SECTORAL COINTEGRATION, STRUCTURAL BREAK AND AGRICULTURE ROLE IN THE CHINESE ECONOMY IN 1952-92 - A VAR APPROACH

A VAR model is constructed to study the sectoral cointegration relatio nship in China. As a primary sector of the economy, agriculture is fou nd to be a growth engine throughout the data period 1952-92 although i ts contribution to GDP declined steadily over time. This evidence is c onsistently found in both the long-run and the short-run models of a V AR. In contrast, the growth of non-agricultural sectors had little eff ect on agriculture in 1952-77. However, a structural break is found un der the economic reforms (1977-92) when industry and other non-agricul tural sectors started to cause agriculture to grow.