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The Chinese Economy: Transitions and Growth by Barry Naughton

The Chinese Economy: Transitions and Growth Barry Naughton ebook
Format: pdf
ISBN: 0262140950, 9781429455343
Publisher:
Page: 504

Economic growth hopefully will bring more freedom to China's people. Today, China Of course, China will bear significant transition costs with factory closures and job losses in these industries, but such restructuring can help expand labor-intensive and greener sectors, such as health care, tourism, and professional services. A slight acceleration in Chinese economic growth at the end of last year is reinforcing the common narrative that China's expansion is a threat to other nations, including the United States. First, a structural slowdown of growth looks clearly to be in the cards. China also needs to shift its economy away from energy-intensive sectors, like the country's fast-growing, mammoth steel industry, and toward more energy-efficient, high-tech, and service industries. Amidst increased domestic concern over inequality and corruption, GFI's study raises serious questions about the stability of the Chinese economy merely two weeks before the once-in-a-decade leadership transition. When I chat with people about China's economic growth, I often hear a story that goes like this: The main driver's behind China's growth is that it uses a combination of cheap labor and an undervalued exchange rate to create huge trade surpluses. The volume of trade misinvoicing between mainland China and the United States rose to US$72.0 billion before the financial crisis of 2008, but has declined since then, probably as a result of lower growth in bilateral trade between the countries. Philip highlights three mutually reinforcing paths of transformation ahead in the Chinese economy. I think of China's growth model as merely a more muscular version of the Japanese or East Asian growth model, which is itself partly based on the American experience. At a minimum it'll allow more of its citizens to buy widgets that help them get around the Great Firewall. Transition towards China's growth model being driven by consumer spending will give rise to much greater volatility when it comes to managing the economy and bring about a step-change down in the rates of GDP growth.