China's Pattern of Growth : Moving to Sustainability and Reducing Inequality
The authors study the sources and pattern of China's impressive economic growth over the past 25 years and show that key issues currently of concern to policymakers-widening inequality, rural poverty, and resource intensity-are to a large extent rooted in China's growth strategy, and resol...
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2005/11/6399387/chinas-pattern-growth-moving-sustainability-reducing-inequality http://hdl.handle.net/10986/8496 |
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okr-10986-84962021-04-23T14:02:43Z China's Pattern of Growth : Moving to Sustainability and Reducing Inequality Kuijs, Louis Wang, Tao AGRICULTURAL OUTPUT AGRICULTURE BANK LOANS CAPITA INCOME CAPITAL ACCUMULATION CAPITAL STOCK CAPITAL-LABOR CAPITAL-LABOR RATIO COUNTRY DATA DATA ISSUES DEPRECIATION DEVELOPMENT INDICATORS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC IMPLICATIONS ECONOMIC REFORM ECONOMIC REFORMS ECONOMIC RESEARCH ECONOMIC THEORY ELASTICITY EMPLOYEE EMPLOYMENT GROWTH EMPLOYMENT INCREASES EMPLOYMENT RATES EMPLOYMENT SHARE ENVIRONMENTAL DEGRADATION FACTOR ACCUMULATION GDP GDP PER CAPITA GROWTH ACCOUNTING GROWTH PATTERN GROWTH PERFORMANCE GROWTH RATE HUMAN CAPITAL INCOME DISTRIBUTION INCOME GROWTH INCOME INEQUALITY INCREASE IN CAPITAL INCREASE IN LABOR INDUSTRIAL SECTOR INDUSTRIALIZATION INEQUALITY CHANGE INTEREST RATE LABOR FLOW LABOR FORCE LABOR FORCE GROWTH LABOR MOBILITY LABOR MOVEMENTS LABOR PRODUCTIVITY LABOR PRODUCTIVITY GROWTH LABOR STATISTICS MARGINAL RETURN MARGINAL RETURN TO CAPITAL MARKET IMPERFECTIONS MEDIUM TERM MIGRATION NATURAL RESOURCES OUTPUT GROWTH OUTPUT RATIO PER CAPITA INCOME POLICY RESEARCH PRODUCTION FUNCTION PRODUCTIVE SECTOR PRODUCTIVITY GAP PRODUCTIVITY INCREASE PRODUCTIVITY INCREASES RAPID GROWTH REAL GDP REDUCING INEQUALITY RURAL AREAS RURAL LABOR RURAL POVERTY SERVICE SECTOR SURPLUS LABOR TFP TOTAL EMPLOYMENT TOTAL FACTOR PRODUCTIVITY UNEMPLOYMENT UNEMPLOYMENT RATE URBAN AREAS URBAN EMPLOYMENT VALUE ADDED WELFARE SYSTEM WORKER WORKERS The authors study the sources and pattern of China's impressive economic growth over the past 25 years and show that key issues currently of concern to policymakers-widening inequality, rural poverty, and resource intensity-are to a large extent rooted in China's growth strategy, and resolving them requires a rebalancing of policies. Using both macroeconomic level and sector data and analyses, the authors extend the growth accounting framework to decompose the sources of labor productivity growth. They find that growth of industrial production, led by a massive investment effort that boosted the capital/labor ratio, has been the single most important factor driving GDP and overall labor productivity growth since the early 1990s. The shift of labor from low-productivity agriculture has been limited, and, hence, contributed only marginally to overall labor productivity growth. The productivity gap between agriculture and the rest of the economy has continued to widen, leading to increased rural-urban income inequality. Looking ahead, the authors calibrate two alternative scenarios. They show that continuing with the current growth pattern would further increase already high investment and saving needs to unsustainable levels, lower urban employment growth, and widen the rural-urban income gap. Instead, reducing subsidies to industry and investment, encouraging the development of the services industry, and reducing barriers to labor mobility would result in a more balanced growth with an investment-to-GDP ratio that is consistent with the medium-term saving trend, faster growth in urban employment, and a substantial reduction in the income gap between rural and urban residents. 2012-06-19T21:54:08Z 2012-06-19T21:54:08Z 2005-11 http://documents.worldbank.org/curated/en/2005/11/6399387/chinas-pattern-growth-moving-sustainability-reducing-inequality http://hdl.handle.net/10986/8496 English Policy Research Working Paper; No. 3767 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research East Asia and Pacific China |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
AGRICULTURAL OUTPUT AGRICULTURE BANK LOANS CAPITA INCOME CAPITAL ACCUMULATION CAPITAL STOCK CAPITAL-LABOR CAPITAL-LABOR RATIO COUNTRY DATA DATA ISSUES DEPRECIATION DEVELOPMENT INDICATORS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC IMPLICATIONS ECONOMIC REFORM ECONOMIC REFORMS ECONOMIC RESEARCH ECONOMIC THEORY ELASTICITY EMPLOYEE EMPLOYMENT GROWTH EMPLOYMENT INCREASES EMPLOYMENT RATES EMPLOYMENT SHARE ENVIRONMENTAL DEGRADATION FACTOR ACCUMULATION GDP GDP PER CAPITA GROWTH ACCOUNTING GROWTH PATTERN GROWTH PERFORMANCE GROWTH RATE HUMAN CAPITAL INCOME DISTRIBUTION INCOME GROWTH INCOME INEQUALITY INCREASE IN CAPITAL INCREASE IN LABOR INDUSTRIAL SECTOR INDUSTRIALIZATION INEQUALITY CHANGE INTEREST RATE LABOR FLOW LABOR FORCE LABOR FORCE GROWTH LABOR MOBILITY LABOR MOVEMENTS LABOR PRODUCTIVITY LABOR PRODUCTIVITY GROWTH LABOR STATISTICS MARGINAL RETURN MARGINAL RETURN TO CAPITAL MARKET IMPERFECTIONS MEDIUM TERM MIGRATION NATURAL RESOURCES OUTPUT GROWTH OUTPUT RATIO PER CAPITA INCOME POLICY RESEARCH PRODUCTION FUNCTION PRODUCTIVE SECTOR PRODUCTIVITY GAP PRODUCTIVITY INCREASE PRODUCTIVITY INCREASES RAPID GROWTH REAL GDP REDUCING INEQUALITY RURAL AREAS RURAL LABOR RURAL POVERTY SERVICE SECTOR SURPLUS LABOR TFP TOTAL EMPLOYMENT TOTAL FACTOR PRODUCTIVITY UNEMPLOYMENT UNEMPLOYMENT RATE URBAN AREAS URBAN EMPLOYMENT VALUE ADDED WELFARE SYSTEM WORKER WORKERS |
