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Deceleration of China's Economic Growth: Causes and Countermeasures

Author

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  • Guoqiang Tian

    (School of Economics and Institute for Advanced Research, Shanghai University of Finance and Economics, Shanghai 200433, China; Department of Economics, Texas A&M University, College Station, TX 77843, USA)

Abstract

China's economic growth has been declining continuously at a rapid rate since 2011. It dropped to 6.7% in 2016 by more than 3% from nearly 10% average growth rate during 1979¨C2010. As for its causes, there are different interpretations among Chinese economists. One of the interpretations, which is held by some scholars including Justin Yifu Lin, is that external and cyclical factors are the main causes for the decline. The author disagrees with this viewpoint and holds that the root cause of economic deceleration is the delay in deep institutional reforms. An inclusive economy and state coercive capacity are two essential ingredients for sustaining economic prosperity. China must further enhance economic inclusiveness, and accelerate its transition into an efficiency-driven and innovation-driven economy through deepened comprehensive marketization reforms. Meanwhile, it should further strengthen the rule of law to build a limited government that is capable, accountable, effective and caring.

Suggested Citation

  • Guoqiang Tian, 2019. "Deceleration of China's Economic Growth: Causes and Countermeasures," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 14(1), pages 3-25, March.
    • Handle: RePEc:fec:journl:v:14:y:2019:i:1:p:3-25
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    File URL: http://journal.hep.com.cn/fec/EN/10.3868/s060-008-019-0002-4
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    Citations

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    Cited by:

    1. Anping Chen & Nicolaas Groenewold, 2019. "Regional resilience in China: The response of the provinces to the growth slowdown," Economics Discussion / Working Papers 19-06, The University of Western Australia, Department of Economics.
    2. Szunomár, Ágnes, 2019. "A digitális nagy ugrás. Lassulás és modernizációs stratégiaváltás Kínában [The great digital leap. Deceleration and a change in modernisation strategy in China]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(12), pages 1312-1346.
    3. Xiaoyong Cao & Jiong Gong & Guoqiang Tian, 2022. "State aid in government procurement," The World Economy, Wiley Blackwell, vol. 45(12), pages 3933-3946, December.

    More about this item

    Keywords

    China's economic growth; causes and countermeasures; deep institutional reforms; deceleration; inclusive economy; efficiency-driven; innovation-driven; external and cyclical factors;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • P11 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Planning, Coordination, and Reform

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