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Enhancing China's Medium-Term Growth Prospects: The Path to a High-Income Economy

21 Pages Posted: 28 Oct 2013  

Malhar Nabar

International Monetary Fund (IMF)

Papa N'Diaye

International Monetary Fund (IMF) - Asia and Pacific Department

Date Written: October 2013

Abstract

China’s current growth model — which has delivered steady and robust growth for two decades and lifted some 500 million individuals out of poverty — has become too reliant on credit and investment, and has begun to experience diminishing returns. Delays in advancing the government’s reform agenda will mean that vulnerabilities continue to grow and the probability of stalled convergence increases. On the other hand, with reforms to accelerate TFP growth and shift the economy away from its continued reliance on capital accumulation, China can grow at a healthy pace and maintain its convergence toward the level of high income economies. Evidence from China’s provinces indicates that there is room to improve productivity and sustain such a convergence toward the level of more prosperous economies.

Keywords: Economic growth, China, Productivity, Capital accumulation, convergence

JEL Classification: E22, O11, O53

Suggested Citation

Nabar, Malhar and N'Diaye, Papa, Enhancing China's Medium-Term Growth Prospects: The Path to a High-Income Economy (October 2013). IMF Working Paper No. 13/204. Available at SSRN: https://ssrn.com/abstract=2346254

Malhar Nabar

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Papa N'Diaye

International Monetary Fund (IMF) - Asia and Pacific Department ( email )

700 19th Street NW
Washington, DC 20431
United States

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