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Demographic Shift, Population Ageing And Economic Growth In China: A Computable General Equilibrium Analysis

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  • Xiujian Peng

Abstract

. Using a computable general equilibrium (CGE) model and a given ageing profile of the population to forecast the growth path of China's economy during the twenty‐first century, this study finds that: population ageing leads to declining economic growth as labour supply shrinks and the rate of physical capital formation declines; households’ material living standards improve, albeit at a declining rate; falling domestic investment partially offsets declining national savings; and the resulting saving‐investment surplus generates a current account surplus and capital outflows. Finally, the main force that can sustain China's economic growth against the backdrop of population ageing is productivity improvement.

Suggested Citation

  • Xiujian Peng, 2008. "Demographic Shift, Population Ageing And Economic Growth In China: A Computable General Equilibrium Analysis," Pacific Economic Review, Wiley Blackwell, vol. 13(5), pages 680-697, December.
    • Handle: RePEc:bla:pacecr:v:13:y:2008:i:5:p:680-697
    DOI: 10.1111/j.1468-0106.2008.00428.x
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    References listed on IDEAS

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    1. repec:dpr:wpaper:0248 is not listed on IDEAS
    2. Taylor, Alan M., 2002. "A century of current account dynamics," Journal of International Money and Finance, Elsevier, vol. 21(6), pages 725-748, November.
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    Cited by:

    1. Ren, Xianling & Qiao, Jinbao & Ji, Jianyue, 2025. "Population aging and intensified economic downside risk: Evidence from China," Economic Modelling, Elsevier, vol. 152(C).
    2. Dong He & Lillian Cheung & Wenlang Zhang & Tommy Wu, 2012. "How would Capital Account Liberalization Affect China's Capital Flows and the Renminbi Real Exchange Rates?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 20(6), pages 29-54, November.
    3. Pohnpattanapaisankul, Kumpon, 2019. "The Impact of Demographics on Inflation in Thailand," Asian Journal of Applied Economics, Kasetsart University, Center for Applied Economics Research, vol. 26(2), December.
    4. Guonan Ma & Haiwen Zhou, 2009. "China's Large and Rising Net Foreign Asset Position," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 17(5), pages 1-21, September.
    5. Wenqun Gao & Yang Chen & Shaorui Xu & Oleksii Lyulyov & Tetyana Pimonenko, 2023. "The Role of Population Aging in High-Quality Economic Development: Mediating Role of Technological Innovation," SAGE Open, , vol. 13(4), pages 21582440231, October.
    6. Zheng Guo & Linchen Liu & Xuan Liu, 2016. "Population Aging, Marginal Propensity to Consume, and Economic Growth," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 6(9), pages 534-546, September.
    7. Marianne A. Ferber & Patricia Simpson, 2009. "Whither Systemic Reform? A Critical Review of the Literature on the Distributional and Income Adequacy Effects of Systemic Pension Reforms," management revue - Socio-Economic Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 20(3), pages 254-276.
    8. Jiang, Min & Kim, Euijune, 2024. "Measuring the impacts of the two-child policy on industrial structure and economic growth in china using a CGE model," Journal of Asian Economics, Elsevier, vol. 92(C).
    9. K.B. Oh & Xuebin Chen & Jianmei Wang & Geoffrey R. Durden & Nicole El-Haber, 2011. "China’s Changing Demographics and their Influence on Financial Markets," Chapters, in: Lilai Xu (ed.), China’s Economy in the Post-WTO Environment, chapter 3, Edward Elgar Publishing.
    10. Yinyin Cai & Yew-Kwang Ng, 2014. "Part-Peasants: Incomplete Rural–Urban Labour Migration in China," Pacific Economic Review, Wiley Blackwell, vol. 19(4), pages 401-422, October.
    11. Guonan Ma & Zhou Haiwen, 2009. "China’s evolving external wealth and rising creditor position," BIS Working Papers 286, Bank for International Settlements.
    12. Mingyang Li & Panyu Peng & Yibin Ao & Zhongli Zhou & Jian Zuo & Igor Martek, 2024. "Equity in public decision-making: a dynamic comparative study of urban–rural elderly care institution resource allocation in China," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 11(1), pages 1-16, December.
    13. Taoyuan Wei & Qin Zhu & Solveig Glomsrød, 2018. "Ageing Impact on the Economy and Emissions in China: A Global Computable General Equilibrium Analysis," Energies, MDPI, vol. 11(4), pages 1-13, April.

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