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Chinese Economic Growth: Sources And Prospects

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  • Wing Thye Woo

Abstract

China's impressive growth is rooted in the liberalization of a surplus labor economy that has a high saving rate. The reallocation of surplus agriculture labor to industry and service sectors generates a growth effect that shows up in total factor productivity (TFP) growth. Net TFP, the resulting residual, contains the true measure of technological progress (among other effects). Taking account of mismeasurement problems, especially of value added in the industry sector, I calculated a plausible range of estimates for each source of growth. My point estimates for each of their contribution to the average annual 9.3 percent growth rate in the 1979-93 period growth rate in the 1985-93 subperiod are, respectively: 1979-93 1985-93 4.9 5.5 percentage points from capital accumulation 1.3 1.1 percentage points from labor force expansion. 1.1 1.3 percentage points from reallocation of labor from agriculture 0.2 0.3 percentage points from inconsistent use of base prices, 0.5Ð0.7 0.9Ð1.2 percentage points from overstatement of industrial growth, 1.1-1.3 0.3Ð0.6 percentage points from net TFP growth.

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  • Wing Thye Woo, "undated". "Chinese Economic Growth: Sources And Prospects," Department of Economics 96-08, California Davis - Department of Economics.
    • Handle: RePEc:fth:caldec:96-08
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    Cited by:

    1. Sylvie Démurger & Jeffrey D. Sachs & Wing Thye Woo & Shuming Bao & Gene Chang & Andrew Mellinger, 2002. "Geography, Economic Policy, and Regional Development in China," Asian Economic Papers, MIT Press, vol. 1(1), pages 146-197.
    2. Thomas Piketty & Li Yang & Gabriel Zucman, 2019. "Capital Accumulation, Private Property, and Rising Inequality in China, 1978–2015," American Economic Review, American Economic Association, vol. 109(7), pages 2469-2496, July.
    3. Warwick J. McKibbin & Wing Thye Woo, 2003. "The Consequences of China's WTO Accession for Its Neighbors," Asian Economic Papers, MIT Press, vol. 2(2), pages 1-38.
    4. Thomas Piketty & Li Yang & Gabriel Zucman, 2017. "Appendix to "Capital Accumulation, Private Property and Rising Inequality in China, 1978-2015"," PSE Working Papers halshs-02659212, HAL.
    5. Barry Bosworth & Susan M. Collins, 2008. "Accounting for Growth: Comparing China and India," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 45-66, Winter.
    6. Harry X. Wu, 2006. "The Chinese GDP Growth Rate Puzzle: How Fast Has the Chinese Economy Grown?," Hi-Stat Discussion Paper Series d06-176, Institute of Economic Research, Hitotsubashi University.
    7. Jeffrey D. Sachs & Wing Thye Woo, "undated". "Understanding China'S Economic Performance," Department of Economics 97-04, California Davis - Department of Economics.
    8. Dollar, David & Kraay, Aart, 2006. "Neither a borrower nor a lender: Does China's zero net foreign asset position make economic sense?," Journal of Monetary Economics, Elsevier, vol. 53(5), pages 943-971, July.
    9. Xiang Ao & Lilyan E. Fulginiti, 2005. "Productivity Growth in China: Evidence from Chinese Provinces," Development and Comp Systems 0502024, University Library of Munich, Germany.
    10. Wing Thye Woo, 2003. "Recent Claims of China's Economic Exceptionalism: Reflections Inspired by WTO Accession," Working Papers 13, University of California, Davis, Department of Economics.
    11. Bloom, David E. & Canning, David & Hu, Linlin & Liu, Yuanli & Mahal, Ajay & Yip, Winnie, 2010. "The contribution of population health and demographic change to economic growth in China and India," Journal of Comparative Economics, Elsevier, vol. 38(1), pages 17-33, March.
    12. Richard G. Harris & Peter E. Robertson & Jessica Y. Xu, 2011. "The International Effects of China’s Growth, Trade and Education Booms," The World Economy, Wiley Blackwell, vol. 34(10), pages 1703-1725, October.
    13. Wong Hock Tsen, 2006. "Granger causality tests among openness to international trade, human capital accumulation and economic growth in China: 1952-1999," International Economic Journal, Taylor & Francis Journals, vol. 20(3), pages 285-302.
    14. Meng, Xin & Zhang, Dandan, 2010. "Labour Market Impact of Large Scale Internal Migration on Chinese Urban 'Native' Workers," IZA Discussion Papers 5288, Institute of Labor Economics (IZA).

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