Drivers of Economic Growth and Structural Change in China under the Carbon Peaking and Carbon Neutrality Goals

Abstract

Through a literature review and theoretical analysis, this paper examines how the reconstruction of the production function during the low-carbon transition shapes the drivers of economic growth and structural change in China. It also explores the new theoretical perspectives required, and the challenges encountered, in pursuing the “dual carbon” goals of carbon peaking by 2030 and carbon neutrality by 2060. The study finds that the production function is being reconfigured through the reallocation of factor inputs, the introduction of directed technological progress, policy guidance, and adjustment of the industrial structure. By developing low-carbon industries—including clean energy, green manufacturing, and environmental services—and by accelerating the rise of emerging industries while upgrading traditional ones, China’s economic structure is undergoing a transition toward lower carbon intensity and higher technological content. Technological innovation, green finance, carbon emissions trading, and international cooperation are identified as the key pathways through which China can realize its carbon neutrality goal. The paper concludes with policy recommendations aimed at supporting the joint pursuit of growth and decarbonization.