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Take-off, Persistence and Sustainability: The Demographic Factor in Chinese Growth

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  • Fang Cai
  • Yang Lu

Abstract

With the reduction of the working-age population and the increase of the population dependency ratio as the main indicators of the diminishing demographic dividend, China's potential growth rate is decreasing. Our results suggest that the demographic dividend contributed to nearly one fourth of the economic growth in China in the past three decades, while total factor productive growth explains another third and capital accumulation explaining the remaining growth (nearly half). China's potential growth rate will continue to slow—it was nearly 10 per cent during 1980–2010 but 6.65 per cent on average during 2016–2020—because of the diminishing demographic dividend, but reform measures are conductive to clearing the institutional barriers to the supply of factors and productivity, buffering the potential growth rate. The aggregate reform dividend could reach to 1–2 per cent on average during 2016–2050.

Suggested Citation

  • Fang Cai & Yang Lu, 2016. "Take-off, Persistence and Sustainability: The Demographic Factor in Chinese Growth," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 3(2), pages 203-225, May.
  • Handle: RePEc:bla:asiaps:v:3:y:2016:i:2:p:203-225
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    File URL: http://hdl.handle.net/10.1002/app5.139
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    References listed on IDEAS

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