China's slowdown

Barry Eichengreen

KDI Journal of Economic Policy, 2024, vol. 46, issue 1, 1-19

Abstract: This paper evaluates explanations for China's growth slowdown. The natural tendency for rapidly growing economies to slow down is a major factor, along with problems bequeathed by unbalanced growth, including a declining ICOR, slowing total factor productivity growth, and rising indebtedness. A number of other mechanisms are of lesser importance: demographics, President Xi's centralization of political power and anti-corruption campaign, and U.S. export controls. Sustaining growth in the longer term will require China to step away from investment, debt and export-fueled growth in favor of a balanced growth model with household consumption playing a larger role. Doing so will require hardening of the budget constraints of regional and local governments and restructuring of the nonperforming debts of property and construction companies.

Keywords: China; Growth Slowdowns; Economic Growth; Debt (search for similar items in EconPapers)
JEL-codes: E02 O10 O11 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:kdijep:289786

DOI: 10.23895/kdijep.2024.46.1.1

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