China's Economic Growth and Convergence

54 Pages Posted: 29 May 2016

Date Written: May 26, 2016

Abstract

This study explores China’s economic growth performance and prospects in global and Asian comparative perspectives. Using a general framework of cross-country analysis, the study identifies and discusses major factors underlying China’s strong growth over the past decades and those contributing to its recent growth slowdown. The study also adopts detailed industry-level data to assess structural changes and sectoral growth in the Chinese economy. China’s low initial per capita income relative to its own long-run potential provided the opportunity for faster capital accumulation and technology diffusion. Good policy and institution factors, such as a high investment rate, strong human capital, high trade openness, and improved institutions, guided the economy to realize its strong potential for convergence to advanced economy income level. China’s average potential GDP growth will decline significantly over the coming decade due to convergence effect and structural problems, unless China substantially upgrades institutions and policy factors and improves productivity, particularly in its services sector.

Keywords: Economic growth, convergence, productivity, structural change, China

JEL Classification: O11, O14, O19, O47, O53, O57

Suggested Citation

Lee, Jong-Wha, China's Economic Growth and Convergence (May 26, 2016). CAMA Working Paper No. 30/2016 . Available at SSRN: https://ssrn.com/abstract=2785015 or http://dx.doi.org/10.2139/ssrn.2785015

Jong-Wha Lee (Contact Author)

Korea University ( email )

Anam-dong, Sungbuk-Ku
Dept. of Economics
Seoul, 136-701
82-2-3290-2216 (Phone)
82-2-928-4948 (Fax)

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