Is the People’s Republic of China’s Current Slowdown a Cyclical Downturn or a Long-term Trend? A Productivity-Based Analysis
Bai, Chong–En; Zhang, Qiong | January 2017
Abstract
Whether the People’s Republic of China’s (PRC) economic slowdown since the 2008 financial crisis is a cyclical downturn or a long-run trend has important policy implications. Based on provincial panel data, this article identifies the determinants of productivity and uses counter-factual analysis to decompose the causes of the PRC’s post-crisis slowdown. It finds that economic openness has a significantly positive impact on the technical efficiency of production, whereas the income level has a significantly negative effect. Second, a significantly negative correlation is observed between the stock of inventory and productivity, while the opposite is observed between employment involvement rate and productivity. Third, government size and investment rates both have significantly negative effects on productivity. Lastly, the diminishing late-mover advantage and the growth in investment rate are both major contributors to the current decline in the PRC’s productivity. Although the stimulus-induced investment surge has effectively offset the negative effects of the crisis on the PRC’s growth, it is not conducive to the growth of productivity and consumption. The current economic slowdown does not seem to be a cyclical downturn. Indeed, further reforms are needed to stabilize the PRC’s growth.
Citation
Bai, Chong–En; Zhang, Qiong. 2017. Is the People’s Republic of China’s Current Slowdown a Cyclical Downturn or a Long-term Trend? A Productivity-Based Analysis. © Asian Development Bank Institute. http://hdl.handle.net/11540/6788.Keywords
Price stabilization
Food prices
Price policy
Crisis
Unemployment
Economic cooperation
Gross domestic product
Employment
Economic forecast
Economic indicators
Growth models
Gross domestic product
Macroeconomics
Economic forecast
Social condition
Economic dependence
Economic assistance
Economic Crisis
Economic Efficiency
Economic Policies
Regional Economic Development
Job Evaluation
Evaluation
Macroeconomic
Macroeconomic Analysis
Performance Evaluation
Impact Evaluation
Economic Welfare
Economic Incentives
Open price system
Price fixing
Price regulation
Consumer price indexes
Financial crisis
Labor economics
Regional economics
Turnover
Economic survey
Job analysis
Labor turnover
Exports
Economic development projects
Economic policy
Economic forecasting
Welfare economics
Welfare state
Poor
Food relief
Poverty
Domestic economic assistance
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Citable URI
http://hdl.handle.net/11540/6788Metadata
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