China’s Growth:The Making of anEconomicSuperpowerLinda Yuehwww.lindayueh.comTwitter @lindayuehTuesday, 25 June 13
China’s Growth:The Making of an Economic• What has driven growth since 1979?• Re-balancing challengesGoal for next 30 year...
China vs G73Tuesday, 25 June 13
Average income near “trap”level03,7507,50011,25015,00019801981198219831984198519861987198819891990199119921993199419951996...
5Tuesday, 25 June 13
China’s impressive growth6Tuesday, 25 June 13
Growth drivers7Tuesday, 25 June 13
8Tuesday, 25 June 13
9Tuesday, 25 June 13
10Tuesday, 25 June 13
Contributions to growth Factor accumulation: 60-70%• Capital accumulation: 50%• Labour accumulation: 10-20% Total Factor...
Re-balancing challenges(1) Increase reliance on own market, less onexports(2) Raise consumption, reduce inefficient saving...
13(1) Re-balancing towardsservices0%25%50%75%100%1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 200...
14(2) Raise consumption as % GDP30%38%45%53%60%197819791980198119821983198419851986198719881989199019911992199319941995199...
15(2) Address growth in0%15%30%45%60%1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Govern...
(3) Reduce state sector?16State-owned enterprisesPrivate firmsTuesday, 25 June 13
(3) State-owned sector stillimportant for jobs17Tuesday, 25 June 13
(3) Notable productivitydifferences18Tuesday, 25 June 13
(3) Also in return on assets19Tuesday, 25 June 13
(4) Signs of innovation20Tuesday, 25 June 13
21(5) China “going global”Source: IMF.Tuesday, 25 June 13
Salter-Swan Model linking interestrate & exchange rate reformsTuesday, 25 June 13
23The next decades of reform• 2020: Re-structuring the economy• 2030: Productivity & innovation as growthdrivers• 2040: St...
China’s Growth:The Making of anEconomicSuperpowerLinda Yuehwww.lindayueh.comTwitter @lindayuehTuesday, 25 June 13
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Linda Yueh on prospects for the Chinese economy

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Linda Yueh on prospects for the Chinese economy

  1. 1. China’s Growth:The Making of anEconomicSuperpowerLinda Yuehwww.lindayueh.comTwitter @lindayuehTuesday, 25 June 13
  2. 2. China’s Growth:The Making of an Economic• What has driven growth since 1979?• Re-balancing challengesGoal for next 30 years: Overcoming the“middle income country trap”2Tuesday, 25 June 13
  3. 3. China vs G73Tuesday, 25 June 13
  4. 4. Average income near “trap”level03,7507,50011,25015,00019801981198219831984198519861987198819891990199119921993199419951996199719981999200020012002200320042005200620072008200920102011201220132014201520162017US$atPPPMiddleTuesday, 25 June 13
  5. 5. 5Tuesday, 25 June 13
  6. 6. China’s impressive growth6Tuesday, 25 June 13
  7. 7. Growth drivers7Tuesday, 25 June 13
  8. 8. 8Tuesday, 25 June 13
  9. 9. 9Tuesday, 25 June 13
  10. 10. 10Tuesday, 25 June 13
  11. 11. Contributions to growth Factor accumulation: 60-70%• Capital accumulation: 50%• Labour accumulation: 10-20% Total Factor Productivity (TFP): 30-40%• Human capital: 11-15%• Factor re-allocation: 8-15%• Innovation: 16-17% minus “imitation” =6-13%11Tuesday, 25 June 13
  12. 12. Re-balancing challenges(1) Increase reliance on own market, less onexports(2) Raise consumption, reduce inefficient savings(3) Grow private sector, reduce distortions fromstate-owned sector(4) Increase innovation, as imitation limitsreached12Tuesday, 25 June 13
  13. 13. 13(1) Re-balancing towardsservices0%25%50%75%100%1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006ShareofGDP(%)Primary Secondary TertiaryServicesIndustryAgricultureTuesday, 25 June 13
  14. 14. 14(2) Raise consumption as % GDP30%38%45%53%60%1978197919801981198219831984198519861987198819891990199119921993199419951996199719981999200020012002200320042005200620072008Tuesday, 25 June 13
  15. 15. 15(2) Address growth in0%15%30%45%60%1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Government Households FirmsShareofGDPTuesday, 25 June 13
  16. 16. (3) Reduce state sector?16State-owned enterprisesPrivate firmsTuesday, 25 June 13
  17. 17. (3) State-owned sector stillimportant for jobs17Tuesday, 25 June 13
  18. 18. (3) Notable productivitydifferences18Tuesday, 25 June 13
  19. 19. (3) Also in return on assets19Tuesday, 25 June 13
  20. 20. (4) Signs of innovation20Tuesday, 25 June 13
  21. 21. 21(5) China “going global”Source: IMF.Tuesday, 25 June 13
  22. 22. Salter-Swan Model linking interestrate & exchange rate reformsTuesday, 25 June 13
  23. 23. 23The next decades of reform• 2020: Re-structuring the economy• 2030: Productivity & innovation as growthdrivers• 2040: Stable & strong institutionalfoundationsTuesday, 25 June 13
  24. 24. China’s Growth:The Making of anEconomicSuperpowerLinda Yuehwww.lindayueh.comTwitter @lindayuehTuesday, 25 June 13

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