China's Approach to Rebalancing: A Conceptual and Policy Framework

26 Pages Posted: 29 Feb 2012

See all articles by Luke Deer

Luke Deer

University of Sydney

Ligang Song

Australian National University (ANU) - Crawford School of Public Policy

Date Written: January‐February 2012

Abstract

This article seeks to develop a conceptual and policy framework for understanding China's role in the global economic imbalances. China's contribution to these imbalances via recurrent trade and financial surpluses corresponds with a phase of deepening structural risks to China's economic growth and development. These structural challenges include: the composition of growth resulting from China's dynamic internal transformation, China's trade orientation, the trajectory of resource use and CO emissions, welfare problems relating to distribution and international constraints. This article develops a conceptual framework for examining the relationship between the processes of long‐run structural transformation in China, its economic imbalances, and the role of institutional reform in dealing with these structural challenges. As such, economic policy should extend beyond short‐term macro management to pursue an institutional reform agenda to facilitate broader structural change to mitigate constraints to future growth and to improve economic welfare.

Keywords: China, economic imbalances, economic policy, institutional reform, structural change

JEL Classification: E21, E61, F32, F43, O43

Suggested Citation

Deer, Luke and Song, Ligang, China's Approach to Rebalancing: A Conceptual and Policy Framework (January‐February 2012). China & World Economy, Vol. 20, Issue 1, pp. 1-26, 2012, Available at SSRN: https://ssrn.com/abstract=2013002 or http://dx.doi.org/10.1111/j.1749-124X.2012.01270.x

Luke Deer (Contact Author)

University of Sydney ( email )

Level 3, Social Sciences Building
Sydney, NSW 2006
Australia

Ligang Song

Australian National University (ANU) - Crawford School of Public Policy ( email )

Crawford Building
J.G. Crawford Building, #132, Lennox Crossing
Canberra, Australian Capital Territory 0200
Australia

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