Sustaining Growth of the People's Republic of China

Asian Development Review 32:1, 2015

18 Pages Posted: 9 Apr 2016

See all articles by Justin Y. Lin

Justin Y. Lin

Peking University - China Center for Economic Research

Fan Zhang

Peking University

Date Written: April 13, 2015

Abstract

This paper reviews economic growth theory in the framework of economic development and explores the possibility of sustained growth in the People’s Republic of China (PRC) in the long run. We argue that the PRC has the potential to sustain relatively high growth rates. First, since the technological gap with major developed countries still exists, the PRC can continue to enjoy its “advantage of backwardness” in the near future. Second, large-scale infrastructure investment, which began several decades ago, may possibly extend to the future and provide the country a basis for further growth. Third, structural readjustment, which is needed in many areas, should similarly be able to support the Chinese economy. This paper argues that to sustain long-term growth in the PRC, a number of general preconditions need to be fulfilled — these include well-functioning markets, a minimum amount of investment, continued structural upgrading, and effective government.

Keywords: GDP growth rate, technological innovation, infrastructure investment, structural adjustment

JEL Classification: E6, O43, O47

Suggested Citation

Lin, Justin Yifu and Zhang, Fan, Sustaining Growth of the People's Republic of China (April 13, 2015). Asian Development Review 32:1, 2015, Available at SSRN: https://ssrn.com/abstract=2759535

Justin Yifu Lin (Contact Author)

Peking University - China Center for Economic Research ( email )

No. 38 Xueyuan Road
Haidian District
Beijing, Beijing 100871
China

Fan Zhang

Peking University ( email )

No. 38 Xueyuan Road
Haidian District
Beijing, Beijing 100871
China

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