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The Nature of China's Economic Growth in the Past Two Decades


  • Zhiqiang Liu


The Chinese economy has grown at record rates since the start of the market-oriented reforms in 1978. Motivated by the Asian productivity debate, this article provides an assessment of the role of total factor productivity in China's economic growth in the past two decades. We identify four main factors in the productivity growth: efficiency gain at the micro level; improvement in resource allocation; diffusion of technology through foreign direct investment; and improvement in infrastructure. We also argue that further state-owned enterprise and banking reforms, an emerging entrepreneurial class and greater research and development efforts are additional driving forces for the medium to long-term total factor productivity growth in China.

Suggested Citation

  • Zhiqiang Liu, 2000. "The Nature of China's Economic Growth in the Past Two Decades," Post-Communist Economies, Taylor & Francis Journals, vol. 12(2), pages 201-214.
  • Handle: RePEc:taf:pocoec:v:12:y:2000:i:2:p:201-214 DOI: 10.1080/14631370050043643

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    References listed on IDEAS

    1. Chen, Jian & Fleisher, Belton M., 1996. "Regional Income Inequality and Economic Growth in China," Journal of Comparative Economics, Elsevier, vol. 22(2), pages 141-164, April.
    2. Gene M. Grossman (ed.), 1996. "Economic Growth," Books, Edward Elgar Publishing, volume 0, number 553.
    3. Woo Wing Thye & Hai Wen & Jin Yibiao & Fan Gang, 1994. "How Successful Has Chinese Enterprise Reform Been? Pitfalls in Opposite Biases and Focus," Journal of Comparative Economics, Elsevier, vol. 18(3), pages 410-437, June.
    4. McMillan, John & Whalley, John & Zhu, Lijing, 1989. "The Impact of China's Economic Reforms on Agricultural Productivity Growth," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 781-807, August.
    5. Jesus Felipe, 1999. "Total factor productivity growth in East Asia: A critical survey," Journal of Development Studies, Taylor & Francis Journals, vol. 35(4), pages 1-41.
    6. Alwyn Young, 1992. "A Tale of Two Cities: Factor Accumulation and Technical Change in Hong Kong and Singapore," NBER Chapters,in: NBER Macroeconomics Annual 1992, Volume 7, pages 13-64 National Bureau of Economic Research, Inc.
    7. Justin Yifu Lin & Zhiqiang Liu, 2000. "Fiscal Decentralization and Economic Growth in China," Economic Development and Cultural Change, University of Chicago Press, vol. 49(1), pages 1-21.
    8. Gregory C. Chow, 1993. "Capital Formation and Economic Growth in China," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 809-842.
    9. Lin, Justin Yifu, 1992. "Rural Reforms and Agricultural Growth in China," American Economic Review, American Economic Association, vol. 82(1), pages 34-51, March.
    10. Wu Yanrui, 1994. "Productivity Growth, Technological Progress and Technical Efficiency Change in China: A Three-Sector Analysis," Chinese Economies Research Centre (CERC) Working Papers 1994-05, University of Adelaide, Chinese Economies Research Centre.
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    Cited by:

    1. Zheng, Jinghai & Bigsten, Arne & Hu, Angang, 2009. "Can China's Growth be Sustained? A Productivity Perspective," World Development, Elsevier, vol. 37(4), pages 874-888, April.
    2. Evgeniya, Gorlova, 2016. "TFP and Intelligence: a cross-national empirical evidence," MPRA Paper 69207, University Library of Munich, Germany.

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