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Looking Inward for Transformative Growth in China

  • Rod Tyers

Export led growth has been very effective in modernising China’s economy and establishing a large high-saving middle class. Notwithstanding political opposition from trading partners, this growth strategy has also offered the rest of the world improved terms of trade in both product and financial markets, in the form of cheaper light manufactures and cheaper credit. Yet slowing demand in export destinations has forced a transition to inward-sourced growth. This paper uses a numerical model of the Chinese economy with oligopoly behaviour to examine the available “inward” sources of transformative growth along with the policies needed to exploit them. The potential for considerable further “transformative” growth is shown to be considerable though it will require accelerated skilled labour supply growth and the politically difficult extension of industry policy reform to heavy manufacturing and services.

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Paper provided by Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University in its series CAMA Working Papers with number 2013-48.

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Length: 40 pages
Date of creation: Aug 2013
Date of revision:
Handle: RePEc:een:camaaa:2013-48
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