Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/167482
Authors: 
Holz, Carsten A.
Year of Publication: 
2017
Series/Report no.: 
CESifo Working Paper 6496
Abstract: 
For the past nearly forty years, China has experienced average annual real GDP growth of close to ten percent, much of it driven by investment and capital accumulation. By 2014, gross capital formation had reached 46 percent of aggregate expenditures. This paper documents the role of investment in driving economic growth in China, questions how much longer China can sustain a relatively high investment rate, and examines the arguments that have been offered for an impending drastic reduction in investment. It also notes that investment in China remains broad-based across all economic sectors, with little specialization; the size of the Chinese economy may allow continued comprehensive development across all economic sectors. At the same time, the relative size of foreign investment in China has become negligible and the China growth story thus has become a domestic one.
Subjects: 
investment rate
capital-output ratio
ICOR
national investment strategy
economic growth
JEL: 
E01
E22
E60
O11
O53
Document Type: 
Working Paper

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