IDEAS home Printed from https://ideas.repec.org/p/uwa/wpaper/19-07.html
   My bibliography  Save this paper

The effects of China’s growth slowdown on its provinces: Disentangling the sources

Author

Listed:
  • Anping Chen

    (School of Economics, Jinan University)

  • Nicolaas Groenewold

    (Economics Discipline, Business School, The University of Western Australia)

Abstract

Since 2007 China’s growth has fallen from around 10% to about 6-7% per annum. This paper investigates the experience of this slowdown at the provincial level. We use a vector-autoregressive modelling approach and annual data from 1978 to decompose each province’s growth into various factors. We find that (1) all provinces experienced the slowdown; (2) there is considerable variation in this experience across provinces; (3) national factors dominate the provincial slowdown while province-specific factors explain most of the interprovincial variation; (4) when the national factor is separated into supply and demand components, the supply component dominates.

Suggested Citation

  • Anping Chen & Nicolaas Groenewold, 2019. "The effects of China’s growth slowdown on its provinces: Disentangling the sources," Economics Discussion / Working Papers 19-07, The University of Western Australia, Department of Economics.
  • Handle: RePEc:uwa:wpaper:19-07
    Note: MD5 = f2d92e4c6b532729611effc750aa9e8e
    as

    Download full text from publisher

    File URL: http://ecompapers.biz.uwa.edu.au/paper/PDF%20of%20Discussion%20Papers/2019/DP%2019.07_Chen%20and%20Groenewold.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Blanchard, Olivier Jean & Quah, Danny, 1989. "The Dynamic Effects of Aggregate Demand and Supply Disturbances," American Economic Review, American Economic Association, vol. 79(4), pages 655-673, September.
    2. repec:taf:apeclt:v:25:y:2018:i:18:p:1327-1332 is not listed on IDEAS
    3. Lee, Jong-Wha & Hong, Kiseok, 2012. "Economic growth in Asia: Determinants and prospects," Japan and the World Economy, Elsevier, vol. 24(2), pages 101-113.
    4. Masagus M. Ridhwan & Henri L. F. Groot & Piet Rietveld & Peter Nijkamp, 2014. "The Regional Impact of Monetary Policy in Indonesia," Growth and Change, Wiley Blackwell, vol. 45(2), pages 240-262, June.
    5. Hongbin Li & Lei Li & Binzhen Wu & Yanyan Xiong, 2012. "The End of Cheap Chinese Labor," Journal of Economic Perspectives, American Economic Association, vol. 26(4), pages 57-74, Fall.
    6. Xin Meng, 2012. "Labor Market Outcomes and Reforms in China," Journal of Economic Perspectives, American Economic Association, vol. 26(4), pages 75-102, Fall.
    7. Walter Enders & Stan Hurn, 2007. "Identifying aggregate demand and supply shocks in a small open economy," Oxford Economic Papers, Oxford University Press, vol. 59(3), pages 411-429, July.
    8. Ivan Roberts & Cai Fang, 2015. "Potential Growth and Rebalancing in China," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 29-38, June.
    9. Owyang, Michael T. & Zubairy, Sarah, 2013. "Who benefits from increased government spending? A state-level analysis," Regional Science and Urban Economics, Elsevier, vol. 43(3), pages 445-464.
    10. Ding Lu, 2017. "China's Growth Slowdown and Prospects for Becoming a High-Income Developed Economy," Asian Economic Papers, MIT Press, vol. 16(1), pages 89-113, Winter/Sp.
    11. repec:bla:chinae:v:25:y:2017:i:6:p:65-83 is not listed on IDEAS
    12. Golley, Jane & Meng, Xin, 2011. "Has China run out of surplus labour?," China Economic Review, Elsevier, vol. 22(4), pages 555-572.
    13. Guanghua Wan & Peter J. Morgan & Harry X. Wu, 2016. "Sustainability of China's Growth Model: A Productivity Perspective," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 24(5), pages 42-70, September.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    China; growth; slowdown; provincial effects;

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • R50 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - General
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:uwa:wpaper:19-07. 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: (Sam Tang). General contact details of provider: http://edirc.repec.org/data/deuwaau.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.