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Multiple Forces Driving China's Economic Development: A New Analytic Framework

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  • Yahua Wang
  • Angang Hu

Abstract

Based on economic growth theory and the World Bank's analytical framework relating to the quality of growth, the present paper constructs a framework that encompasses physical, international, human, natural and knowledge capital to synthetically interpret economic development. After defining the five types of capital and total capital, we analyze the dynamic changes of these types of capital in China and in other countries. The results show that since China's reform and opening up, knowledge, international, human and physical capital have grown rapidly, with speeds of growth higher than that of economic growth. As the five types of capital have all increased at varying paces, the savings level of total capital in China has quadrupled in 25 years and overtook that of the USA in the 1990s. The changes in the five types of capital and total capital reveal that there are progressively multiple driving forces behind China's rapid economic development. Implications for China's long‐term economic development are thereby raised.

Suggested Citation

  • Yahua Wang & Angang Hu, 2007. "Multiple Forces Driving China's Economic Development: A New Analytic Framework," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 15(3), pages 103-120, May.
    • Handle: RePEc:bla:chinae:v:15:y:2007:i:3:p:103-120
    DOI: 10.1111/j.1749-124X.2007.00071.x
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    References listed on IDEAS

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    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. World Bank, 2006. "World Development Indicators 2006," World Bank Publications - Books, The World Bank Group, number 8151.
    3. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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    Cited by:

    1. Gunther Schnabl, 2017. "Exchange Rate Regime, Financial Market Bubbles and Long-term Growth in China: Lessons from Japan," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 25(1), pages 32-57, January.
    2. Gunther Schnabl, 2019. "China's Overinvestment and International Trade Conflicts," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 27(5), pages 37-62, September.

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