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China's Great Ascendancy and structural risks: consequences of asymmetric market liberalisation

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  • Yiping Huang

Abstract

China's great ascendancy from a poor agrarian economy to an economic superpower is unprecedented. But in the process, structural imbalances, resource inefficiency, and income inequality worsened rapidly. It is argued that the coexistence of China's extraordinary growth and serious structural risks are two sides of the same coin: asymmetric liberalisation of product and factor markets. Distortions in markets for labour, capital, land, energy, and the environment lower production costs, increase corporate profits, raise investment returns, improve the international competitiveness of Chinese goods, and therefore lift China's growth. But they also depress consumption. China needs to accelerate factor market liberalisation in order to complete the transition to a market economy and to lock the economy onto a more sustainable path. Copyright © 2010 The Author. Journal compilation © 2010 Crawford School of Economics and Government, The Australian National University and Blackwell Publishing Asia Pty Ltd..

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  • Yiping Huang, 2010. "China's Great Ascendancy and structural risks: consequences of asymmetric market liberalisation," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, vol. 24(1), pages 65-85, May.
  • Handle: RePEc:bla:apacel:v:24:y:2010:i:1:p:65-85
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    References listed on IDEAS

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    Cited by:

    1. Du, Julan & Fang, Hongsheng & Jin, Xiangrong, 2014. "The “growth-first strategy” and the imbalance between consumption and investment in China," China Economic Review, Elsevier, vol. 31(C), pages 441-458.
    2. Stephen Howes & Paul Wyrwoll, . "New Challenges to the Export Oriented Growth Model," Chapters, Economic Research Institute for ASEAN and East Asia (ERIA).
    3. Howes, Stephen & Wyrwoll, Paul, 2012. "Asia’s Wicked Environmental Problems," ADBI Working Papers 348, Asian Development Bank Institute.
    4. Howes, Stephen & Wyrwoll, Paul, 2012. "Climate Change Mitigation and Green Growth in Developing Asia," ADBI Working Papers 369, Asian Development Bank Institute.
    5. Nan Geng & Papa M N'Diaye, 2012. "Determinants of Corporate Investment in China; Evidence From Cross-Country Firm Level Data," IMF Working Papers 12/80, International Monetary Fund.
    6. Stephen Howes & Paul Wyrwoll, 2012. "Climate Change Mitigation and Green Growth in Developing Asia," Working Papers id:5059, eSocialSciences.

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