up in our country.With this hypothesis as the starting point,from the whole of our country and the three regions of the eastern,central and western parts,we verify the Baumol-Fuchs hypothesis and the impact of service industry labor productivity growth lagged behind on the employment share of the service industry.Finally,explore the relationship between the lagged labor productivity growth rate and the China’s economic growth rate.The main conclusions are as follows: first,China’s service industry,the growth rate of labor productivity is relatively backward;second,the labor market productivity growth rate is lagged behind,and more and more labor force flows to the service sector.The existence of the lagged labor productivity growth rate in the service sector lead to an increase in employment share in the service sector and the "structural effect" of Baumol-Fuchs hypothesis exists in our country.Third,the lagged productivity growth rate in the service sector will not bring about a slowdown in economic growth and the "speed effect" of the Baumol-Fuchs hypothesis is not established in our country.