IDEAS home Printed from
   My bibliography  Save this paper

China in 2006: An economist's view


  • Philipp Maier


Since the start of the economic transformation in 1978, China has been growing at spectacular level. Given the size and growth of its economy, China is in a position to substantially influence world commodity prices and prices for various consumption goods. This report summarises insights from a trip to China, aimed at getting better understanding of how the Chinese economy 'works'. Based on talks with government officials, Chinese and foreign firms, we provide evidence that (i) through piecemeal introduction of market elements, China has successfully made the transition from a planned economy to a marker economy; (ii) political stability is an important determining the attractiveness of China for foreign investors, and (iii) regional disparities are huge, which might at some point pose a concern to further growth. Also we note that China is primarily growing through use of more inputs, not through high productivity. Looking forward, input-based growth is typically not sustainable. As productivity does not tend to grow by 10 percent annually, China's economy will probably slow down at some point. Lastly, we expect that in the medium term, real wages will rise. The resulting expansion of China's domestic market would create new export opportunities for Western firms.

Suggested Citation

  • Philipp Maier, 2006. "China in 2006: An economist's view," DNB Occasional Studies 405, Netherlands Central Bank, Research Department.
  • Handle: RePEc:dnb:dnbocs:405

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Alicia García-Herrero & Sergio Gavilá & Daniel Santabárbara, 2006. "China's Banking Reform: An Assessment of its Evolution and Possible Impact," CESifo Economic Studies, CESifo, vol. 52(2), pages 304-363, June.
    2. Dani Rodrik, 2006. "What's So Special about China's Exports?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 14(5), pages 1-19.
    3. Chow, Gregory & Lin, An-loh, 2002. "Accounting for Economic Growth in Taiwan and Mainland China: A Comparative Analysis," Journal of Comparative Economics, Elsevier, vol. 30(3), pages 507-530, September.
    4. Barry Eichengreen, 2010. "Global Imbalances and the Lessons of Bretton Woods," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262514141, January.
    5. Wang, Yan & Yao, Yudong, 2003. "Sources of China's economic growth 1952-1999: incorporating human capital accumulation," China Economic Review, Elsevier, vol. 14(1), pages 32-52.
    6. Richard B. Freeman, 1995. "Are Your Wages Set in Beijing?," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 15-32, Summer.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Wim Suyker & Henri de Groot, 2006. "China and the Dutch economy," CPB Document 127, CPB Netherlands Bureau for Economic Policy Analysis.

    More about this item


    China; economic transition;

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • F01 - International Economics - - General - - - Global Outlook


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dnb:dnbocs:405. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Rob Vet). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.