Evolution of Industrial Structure and Economic Growth in Hebei Province, China

Over the past several decades, old industrialized regions worldwide have faced immense pressure to adapt to global economic shifts. Using one of China’s major industrial provinces, Hebei, as a representative case study, this study examines how the evolution of one of China’s old industrial provinces, Hebei’s industrial structure has influenced its economic growth from 1990 to 2023. Drawing on theories of structural transformation and endogenous growth, we argue that the reallocation of resources from lower-productivity sectors (e.g., agriculture) to higher-productivity sectors (manufacturing and services) can act as an engine of growth. We employ a shift-share analysis (SSA) to decompose Hebei’s economic growth into components attributable to national trends, industrial structure, and regional competitive performance. The results reveal a globally relevant pattern of stagnation: while Hebei’s growth largely benefited from nationwide economic expansion (national effect), its heavy industrial structure initially posed a drag on growth (negative structural effect) and its regional competitive advantage in steel and energy sectors has eroded over time (weakening competitive effect). Our regression analysis further shows that growth was overwhelmingly dependent on capital accumulation while the contribution of labor was statistically insignificant, pointing to a low-productivity trap common in such regions. By integrating these methods, this study provides a robust diagnostic framework for identifying the root causes of economic distress in legacy industrial regions both within and outside China. These findings underscore the importance of structural upgrading for sustainable growth and offer critical lessons for policymakers globally, highlighting the necessity of moving beyond extensive, capital-driven growth toward an intensive model focused on industrial diversification, innovation, and human capital to ensure the sustainable revitalization of post-industrial economies.