Productivity in China: past success and future challenges
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Yanqun Zhang: Institute of Quantitative and Technical Economics, Chinese Academy of Social Sciences, No. 5 Jianguomennei Street, IQTE, CASS, Beijing
Asia-Pacific Development Journal, 2017, vol. 24, issue 1, 1-21
The present paper discusses total factor productivity (TFP) in China, including its past success, the current slowdown, and the potential for future growth. It begins by documenting the development of TFP growth over the past three and a half decades, its driving forces and its contribution to the economic growth of the country. It then analyses the reasons for the current slowdown of TFP and economic growth, addresses the institutional imperfections that hinder growth, and explains the government policies and strategies aimed at fostering TFP. Next, it explores the potential for TFP growth from the perspective of institutional reform, investment in research and development and human capital. The paper concludes that although the resources of the past successful TFP have decreased or diminished, further institutional reform, increasing investment in research and development and human capital, and strategies promoting indigenous innovation will become new engines for future TFP growth in China. As the countryâ€™s TFP is still at a low level compared with advanced economies, there is large scope for China to maintain relatively high TFP growth, although uncertainty and risk are associated with this process.
Keywords: Chinaâ€™s total factor productivity (TFP); institutional reform; indigenous innovation; new normal; strategies for fostering TFP; potential TFP growth (search for similar items in EconPapers)
JEL-codes: E17 C22 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:unt:jnapdj:v:24:y:2017:i:1:p:1-21
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