| Abstract | The growth of total factor productivity (TFP) for the whole economy can be decomposed into the technical effect and the structural effect, which represent the general technological change and the allocation of the factors among sectors respectively. Based on China's macro and sector data, TFP growth is decomposed into technical effect and structural effect based on growth accounting. Then the sources of China's economic growth at different stages since 1978 is further analyzed in detail. The empirical results show that: (1) Owing to the advantage of latecomer, China has gained a growth of pretty high quality during 1978-2014 with more than one-third of the contribution comes from the general improvement of technological change, while the contribution of structure effect is only one-fifth of technical effect. (2) After 2005, the technological gap between China and the developed economies has been narrowed significantly, and the contribution of technological change on growth declined rapidly. While the contribution of structural effect to economic growth has been continuously improved and support a fairly high TFP growth. Due to the acceleration of industrialization and urbanization, such trend is particularly prominent in both the secondary and the tertiary industries. (3) After the financial crisis, areas of overcapacity such as iron and steel, cement, and industries of "financial and insurance" and "real estate" encounter stagnation and even retrogression technically, while the factor resource allocation has a tendency of "reverse technological progress". And the feature of factor-driven continues to be strengthen until 2014. It is the growth of TFP in Macro and sector levels that support China's rapid economic growth and improve the growth quality. So in the near future, policy tools should be applied to optimize the industrial structure, and induce the factor resources to enter the sub-sectors of higher technical and efficiency levels, in order to exert structural effect of TFP growth. In the medium and long term, emphasis should be put on implementing innovation-driven development strategies. |