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China's economic growth and convergence

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  • Jong-Wha Lee

Abstract

This study explores China's economic growth performance and prospects in global and Asian comparative perspectives. Using a general framework of cross-country analysis, the study identifies and discusses major factors underlying China's strong growth over the past decades and those contributing to its recent growth slowdown. The study also adopts detailed industry-level data to assess structural changes and sectoral growth in the Chinese economy. China's low initial per capita income relative to its own long-run potential provided the opportunity for faster capital accumulation and technology diffusion. Good policy and institution factors, such as a high investment rate, strong human capital, high trade openness, and improved institutions, guided the economy to realize its strong potential for convergence to advanced economy income level. China's average potential GDP growth will decline significantly over the coming decade due to convergence effect and structural problems, unless China substantially upgrades institutions and policy factors and improves productivity, particularly in its services sector.

Suggested Citation

  • Jong-Wha Lee, 2016. "China's economic growth and convergence," CAMA Working Papers 2016-30, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  • Handle: RePEc:een:camaaa:2016-30
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    Cited by:

    1. Lee, Jong-Wha & McKibbin, Warwick J., 2018. "Service sector productivity and economic growth in Asia," Economic Modelling, Elsevier, vol. 74(C), pages 247-263.

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    More about this item

    Keywords

    Economic growth; convergence; productivity; structural change; China;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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