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Why China is Likely to Achieve its Growth Objectives

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  • Robert W. Fogel

Abstract

In 2002, the Chinese Communist Party announced a goal of quadrupling per capita income by the year 2020. Starting at income levels of the year 2000, this would require a growth rate of 7.2 percent per annum in per capita income or close to 8.0 percent in GDP. Such unresolved and emerging problems as growing income disparities, increasing pollution, pressures on infrastructure, the inefficiency of state owned enterprises, and political instability are often cited as reasons to doubt the attainability of the CCP%u2019s goal. However, China%u2019s progress in addressing fundamental constraints that might limit rapid economic growth augurs well for the success of its economic goals. Although there are disagreements about economic policy among top leaders, the continued transformation into a market economy and the promotion of increasing local autonomy in economic matters are not in doubt. In education, China has substantially increased the percentage of its workforce receiving a college education, and continuing growth in this investment in human capital could account for a large portion of the desired growth rate. In addition, the value of improvements in the quality of economic output unmeasured by GDP, such as advances in the quality of health care and education, could raise reported growth rates by as much as 60 percent. Finally, the government%u2019s increasing sensitivity to public opinion and issues of inequality and corruption, combined with improving living conditions, have resulted in a level of popular confidence in the government that makes political instability unlikely.

Suggested Citation

  • Robert W. Fogel, 2006. "Why China is Likely to Achieve its Growth Objectives," NBER Working Papers 12122, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:12122
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    References listed on IDEAS

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    1. Fogel, Robert William, 2000. "The Fourth Great Awakening and the Future of Egalitarianism," University of Chicago Press Economics Books, University of Chicago Press, number 9780226256627, September.
    2. Heckman, James J., 2005. "China's human capital investment," China Economic Review, Elsevier, vol. 16(1), pages 50-70.
    3. Alwyn Young, 2000. "Gold into Base Metals: Productivity Growth in the People's Republic of China during the Reform Period," NBER Working Papers 7856, National Bureau of Economic Research, Inc.
    4. Viscusi, W Kip & Aldy, Joseph E, 2003. "The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," Journal of Risk and Uncertainty, Springer, vol. 27(1), pages 5-76, August.
    5. Kevin J. Stiroh & Dale W. Jorgenson, 2000. "U.S. Economic Growth at the Industry Level," American Economic Review, American Economic Association, vol. 90(2), pages 161-167, May.
    6. Eswar S Prasad, 2004. "China's Growth and Integration into the World Economy; Prospects and Challenges," IMF Occasional Papers 232, International Monetary Fund.
    7. repec:reg:rpubli:282 is not listed on IDEAS
    8. Roy Bahl & Jorge Martinez-Vazquez, 2003. "Fiscal Federalism and Economic Reform in China," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0313, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    9. Robert W. Fogel, 2004. "High Performing Asian Economies," NBER Working Papers 10752, National Bureau of Economic Research, Inc.
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    Citations

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    Cited by:

    1. William T. Allen & Han Shen, 2011. "Assessing China's Top-Down Securities Markets," NBER Working Papers 16713, National Bureau of Economic Research, Inc.
    2. Robert W. Fogel, 2008. "The Impact of the Asian Miracle on the Theory of Economic Growth," NBER Chapters,in: Understanding Long-Run Economic Growth: Geography, Institutions, and the Knowledge Economy, pages 311-354 National Bureau of Economic Research, Inc.
    3. Rod Tyers & Ying Zhang, 2011. "Appreciating the Renminbi," The World Economy, Wiley Blackwell, vol. 34(2), pages 265-297, February.
    4. Rod Tyers & Ying Zhang, 2014. "Real exchange rate determination and the China puzzle," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, vol. 28(2), pages 1-32, November.
    5. William T. Allen & Han Shen, 2012. "Assessing China's Top-Down Securities Markets," NBER Chapters,in: Capitalizing China, pages 149-195 National Bureau of Economic Research, Inc.
    6. Declan Curran & Michael Funke & Jue Wang, 2007. "Economic Growth across Space and Time: subprovincial Evidence from Mainland China," Quantitative Macroeconomics Working Papers 20710, Hamburg University, Department of Economics.
    7. Yusuf, Shahid & Nabeshima, Kaoru & Wei Ha, 2007. "What makes cities healthy ?," Policy Research Working Paper Series 4107, The World Bank.
    8. Thammarak Moenjak & Kengjai Watjanapukka & Oramone Chantapant & Teeravit Pobsukhirun, 2010. "New Globalization: Risks and Opportunities for Thailand in the Next Decade," Working Papers 2010-04, Monetary Policy Group, Bank of Thailand.
    9. Shiyong Zhao, 2013. "Privatization, FDI inflow and economic growth: evidence from China's provinces, 1978--2008," Applied Economics, Taylor & Francis Journals, vol. 45(15), pages 2127-2139, May.
    10. Rod Tyers & Jane Golley, 2007. "China’s Real Exchange Rate," ANU Working Papers in Economics and Econometrics 2007-479, Australian National University, College of Business and Economics, School of Economics.

    More about this item

    JEL classification:

    • O0 - Economic Development, Innovation, Technological Change, and Growth - - General

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