Information technology investment and China's economic growth

While the rapid growth of gross domestic product (GDP) and information technology (IT) investment in China has been seen in recent years, there has little research on interpreting Chinese economic growth from a perspective emphasizing IT as a factor. The paper focuses on the role of information technology in Chinese economic growth during the period from 1990 to 2004, and examines the growth contribution made by information technology with production function and regression methods. Our results indicate that the Chinese economic growth rate devoted to IT investment has risen steadily since 1990. The contribution share of total factor productivity (TFP) from IT in China has increased sharply after 1995, while the TFP growth rate from non-IT sector dropped at that period. Compared with the results of IT contribution to the United States economy, the paper adds to our understanding of how IT affects Chinese economic growth.