The Impending Long March of the Chinese Economy

Taiji Harashima

MPRA Paper from University Library of Munich, Germany

Abstract: The Chinese economy is currently faced with the difficult problems of slowing economic growth and huge overcapacity. China is struggling to adapt to a “new normal.” Here, I examine the mechanism of why China is faced with these problems and some potential future paths of the Chinese economy. China does not have a socialist, socialist market, or market-oriented economy. Rather, it has a “state-driven economy” and that has deviated far from the saddle path to the steady state. The model of a state-driven economy constructed in this paper indicates that it is highly likely that China will proceed along a long-running transition path with low or no growth, but it is also very likely that China will excessively build up its military.

Keywords: The Chinese economy; Transition; Economic growth; Overcapacity; Pareto inefficiency (search for similar items in EconPapers)
JEL-codes: O40 O53 P20 (search for similar items in EconPapers)
Date: 2016-08-26
New Economics Papers: this item is included in nep-cna and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:73275

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