Comparative Analysis of Capital Productivity in China’s High-Tech Industries

While labor productivityis a topicof constant debate and hasbeen studied extensively, far less attention has been devoted to the question of capital productivity. Productive use of physical capital is an important source of economic growth and investment return. This paper presents a comparative study of capital productivity in China’s high-tech industry. Using a version of theperpetualinventory method (PIM), new estimates have been madeof the physical capital stock by sector. Capital productivity in China’s high-tech industry is higherthan intotalmanufacturing,butthegapbetweenthem hasbeen shrinking.Comparison with high-tech industries in the US., highlightsthat China’shigh-tech industries could play a moreimportant rolein the growth of manufacturing and the whole economy.