The speech reviews the evolution of development thinking and the development performance in developing countries, especially in China, since the end of World War II and proposes the new structural economics (NSE) to replace structuralism and neoliberalism as the third edition of development economics. The NSE highlights that economic development is a process of technological innovation and industrial upgrading, which increases labor productivity, and of improvement and adaption in hard and soft infrastructure, which reduces transaction costs. The NSE argues for a developing country to have an efficient market and an enabling state to facilitate industrial upgrading and structural transformation according to a country’s comparative advantages and to tap into the potential of advantage of backwardness to achieve inclusive and dynamic growth and transformation.
