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...

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Bibliographic Details
Published inKDI Journal of Economic Policy Vol. 46; no. 1; pp. 1 - 19
Main Author Eichengreen, Barry
Format Journal Article
LanguageEnglish
Published Sejong Korea Development Institute (KDI) 01.02.2024
Korea Development Institute
한국개발연구원
Subjects
China
Debt
Economic Growth
Growth Slowdowns
경제학
Debt
Growth Slowdowns
China
Economic Growth
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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.
Bibliography:KISTI1.1003/JNL.JAKO202410358009695
ISSN:2586-4130
2586-2995
2586-4130
DOI:10.23895/kdijep.2024.46.1.1