City scale and productivity in China

•Effects of city scale on output per worker in China are examined.•Existing studies use incomplete measures of city scale and may give wrong results.•Statistical yearbook data miss many private sector workers so Census data used here.•Four-fifths of cities are close to estimated productivity-maximizing scale.•Output losses from sub-optimal scale are typically below 10%.

We examine effects of city scale on output per worker in China. Existing studies use wrong measures of scale. Four-fifths of cities are close to the estimated productivity-maximizing scale. Output losses from sub-optimal scale are typically below 10%.