Chinese Political and Economic Governance System and the Imbalance between Consumption and Investment
The Chinese government has been pursuing economic growth under the guidance of "growth is a hard principle". In the context of the Chinese political and economic governance system, local governments have employed the overtaking strategy (placing primary emphasis on the development of capital and technology-intensive industries) and the real estate development strategy to push for economic growth and fiscal revenue growth. This has led to a repressed labor share and an elevated capital and government share in primary and secondary income distribution structure. Using the empirical strategy of Acemoglu et al. (2003), we confirm that the development strategies have shaped an imbalanced consumption-investment structure through primary and secondary income distribution as well as other channels. It suggests that the Chinese government will be able to accomplish China's transition from an investment-led growth model to a consumption-based growth model only if it modifies its political and economic governance system and removes the distortions in development strategies.
|Date of creation:||Nov 2013|
|Date of revision:|
|Contact details of provider:|| Postal: 55th Floor , Two International Finance Centre , 8 Finance Street , Central, Hong Kong|
Phone: (852)2878 1978
Fax: (852)2878 7006
Web page: http://www.hkimr.org
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ye Chen & Hongbin Li & Li-An Zhou, 2005.
"Relative Performance Evaluation and the Turnover of Provincial Leaders in China,"
00010, Chinese University of Hong Kong, Department of Economics.
- Chen, Ye & Li, Hongbin & Zhou, Li-An, 2005. "Relative performance evaluation and the turnover of provincial leaders in China," Economics Letters, Elsevier, vol. 88(3), pages 421-425, September.
- Lin,Justin Yifu, 2009.
"Economic Development and Transition,"
Cambridge University Press, number 9780521735513, November.
- Bai, Chong-En & Du, Yingjuan & Tao, Zhigang & Tong, Sarah Y., 2004.
"Local protectionism and regional specialization: evidence from China's industries,"
Journal of International Economics,
Elsevier, vol. 63(2), pages 397-417, July.
- Chong-En Bai & Yingjuan Du & Zhigang Tao & Sarah Y. Tong, 2003. "Local Protectionism and Regional Specialization: Evidence from China’s Industries," William Davidson Institute Working Papers Series 2003-565, William Davidson Institute at the University of Michigan.
- Daron Acemoglu & Simon Johnson & James Robinson & Yunyong Thaicharoen, 2002.
"Institutional Causes, Macroeconomic Symptoms: Volatility, Crises and Growth,"
NBER Working Papers
9124, National Bureau of Economic Research, Inc.
- Acemoglu, Daron & Johnson, Simon & Robinson, James & Thaicharoen, Yunyong, 2003. "Institutional causes, macroeconomic symptoms: volatility, crises and growth," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 49-123, January.
- Acemoglu, Daron & Johnson, Simon & Robinson, James A & Thaicharoen, Yunyong, 2002. "Institutional Causes, Macroeconomic Symptoms: Volatility, Crises and Growth," CEPR Discussion Papers 3575, C.E.P.R. Discussion Papers.
- Chenggang Xu, 2011. "The Fundamental Institutions of China's Reforms and Development," Journal of Economic Literature, American Economic Association, vol. 49(4), pages 1076-1151, December.
- Li, Hongbin & Zhou, Li-An, 2005. "Political turnover and economic performance: the incentive role of personnel control in China," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1743-1762, September.
- C. Fred Bergsten & Charles Freeman & Nicholas R. Lardy, 2009.
"China's Rise: Challenges and Opportunities,"
Peterson Institute Press: All Books,
Peterson Institute for International Economics, number 4341.
- Fubing Su & Ran Tao & Lu Xi & Ming Li, 2012. "Local Officials' Incentives and China's Economic Growth: Tournament Thesis Reexamined and Alternative Explanatory Framework," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 20(4), pages 1-18, 07.
- John C. Driscoll & Aart C. Kraay, 1998. "Consistent Covariance Matrix Estimation With Spatially Dependent Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 549-560, November.
- Yiping HUANG, 2010.
"Dissecting the China Puzzle: Asymmetric Liberalization and Cost Distortion,"
Asian Economic Policy Review,
Japan Center for Economic Research, vol. 5(2), pages 281-295, December.
- Huang Yiping, 2010. "Dissecting the China Puzzle : Asymmetric Liberalization and Cost Distortion," Macroeconomics Working Papers 22874, East Asian Bureau of Economic Research.
- Rodrik, Dani, 2010.
"Making Room for China in the World Economy,"
5341587, Harvard Kennedy School of Government.
- Jahangir Aziz & Li Cui, 2007. "Explaining Chinaâ€™s Low Consumption; The Neglected Role of Household Income," IMF Working Papers 07/181, International Monetary Fund.
- Dorothee Schneider, 2011. "The Labor Share: A Review of Theory and Evidence," SFB 649 Discussion Papers SFB649DP2011-069, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
- Dennis Tao Yang, 2012.
"Aggregate Savings and External Imbalances in China,"
Journal of Economic Perspectives,
American Economic Association, vol. 26(4), pages 125-46, Fall.
- Yang, Dennis T., 2012. "Aggregate Savings and External Imbalances in China," IZA Discussion Papers 6964, Institute for the Study of Labor (IZA).
When requesting a correction, please mention this item's handle: RePEc:hkm:wpaper:232013. 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: (HKIMR)
If references are entirely missing, you can add them using this form.