Abstract: According to the logic of “endowment structure-industrial structure-production efficiency-economic growth” in new structural economics, this paper analyzes the theoretical mechanism of “structural slowdown” caused by the service of industrial structure in China from three aspects: the cyclic accumulation of structural change, the demand of endowment structure and comparative advantage, and explains the compensation mechanism for the loss of service efficiency of industrial structure from the perspectives of soft and hard infrastructure, productive service industry and human capital.Then, the panel data of 275 prefecture level cities from 2003 to 2016 are used to test the above conclusions through simultaneous equation model and threshold regression.The results show that the change process of industrial structure from industrialization to service presents a “inverted U-shaped” effect on production efficiency, which first promotes and then suppresses, and through production efficiency, the economy presents a change trend from “structural acceleration” to “structural deceleration”; on the whole, productive service industry cannot compensate for the efficiency loss caused by industrial structure service, but it has a positive effect on the efficiency compensation of provincial capital and the sub provincial capital city; hard infrastructure, marketization and government intervention can compensate for the loss of efficiency in the process of industrial structure service to varying degrees, but human capital cannot compensate for the loss of efficiency.The above conclusions have policy implications: in the case of low labor productivity in China′s industrial sector, we should adhere to the implementation of the “industrialization” strategy, change from increasing industrial output value to increasing industrial productivity, in order to compensate for the loss of production efficiency caused by the service-oriented industrial structure. In addition, the internal structure of service industry should be inclined to productive service industry.

Key words: industrial structure service, production efficiency, structural slowdown, new structural economics