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How Important are Exports and Foreign Direct Investment for Economic Growth in the People’s Republic of China?

dc.contributor.authorYuqing Xing
dc.contributor.authorManisha Pradhananga
dc.date.accessioned2015-01-24T13:12:37Z
dc.date.available2015-01-24T13:12:37Z
dc.date.issued2013-07-01
dc.identifier.urihttp://hdl.handle.net/11540/1189
dc.description.abstractThe global financial crisis and the recent growth slowdown in the People’s Republic of China (PRC) have led to questions about the sustainability of PRC growth. The argument is that the PRC is too dependent on external demand and that it needs to rebalance its economy toward domestic consumption. However, conventional measures of external demand—share of net exports and exports as a share of gross domestic product (GDP)—are biased and do not accurately measure the contribution of external demand to GDP growth. In this paper, we propose two measures that are simple modifications of the conventional measures. We argue that our proposed measures provide a more accurate estimate of the vulnerability of the PRC economy to external shocks, in the form of sudden drops in exports and foreign direct investment (FDI). Our estimates show that in 2001 exports and FDI accounted for 18.2% of GDP growth and by 2004 the share had risen to 49%. During 2005–07, the contribution of exports and FDI to growth remained 38%–40%. Our estimates also show that the impressive recovery of the PRC economy in the post-crisis period owed at least 53% of its growth to exports and FDI. Based on these results, we conclude that the PRC economy remains highly dependent on external demand in the form of exports and FDI, and rebalancing the economy toward domestic demand has not yet been achieved.
dc.languageEnglish
dc.publisherAsian Development Bank Institute
dc.rightsCC BY-NC-ND 3.0 IGO
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/3.0/igo/
dc.titleHow Important are Exports and Foreign Direct Investment for Economic Growth in the People’s Republic of China?
dc.typeWorking Papers
dc.subject.expertTrade Finance
dc.subject.expertRisk Financing
dc.subject.expertRegional Development Finance
dc.subject.expertPublic Finance
dc.subject.expertInfrastructure Financing
dc.subject.expertFinancing of Infrastructure
dc.subject.expertFinancial Security
dc.subject.expertFinancial Intermediation
dc.subject.expertFinance And Trade
dc.subject.expertEnterprise Financing
dc.subject.expertTrade Regulation
dc.subject.expertTrade Finance
dc.subject.expertRegional Trade Agreements
dc.subject.expertGeneral Agreement On Tariffs And Trade
dc.subject.adbTaxation
dc.subject.adbBusiness Financing
dc.subject.adbInvestment Requirements
dc.subject.adbCapital Needs
dc.subject.adbTax Incentives
dc.subject.adbProject Risks
dc.subject.adbTariff agreements
dc.subject.adbCustoms convetions
dc.subject.adbImport policy
dc.subject.adbExport policy
dc.subject.naturalInvestments
dc.subject.naturalFinance
dc.subject.naturalMarket
dc.subject.naturalMarkets
dc.subject.naturalUse tax
dc.subject.naturalTax administration and procedure
dc.subject.naturalTaxing power
dc.subject.naturalEffect of taxation
dc.subject.naturalBusiness enterprises
dc.subject.naturalForeign trade and employment
dc.subject.naturalMentoring in business
dc.subject.naturalTrade routes
dc.title.seriesADBI Working Paper Series
dc.title.volumeNo. 427
dc.contributor.imprintAsian Development Bank Institute
oar.themeFinance
oar.themeTrade
oar.adminregionEast Asia Region
oar.countryChina, People’s Republic of
oar.countryHong Kong, China
oar.countryChina, People’s Republic of
oar.countryRepublic of Korea
oar.countryMongolia
oar.countryTaipei,China
oar.dep.sourceADBI
oar.identifierOAR-002254
oar.authorXing, Yuqing
oar.authorPradhananga, Manisha
oar.importtrue
oar.googlescholar.linkpresenttrue


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  • ADBI Working Papers
    The Asian Development Bank Institute (ADBI) Working Paper series is a continuation of the formerly named Discussion Paper series which began in January 2003. The numbering of the papers continued without interruption or change. ADBI was established in 1997 in Tokyo, Japan, to help build capacity, skills, and knowledge related to poverty reduction and other areas that support long-term growth and competitiveness in developing economies in Asia and the Pacific.

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