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Is the Chinese Investment- and Export-Led Growth Model Sustainable? Some Rising Concerns

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  • Arslan Razmi

    () (University of Massachusetts Amherst)

Abstract

China’s rapid growth and success in poverty reduction over the last three decades has inspired world-wide admiration. This paper uses a simple framework with a Kaleckian flavor to analyze structural developments in the Chinese economy, and to understand some of the distributional consequences. Some of the possible sources of these distributional developments are then further analyzed using a trade-theoretic approach. Other aspects of China’s investment- and export-led growth strategy are discussed along with the problems that the focused pursuit of such a strategy has raised. We conclude that China’s growth model may now have outlived its utility, both on economic and socio-political grounds. JEL Categories:

Suggested Citation

  • Arslan Razmi, 2008. "Is the Chinese Investment- and Export-Led Growth Model Sustainable? Some Rising Concerns," UMASS Amherst Economics Working Papers 2008-09, University of Massachusetts Amherst, Department of Economics.
  • Handle: RePEc:ums:papers:2008-09
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    References listed on IDEAS

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    6. Ouyang, Alice Y. & Rajan, Ramkishen S. & Willett, Thomas D., 2010. "China as a reserve sink: The evidence from offset and sterilization coefficients," Journal of International Money and Finance, Elsevier, vol. 29(5), pages 951-972, September.
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    8. Ximing Wu & Jeffrey M. Perloff, 2005. "China's Income Distribution, 1985-2001," The Review of Economics and Statistics, MIT Press, pages 763-775.
    9. Jahangir Aziz & Li Cui, 2007. "Explaining China’s Low Consumption; The Neglected Role of Household Income," IMF Working Papers 07/181, International Monetary Fund.
    10. Ravallion, Martin & Chen, Shaohua, 2007. "China's (uneven) progress against poverty," Journal of Development Economics, Elsevier, pages 1-42.
    11. Robert Feenstra & Gordon Hanson, 2001. "Global Production Sharing and Rising Inequality: A Survey of Trade and Wages," NBER Working Papers 8372, National Bureau of Economic Research, Inc.
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    13. Nouriel Roubini, 2007. "Why China Should Abandon Its Dollar Peg," International Finance, Wiley Blackwell, vol. 10(1), pages 71-89, March.
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