Based on the data of ISIC classification, This paper examines the impact of structural change on productivity through a decomposition of aggregate manufacturing productivity growth in China over the period 1978-2009. First, the shift-share analysis is utilized to measure the impact of the allocation of labor and capital on total factor productivity (TFP) growth in manufacturing. Next, the translog production function and cross-section regressions are applied to evaluate the impacts of manufacturing agglomeration on growth and convergence of regional disparities. The findings show the efficiency of factor reallocation results from the structural change. The results show that the factors that contribute to convergence vary by industry. In the manufacturing industry, capital input, localization economies, and other factors contribute to economic convergence. In contrast, with regard to the nonmanufacturing industry, localization economies contribute to the increase in productivity disparity.