| spellingShingle |
AGRICULTURAL OUTPUT AGRICULTURE BANK LOANS CAPITA INCOME CAPITAL ACCUMULATION CAPITAL STOCK CAPITAL-LABOR CAPITAL-LABOR RATIO COUNTRY DATA DATA ISSUES DEPRECIATION DEVELOPMENT INDICATORS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC IMPLICATIONS ECONOMIC REFORM ECONOMIC REFORMS ECONOMIC RESEARCH ECONOMIC THEORY ELASTICITY EMPLOYEE EMPLOYMENT GROWTH EMPLOYMENT INCREASES EMPLOYMENT RATES EMPLOYMENT SHARE ENVIRONMENTAL DEGRADATION FACTOR ACCUMULATION GDP GDP PER CAPITA GROWTH ACCOUNTING GROWTH PATTERN GROWTH PERFORMANCE GROWTH RATE HUMAN CAPITAL INCOME DISTRIBUTION INCOME GROWTH INCOME INEQUALITY INCREASE IN CAPITAL INCREASE IN LABOR INDUSTRIAL SECTOR INDUSTRIALIZATION INEQUALITY CHANGE INTEREST RATE LABOR FLOW LABOR FORCE LABOR FORCE GROWTH LABOR MOBILITY LABOR MOVEMENTS LABOR PRODUCTIVITY LABOR PRODUCTIVITY GROWTH LABOR STATISTICS MARGINAL RETURN MARGINAL RETURN TO CAPITAL MARKET IMPERFECTIONS MEDIUM TERM MIGRATION NATURAL RESOURCES OUTPUT GROWTH OUTPUT RATIO PER CAPITA INCOME POLICY RESEARCH PRODUCTION FUNCTION PRODUCTIVE SECTOR PRODUCTIVITY GAP PRODUCTIVITY INCREASE PRODUCTIVITY INCREASES RAPID GROWTH REAL GDP REDUCING INEQUALITY RURAL AREAS RURAL LABOR RURAL POVERTY SERVICE SECTOR SURPLUS LABOR TFP TOTAL EMPLOYMENT TOTAL FACTOR PRODUCTIVITY UNEMPLOYMENT UNEMPLOYMENT RATE URBAN AREAS URBAN EMPLOYMENT VALUE ADDED WELFARE SYSTEM WORKER WORKERS Kuijs, Louis Wang, Tao China's Pattern of Growth : Moving to Sustainability and Reducing Inequality |
| geographic_facet |
East Asia and Pacific China |
| relation |
Policy Research Working Paper; No. 3767 |
| description |
The authors study the sources and pattern of China's impressive economic growth over the past 25 years and show that key issues currently of concern to policymakers-widening inequality, rural poverty, and resource intensity-are to a large extent rooted in China's growth strategy, and resolving them requires a rebalancing of policies. Using both macroeconomic level and sector data and analyses, the authors extend the growth accounting framework to decompose the sources of labor productivity growth. They find that growth of industrial production, led by a massive investment effort that boosted the capital/labor ratio, has been the single most important factor driving GDP and overall labor productivity growth since the early 1990s. The shift of labor from low-productivity agriculture has been limited, and, hence, contributed only marginally to overall labor productivity growth. The productivity gap between agriculture and the rest of the economy has continued to widen, leading to increased rural-urban income inequality. Looking ahead, the authors calibrate two alternative scenarios. They show that continuing with the current growth pattern would further increase already high investment and saving needs to unsustainable levels, lower urban employment growth, and widen the rural-urban income gap. Instead, reducing subsidies to industry and investment, encouraging the development of the services industry, and reducing barriers to labor mobility would result in a more balanced growth with an investment-to-GDP ratio that is consistent with the medium-term saving trend, faster growth in urban employment, and a substantial reduction in the income gap between rural and urban residents. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Kuijs, Louis Wang, Tao |
| author_facet |
Kuijs, Louis Wang, Tao |
| author_sort |
Kuijs, Louis |
| title |
China's Pattern of Growth : Moving to Sustainability and Reducing Inequality |
| title_short |
China's Pattern of Growth : Moving to Sustainability and Reducing Inequality |
| title_full |
China's Pattern of Growth : Moving to Sustainability and Reducing Inequality |
| title_fullStr |
China's Pattern of Growth : Moving to Sustainability and Reducing Inequality |
| title_full_unstemmed |
China's Pattern of Growth : Moving to Sustainability and Reducing Inequality |
| title_sort |
china's pattern of growth : moving to sustainability and reducing inequality |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2005/11/6399387/chinas-pattern-growth-moving-sustainability-reducing-inequality http://hdl.handle.net/10986/8496 |
| _version_ |
1764407947616583680 |