 Growth Slowdown in China since 2008: Will There Be a Hard Landing in the Near Future?Pingyao Lai China & World Economy, 2015, vol. 23, issue 3, 42-58 Abstract: China has witnessed an unprecedented great leap forward in investment since the 2008 global financial crisis, and at the same time real GDP growth has undergone a significant slowdown. This paper examines China's growth slowdown since 2008 up to 2013 using a growth accounting model in a systematic way. It is found that China's growth slowdown since 2008 almost completely comes from a sharp slowdown in total factor productivity growth. During this period, the positive effect on growth from expanding investment has been completely offset by the negative effect of the slowdown in total factor productivity growth. Currently, China's economy has slid into the Solow downward path. Under these circumstances, a soft landing is completely infeasible. Unless the Chinese Government implements substantial rebalancing and comprehensive and in-depth market-oriented reform, accompanied by large-scale de-investment (decreasing in the ratio of investment in GDP) and massive employment adjustment, China will be unable to avoid the Solow downward path, and a hard landing in investment will be inevitable in the near future. Date: 2015 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:chinae:v:23:y:2015:i:3:p:42-58 Ordering information: This journal article can be ordered from Access Statistics for this article China & World Economy is currently edited by Yongding Yu More articles in China & World Economy from Institute of World Economics and Politics, Chinese Academy of Social Sciences Contact information at EDIRC. |
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