Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/154595
Authors: 
Dorrucci, Ettore
Pula, Gabor
Santabárbara, Daniel
Year of Publication: 
2013
Series/Report no.: 
ECB Occasional Paper 142
Abstract: 
In this paper we provide an overview of the growth model in China and its prospects, taking a medium-run to long-run perspective. Our main conclusions are as follows. First, the still prevailing producer-biased model of managed capitalism in China tends to engender, as an inherent byproduct, serious imbalances which cannot be unwound without a fundamental overhaul of the model itself. Second, given the lack of a critical mass of economic reforms thus far, imbalances may (re-)escalate once global and domestic economic conditions normalise. Third, the fundamental factors underpinning growth in China are likely to remain supportive, at least over the medium run. Although this could help mitigate the economic costs of imbalances for some time to come, it could also reduce the incentives for policy-makers to enact much needed reforms. Fourth, delayed policy action and the persistence of the model of growth cum imbalances would increase the risk of China getting caught in the middle-income trap in the long run. Greater political will to redirect China’s growth model towards a more sustainable path is therefore needed.
Subjects: 
China
Economic Growth
imbalances
middle-income trap
rebalancing
JEL: 
C22
C51
C53
C59
Document Type: 
Research Report

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