China S Productivity Convergence And Growth Potential A Stocktaking And Sectoral Approach

China’s growth potential has become a hotly debated topic as the economy has reached an income level susceptible to the “middle-income trap” and financial vulnerabilities are mounting after years of rapid credit expansion. However, the existing literature has largely focused on macro level aggregates, which are ill suited to understanding China’s significant structural transformation and its impact on economic growth. To fill the gap, this paper takes a deep dive into China’s convergence progress in 38 industrial sectors and 11 services sectors, examines past sectoral transitions, and predicts future shifts. We find that China’s productivity convergence remains at an early stage, with the industrial sector more advanced than services. Large variations exist among subsectors, with high-tech industrial sectors, in particular the ICT sector, lagging low-tech sectors. Going forward, ample room remains for further convergence, but the shrinking distance to the frontier, the structural shift from industry to services, and demographic changes will put sustained downward pressure on growth, which could slow to 5 percent by 2025 and 4 percent by 2030. Digitalization, SOE reform, and services sector opening up could be three major forces boosting future growth, while the risks of a financial crisis and a reversal in global integration in trade and technology could slow the pace of convergence.

"China’s growth potential has become a hotly debated topic as the economy has reached an income level susceptible to the “middle-income trap” and financial vulnerabilities are mounting after years of rapid credit expansion. However, the existing literature has largely focused on macro level aggregates, which are ill suited to understanding China’s significant structural transformation and its impact on economic growth. To fill the gap, this paper takes a deep dive into China’s convergence progress in 38 industrial sectors and 11 services sectors, examines past sectoral transitions, and predicts future shifts. The authors find that China’s productivity convergence remains at an early stage, with the industrial sector more advanced than services. Large variations exist among subsectors, with high-tech industrial sectors, in particular the ICT sector, lagging low-tech sectors. Going forward, ample room remains for further convergence, but the shrinking distance to the frontier, the structural shift from industry to services, and demographic changes will put sustained downward pressure on growth, which could slow to 5 percent by 2025 and 4 percent by 2030. Digitalization, SOE reform, and services sector opening up could be three major forces boosting future growth, while the risks of a financial crisis and a reversal in global integration in trade and technology could slow the pace of convergence."--Abstract.

China’s growth potential has become a hotly debated topic as the economy has reached an income level susceptible to the “middle-income trap” and financial vulnerabilities are mounting after years of rapid credit expansion. However, the existing literature has largely focused on macro level aggregates, which are ill suited to understanding China’s significant structural transformation and its impact on economic growth. To fill the gap, this paper takes a deep dive into China’s convergence progress in 38 industrial sectors and 11 services sectors, examines past sectoral transitions, and predicts future shifts. We find that China’s productivity convergence remains at an early stage, with the industrial sector more advanced than services. Large variations exist among subsectors, with high-tech industrial sectors, in particular the ICT sector, lagging low-tech sectors. Going forward, ample room remains for further convergence, but the shrinking distance to the frontier, the structural shift from industry to services, and demographic changes will put sustained downward pressure on growth, which could slow to 5 percent by 2025 and 4 percent by 2030. Digitalization, SOE reform, and services sector opening up could be three major forces boosting future growth, while the risks of a financial crisis and a reversal in global integration in trade and technology could slow the pace of convergence.

After impressive growth of about 10% per annum for three decades, China's visible signs of economic slowdown since 2008 have been subject to much contention. What causes the deceleration? What should we expect in an era of China's 6% growth? This book answers these questions in three parts. Although it is widely accepted that China can hardly continue its high-speed growth model, estimations for its future growth potential differ greatly. The first part of this book predicts China's growth to 2050, which considers both cross-country historical experiences and China's own demographic structure and employment participation features. In the second part, the book offers a comprehensive estimation of China's national and provincial total factor productivity (TFP) over the period of 1978 to 2014 based on comparable data. It then analyzes the causes of China's economic slowdown from a productivity point of view. Finally, this book correspondingly outlines policy recommendations, including supply-side structural reform and macroeconomic policy frameworks, to effectively address the issue of decline in both labor and labor productivity growth. This book will attract scholars and students of economics and China's economic studies.

China’s recovery is well advanced—but it lacks balance and momentum has slowed, reflecting the rapid withdrawal of fiscal support, lagging consumption amid recurrent COVID-19 outbreaks despite a successful vaccination campaign, and slowing real estate investment following policy efforts to reduce leverage in the property sector. Regulatory measures targeting the technology sector, intended to enhance competition, consumer privacy, and data governance, have increased policy uncertainty. China’s climate strategy has begun to take shape with the release of detailed action plans. Productivity growth is declining as decoupling pressures are increasing, while a stalling of key structural reforms and rebalancing are delaying the transition to “high-quality”—balanced, inclusive and green—growth.

In eleven chapters this book addresses the issue of the re-emergence of China and a new global order on the world stage, with implications for the existing US hegemonic liberal international order. The Re-Emergence of China reviews the history of China's astounding economic growth and geopolitical development over the past 30 years. It explores the economic, technological, and global development of China during this period; explores the political philosophy and praxis from imperial neo-Confucian times to the present socialist regime; the cultural and social development of China and the role of the Chinese diaspora; and examines the prospects for a new international order with a major role for China.This book will fit comfortably into the required reading schedule for graduate class modules in Chinese and East Asian studies, political theory, economic development, and contemporary political history. Of particular interest will be the exploration of the role of the Chinese diaspora in modern China's development. The authors' focus on the contemporary conflict between the US and China will also be of wider interest to political commentators as well as academic researchers in Chinese studies.The Re-Emergence of China can provide a guiding narrative for academics, researchers, policymakers, industry leaders and many other relevant professionals on how global society can be reshaped in the wake of China's re-emergence in the new global era. By focusing on China's integration with the economic and political world order, in terms of both its advances and setbacks, in addition to the historical contexts, readers can navigate the book's succinct coverage and conclusions on the development of a China polity which has become increasingly connected to the world in some ways, yet more disconnected in others.Related Link(s)

People’s Republic of China: Selected Issues