The Chinese Economy: Transitions and Growth

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Basic Facts: Growth!!! since 1980s, most rapidly growing economy on earth- 10% avg growth rate from 78-05 most populous country in world- 1.3bil people in 2004 (despite declining birthrate) 4th largest economy- GDP = US$2.225 tril in 2005 3rd largest trading nation (after US and Germany) in 2004 But. ...still struggling moved from “lower income” to “lower middle income” in 1990s GDP size of GDP even though it has 4x pop 2005- China per capita GDP= 1700, US= 40,000 vast regional disparities in economic prosperity and technology Why? Because China is attempting to emerge from 2 transitions = economic development 1. bureaucratic socialism → market economy 2. industrialization: rural → urban society Why China’s growth over past 25 years has been extraordinary- structural, transitional, and traditional Structural invests high proportion of national income
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Unformatted text preview: healthy share of income devoted to crucial physical infrastructure w/public-good properties ● larger investments in human capital ● inputs of physical capital, labor, and human capital are all increasing Transition- som to market ● opening of markets associated with growth acceleration ● steady expansion - as opposed to immediate/rapid changes so that govt institutions can keep up at the same time overlap btwn structural and transitional-investment rate is high bc domestic saving rate is high → domestic saving rate is high bc chinese households/firms experienced macroecon stability and growth in wake of successful economic reform Traditional- revival of traditional economic relationships ● underlying comercialized and entrepreneurial society that existed centuries ago in great asian dynasties has sprung back to life...
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This document was uploaded on 02/15/2012.

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