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Has China's Growth Gone from Miracle to Malady?

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  • Eswar Prasad

    (Cornell University)

Abstract

China's remarkable run of persistently high growth in recent decades is all the more stunning in light of the country's low levels of financial and institutional development, state-dominated economy, and nondemocratic government. Notwithstanding the inefficient and risky growth model, the government has maneuvered the economy around various stresses without any major financial or economic crash. With a shrinking labor force and declining efficiency of investment, raising productivity growth is key to maintaining reasonable GDP growth. Unbalanced reforms, a schizophrenic approach to the role of the market versus the state, and strains in financial and property markets could result in significant volatility but a financial or economic collapse is not in the cards.

Suggested Citation

  • Eswar Prasad, 2023. "Has China's Growth Gone from Miracle to Malady?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 54(1 (Spring), pages 243-270.
    • Handle: RePEc:bin:bpeajo:v:54:y:2023:i:2023-01:p:243-270
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    File URL: https://www.brookings.edu/bpea-articles/emerging-market-challenges/
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    References listed on IDEAS

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    More about this item

    Keywords

    Emerging markets; China;

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • F3 - International Economics - - International Finance
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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