A Model of Economic Growth in China

Tabuchi, Takatoshi and Wang, Congcong and Zhu, Xiwei (2023): A Model of Economic Growth in China.

Abstract

We present a model of Chinese growth in a two-country economy with the manufacturing and natural resource sectors to analyze the impacts of the reform and opening-up policy, which promotes free trade and technological progress, on the net capital flows, net export, and social welfare. We show that manufacturing capital in China initially decreased before increasing. This corresponds with the fact that China was a net importer of manufactured goods initially and became a net exporter recently. These results are consistent with the data obtained after the reform and opening-up policy in 1978.

• Item Type: MPRA Paper
• Language: English
• Keywords: trade liberalization; technological progress; the reform and opening-up policy; deindustrialization; home market effect.
• Subjects: F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies ; Fragmentation; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity

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