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The Dilemmas of China’s Shift in Growth Trajectory and Economic Governance

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  • Miklós Losoncz

    (Research professor at the Financial Institutions Department of the Institute of Finance and Accounting of the Budapest Business School's Faculty of Finance and Accountancy Studies of the Hungarian Academy of Sciences)

Abstract

The slowdown in China’s GDP growth in recent years suggests the exhaustion of the driving forces of extensive economic growth and signals a need to switch to an intensive growth trajectory. In order to successfully orchestrate this shift, a reform of the economy’s operation is necessary, including a change in economic policy objectives in order to avoid the middle income trap. This paper analyses the changing role of the sources of economic growth and the main features of the change in the growth trajectory in the post-2010 period, and their relationships with economic governance based on the relevant domestic and international literature and statistical data, without entering into specific details. According to the author’s hypothesis, the Chinese government is prioritising the conflicting objectives of economic rationality and socio-political stability at the expense of the former

Suggested Citation

  • Miklós Losoncz, 2017. "The Dilemmas of China’s Shift in Growth Trajectory and Economic Governance," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 16(Sepcial I), pages 21-49.
    • Handle: RePEc:mnb:finrev:v:16:y:2017:i:specialissue:p:21-49
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    File URL: http://english.hitelintezetiszemle.hu/letoltes/miklos-losoncz.pdf
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    References listed on IDEAS

    as
    1. Aiyar, Shekhar & Duval, Romain & Puy, Damien & Wu, Yiqun & Zhang, Longmei, 2018. "Growth slowdowns and the middle-income trap," Japan and the World Economy, Elsevier, vol. 48(C), pages 22-37.
    2. Sarmiza Pencea & Ana-Cristina Bâlgăr, 2016. "China’s Transition to the Innovation-Driven Economy: Stepping Stones and Road-Blocks," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences;Institute for World Economy of the Romanian Academy, vol. 4(1), pages 31-46, May.
    3. Christine Wong, 2011. "The Fiscal Stimulus Programme and Public Governance Issues in China," OECD Journal on Budgeting, OECD Publishing, vol. 11(3), pages 1-22.
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    Cited by:

    1. Laura Komlóssy & Gyöngyi Vargáné Körmendi, 2019. "China in Search of Equilibrium – Transition Dilemmas of Growth and Stability," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 18(3), pages 114-134.

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    More about this item

    Keywords

    China; growth trajectory; change in economic model; structural reforms; liberalisation; foreign trade policy; middle income trap;
    All these keywords.

    JEL classification:

    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • F60 - International Economics - - Economic Impacts of Globalization - - - General

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