Why is Chinese Productivity Crushing its Neighbors?

Chinese workers are dramatically outperforming their neighbors with important implications for Vietnam, Indonesia, and Thailand.  (Pakistan’s stagnant productivity is not as surprising).  Between 2000 and 2011, China’s output per employed person grew by approximately 280%. Vietnam’s 160% is a close second (see chart below).

Is this a matter of Chinese productivity rising to higher output industries, overabundance of capital, and an increasingly educated workforce? Or is this rather a reflection of significantly weak ASEAN productivity?

More importantly, can China’s rapid productivity growth be sustained?


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