Abstract:  “The world today is undergoing major changes unseen in a century.” We should understand this critical statement from the evolution of world economic dynamics and get to realize that China’s continuing rapid development is indispensable for a new, stable and peaceful world structure yet to be established. To judge China’s future growth potential, the most important gauge is not the absolute income level, but the gap between the per capita GDP of developing countries and that of developed countries. From this indicator, the advantage and potential of China as a latecomer is still great. The major changes unseen in a century have presented China important opportunities to form independent innovation on economic theories. When putting forward the new theory, we should return to Adam Smith’s method of studying problems, as the title of his book suggests—An Inquiry into the Nature and Causes of the Wealth of Nations. To develop the economy, we must rely on technological innovation and industrial upgrading, which is further determined by factor endowment. New Structural Economics starts from factor endowment structure of a country at a certain point of time or varying with the time, aiming to reveal its endogenous economic structure, distortion and operation. New Structural Economics introduces structure into the analysis of modern economics, which is actually a structural revolution of modern economics, bringing new insights not only into development economics and transition economics, but also into various sub-fields of mainstream economics that have a bearing on economic operation. These new insights are opportunities for theoretical innovation.

Key words:  major changes unseen in a century, New Structural Economics, independent theoretical innovation, factor endowment