from the Dallas Fed
— this post authored by Anton Cheremukhin
Market reforms account for almost half of China’s growth miracle since 1978. However, the pace of expansion is bound to slow down as China approaches the technological frontier.
China has grown at an average annual rate of 9.4 percent since beginning its economic reforms in 1978 – an extraordinary performance reminiscent of the much smaller Asian Tiger economies of South Korea and Taiwan decades earlier.
It’s difficult to maintain such expansion. China’s growth rate has recently slipped to the 7 – 8 percent range, prompting some analysts to ask whether the miracle has come to an end. The short answer may well be that China, while facing a robust future, is encountering the increasing constraints of an advanced economy.
Understanding the future of the Chinese economy requires understanding its past – at the very least, the past since the Communist Party founded the People’s Republic of China in 1949 and regular data collection started in 1952. Specifically, it’s useful to examine the speed with which China grew before its relatively recent reforms and how the implementation of those reforms accelerated growth.
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Source:http://dallasfed.org/assets/documents/research/eclett/2015/el1510.pdf
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