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Domestic savings-driven growth: unveiling internal economic dynamics in China, 1980-2010

Author

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  • Deng, Kent
  • Du, Jane

Abstract

It has been commonly believed that economic reforms in the post-Mao Era since 1980 have changed China from autarky to an export-oriented developmental path, accompanied by inward and cheap FDI with advanced foreign technology. This paper challenges this view with quantitative evidence and shows that China’s recent growth has depended heavily on a domestic source of capital coming from newly available household sayings, stemming from (1) state mandatory price control over food as a wage good on the one hand and (2) a fast-growing wage level due to arising labour productivity on the other.

Suggested Citation

  • Deng, Kent & Du, Jane, 2024. "Domestic savings-driven growth: unveiling internal economic dynamics in China, 1980-2010," Economic History Working Papers 122355, London School of Economics and Political Science, Department of Economic History.
    • Handle: RePEc:ehl:wpaper:122355
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    More about this item

    Keywords

    developmental state; gradualism; saving-led growth; price overshoot; wage goods; economic transition;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • P21 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Planning, Coordination, and Reform
    • P51 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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