China’s Slowdown
This paper evaluates explanations for China’s growth slowdown. The natural tendency for rapidly growing economies to slow down is a major factor, along with problems bequeathed by unbalanced growth, including a declining ICOR, slowing total factor productivity growth, and rising indebtedness. A numb...
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| Format: | Article |
| Language: | English |
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Korea Development Institute
2024-02-01
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| Series: | KDI Journal of Economic Policy |
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| Online Access: | https://kdijep.org/v.46/1/1/China%E2%80%99s+Slowdown |
| Summary: | This paper evaluates explanations for China’s growth slowdown. The natural tendency for rapidly growing economies to slow down is a major factor, along with problems bequeathed by unbalanced growth, including a declining ICOR, slowing total factor productivity growth, and rising indebtedness. A number of other mechanisms are of lesser importance: demographics, President Xi’s centralization of political power and anti-corruption campaign, and U.S. export controls. Sustaining growth in the longer term will require China to step away from investment, debt and export-fueled growth in favor of a balanced growth model with household consumption playing a larger role. Doing so will require hardening of the budget constraints of regional and local governments and restructuring of the nonperforming debts of property and construction companies. |
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| ISSN: | 2586-2995 2586-4130 |