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This study aims at analyzing the impact of industrial structure upgrading on the economic growth of China. Based on panel data of 283 cities of China from 2001 to 2014, this paper uses the spatial panel SARAR to analyze the influence of industrial structure upgrading on the economic growth of China’s prefecture-level cities. The results show that China’s urban economic growth has significant spatial correlation: industrial structure upgrading is the prime reason for the economic growth and the differences in the urban economy in China, and the impact of structural dividend on economic growth is positive. However, with the further upgrading of the industrial structure, the structural dividend will become negative, i.e. there is a significant inverted “U” relationship between the industrial structure and economic growth. The study provides new empirical evidence for the new classical economic growth theory and a new research experience for a follow-up study.

This study aims at analyzing the difference in the level of economic development between China’s counties from the two perspectives of industrial policy and production efficiency. Based on panel data of 1830 Chinese counties, this study employs the new classical economic growth theory framework to analyze the counties’ economic growth by the perpetual inventory method, Malmquist index, among others. The results show that the economy of the counties exhibits δ convergence since 2004, and the absolute differences in the different counties are expanding. Industrial policy ensures the additional deepening of the level of capital in the county. Additionally, a substantial difference was observed between the agricultural sector and the non-agricultural sector, whereby the total factor productivity and the technical efficiency are on the rise, resulting in the phenomenon of dual paths of technological progress. In summary, the capital deepening difference between the sectors, production efficiency, and dual paths of technological progress owing to the counties’ industrial policy are the basic reasons for the regional differences in the level of economic development in China.