China’s first priority in post-war state building: A wealthy state, or a strong army?

Cheng King and Jane Du

Journal of Policy Modeling, 2018, vol. 40, issue 5, 851-872

Abstract: This analysis examined causal links in China’s defence–growth nexus in 1960–2016. The results show that better growth significantly reduces military-civilian ratio and propels military reforms. The unidirectional threshold causality from growth to defence shows that the military impact on a positive change in China’s growth is little in the long term. Conversely, the growth impact of a positive change in defence has accelerated after it reaches the threshold year in 1987. This finding explains why Chinese economy stagnated when defence was prioritised and why China has risen dramatically in the Far East after three decades of fast economic growth.

Keywords: Defence spending; Economic growth; Threshold ADL cointegration; China’s military reform (search for similar items in EconPapers)
JEL-codes: C22 F52 H30 N45 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:40:y:2018:i:5:p:851-872

DOI: 10.1016/j.jpolmod.2018.07.001

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