Quantitative Analysis on China's Total Factor Productivity: 1979-2004-Based on DEA-Malmquist Approach

This paper presents a quantitative analysis on China's Total Factor Productivity (TFP) based on the non-parametric DEA-Malmquist index approach, which avoids the various problems in parametric method studies, such as the assumption of production function and the need to test the validity and rationality of the parameter estimation. From 1979 to 2004, the average TFP growth rate of China was 1.8%. At the initial stage of reform and opening up, the average TFP growth rate of China was 1%, and its contribution to economic growth was about 7%; in the period of deepening reform, the two above-mentioned numbers were 2.7% and 25% respectively; and at the further deepening new stage, they were 2.1% and 24% respectively. The tendency of the TFP change shows that before 1980s, the TFP growth rate kept rising, and then there were ups and downs until the mid-90s. The TFP growth peaked in 1992 and then began to decline before it became stable after 1995.