The Impending Long March of the Chinese Economy

Harashima, Taiji (2016): The Impending Long March of the Chinese Economy.

Abstract

The Chinese economy is currently faced with the difficult problems of slowing economic growth and huge overcapacity. China is struggling to adapt to a “new normal.” Here, I examine the mechanism of why China is faced with these problems and some potential future paths of the Chinese economy. China does not have a socialist, socialist market, or market-oriented economy. Rather, it has a “state-driven economy” and that has deviated far from the saddle path to the steady state. The model of a state-driven economy constructed in this paper indicates that it is highly likely that China will proceed along a long-running transition path with low or no growth, but it is also very likely that China will excessively build up its military.

• Item Type: MPRA Paper
• Language: English
• Keywords: The Chinese economy; Transition; Economic growth; Overcapacity; Pareto inefficiency
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O53 - Asia including Middle East; P - Economic Systems > P2 - Socialist Systems and Transitional Economies > P20 - General

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