Dualism has long been a distinguished feature of many developing economies. This paper attempts to examine the possible contributions of structural change, measured by labour reallocation from agriculture to non-agriculture, to the growth of total factor productivity (TFP) in China during reform. Building upon the framework developed by Temple and WÖßmann (2006), we find that a three-sector model is theoretically more suitable to identify the role of labour reallocation to TFP growth in rural China.