Abstract
China's industry has experienced robust growth under persistent structural reform since 1978. By estimating the stochastic frontier function, we find that the averaged TFP growth has exceeded the quantitative growth of inputs since 1992, but the contribution of productivity to output growth declines after 2001. Using a decomposition technique, we then find that the effect of factor reallocation due to structural reform, sometimes referred to as structural bonus, has contributed to TFP growth substantially, but it too declines over time. Empirical analysis reveals that reforms in factor markets and industrial structure significantly account for the overall trend and the sectoral heterogeneity of structural bonus during the industrialization process.