BALANCING ACT: ADJUSTMENT OF CHINA'S ECONOMY TO SECURE SUSTAINABLE GROWTH

Shi Yutian, John Hicks, P. K. Basu, Kishor Sharma, Yapa Bandara and Tom Murphy
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Shi Yutian: #x2020;School of English for International Business, Jilin Huaqiao University of Foreign Languages, P. R. China
John Hicks: #x2021;School of Accounting and Finance and Institute of Land Water and Society, Charles Sturt University, Australia§School of Accounting and Finance, Charles Sturt University, Panorama Avenue, Bathurst, Australia, 2795, Australia
P. K. Basu: #x2021;School of Accounting and Finance and Institute of Land Water and Society, Charles Sturt University, Australia
Kishor Sharma: #x2021;School of Accounting and Finance and Institute of Land Water and Society, Charles Sturt University, Australia
Yapa Bandara: #x2021;School of Accounting and Finance and Institute of Land Water and Society, Charles Sturt University, Australia
Tom Murphy: #x2021;School of Accounting and Finance and Institute of Land Water and Society, Charles Sturt University, Australia

The Singapore Economic Review (SER), 2017, vol. 62, issue 05, 1097-1114

Abstract: This paper uses income accounting techniques to assess, counterfactually, the implied impact over the last 10 years of a hypothetical government policy to constrain investment growth in order to raise the share of consumption in GDP and to bring about a balance on current account. We find that both target variables are very sensitive to changes in investment and that a policy of careful reform is called for. In the light of this finding, we review Chinese government policy pronouncements and activity with a view to assessing their appropriateness.

Keywords: China; global financial crisis; export-led growth; consumption-led growth; rebalancing; sustainable growth (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1142/S0217590815501003

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