IDEAS home Printed from https://ideas.repec.org/a/bla/chinae/v24y2016i5p122-146.html
   My bibliography  Save this article

China's Growth Slowdown: Lessons from Japan's Experience and the Expected Impact on Japan, the USA and Germany

Author

Listed:
  • Guanghua Wan
  • Peter J. Morgan
  • Kyoji Fukao
  • Tangjun Yuan

Abstract

China is switching from economic growth based on extremely rapid capital accumulation to economic growth based on structural reforms and accelerated total factor productivity growth. Meanwhile, China will also face a serious excess saving problem as capital accumulation slows and, hence, needs to reduce its private saving rate. Based on this analysis, we estimated the economic impact of China's growth slowdown and hypothetical economic transformation on Japan, the USA and Germany using the world input–output database. We compared the following three scenarios for China's final demand in 2020 and economic growth from 2015 to 2020: (i) an optimistic scenario (GDP growth rate = 6.2%, investment/GDP = 0.501); (ii) a slowdown scenario (GDP growth rate = 4%, investment/GDP = 0.501); and (iii) a structural reform scenario (GDP growth rate = 6.2%, investment/GDP = 0.3). Our analysis suggests that Japan and Germany would suffer more from structural reforms in China than from a slowdown in growth. Meanwhile, for the USA, the employment decline triggered by structural reforms would be much smaller than the employment decline caused by a slowdown in growth.

Suggested Citation

  • Guanghua Wan & Peter J. Morgan & Kyoji Fukao & Tangjun Yuan, 2016. "China's Growth Slowdown: Lessons from Japan's Experience and the Expected Impact on Japan, the USA and Germany," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 24(5), pages 122-146, September.
    • Handle: RePEc:bla:chinae:v:24:y:2016:i:5:p:122-146
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/cwe.12177
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Marcel P. Timmer & Erik Dietzenbacher & Bart Los & Robert Stehrer & Gaaitzen J. Vries, 2015. "An Illustrated User Guide to the World Input–Output Database: the Case of Global Automotive Production," Review of International Economics, Wiley Blackwell, vol. 23(3), pages 575-605, August.
    2. Broadberry, Stephen & Fukao, Kyoji & Zammit, Nick, 2015. "How Did Japan Catch-up On The West? A Sectoral Analysis Of Anglo-Japanese Productivity Differences, 1885-2000," CAGE Online Working Paper Series 231, Competitive Advantage in the Global Economy (CAGE).
    3. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    4. Jorgenson, Dale W. & Kuroda, Masahiro & Nishimizu, Mieko, 1987. "Japan-U.S. industry-level productivity comparisons, 1960-1979," Journal of the Japanese and International Economies, Elsevier, vol. 1(1), pages 1-30, March.
    5. Charles Yuji Horioka, 2008. "The Flow of Household Funds in Japan," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 4(1), pages 37-52, December.
    6. Harry WU, 2015. "Accounting for the Sources of Growth in the Chinese Economy," Discussion papers 15048, Research Institute of Economy, Trade and Industry (RIETI).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Guanghua Wan & Peter J. Morgan & Justin Yifu Lin & Guanghua Wan & Peter J. Morgan, 2016. "Factors Affecting the Outlook for Medium-term to Long-term Growth in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 24(5), pages 20-41, September.
    2. Jianxin Wu & Yanrui Wu & Bing Wang, 2018. "Local Government Debt, Factor Misallocation and Regional Economic Performance in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 26(4), pages 82-105, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jan Fagerberg & Bengt-Åke Lundvall & Martin Srholec, 2018. "Global Value Chains, National Innovation Systems and Economic Development," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 30(3), pages 533-556, July.
    2. Filipa Correia & Philipp Erfruth & Julie Bryhn, 2018. "The 2030 Agenda: The roadmap to GlobALLizaton," Working Papers 156, United Nations, Department of Economics and Social Affairs.
    3. Wei, Taoyuan & Liu, Yang, 2019. "Estimation of resource-specific technological change," Technological Forecasting and Social Change, Elsevier, vol. 138(C), pages 29-33.
    4. Jan Hagemejer & Jakub Mućk, 2018. "Unraveling the economic performance of the CEEC countries. The role of exports and global value chains," NBP Working Papers 283, Narodowy Bank Polski.
    5. Bartelme, Dominick & Lan, Ting & Levchenko, Andrei A., 2024. "Specialization, market access and real income," Journal of International Economics, Elsevier, vol. 150(C).
    6. David Autor & Anna Salomons, 2018. "Is Automation Labor Share–Displacing? Productivity Growth, Employment, and the Labor Share," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 49(1 (Spring), pages 1-87.
    7. Valeriy V. Mironov & Liudmila D. Konovalova, 2019. "Structural changes and economic growth in the world economy and Russia," Russian Journal of Economics, ARPHA Platform, vol. 5(1), pages 1-26, April.
    8. Carey W. King & John P. Maxwell & Alyssa Donovan, 2015. "Comparing World Economic and Net Energy Metrics, Part 2: Total Economy Expenditure Perspective," Energies, MDPI, vol. 8(11), pages 1-22, November.
    9. S. Nazrul Islam & Kenneth Iversen, 2018. "From “Structural Change” to “Transformative Change”: Rationale and Implications," Working Papers 155, United Nations, Department of Economics and Social Affairs.
    10. Theo Santini & Ricardo Azevedo Araujo, 2021. "Productivity growth and sectoral interactions under Domar aggregation: a study for the Brazilian economy from 2000 to 2014," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 10(1), pages 1-30, December.
    11. Nuvolari, Alessandro & Russo, Emanuele, 2019. "Technical progress and structural change: a long-term view," MERIT Working Papers 2019-022, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    12. repec:bin:bpeajo:v:49:y:2019:i:2018-01:p:1-87 is not listed on IDEAS
    13. Harald Oberhofer & Christian Glocker & Werner Hölzl & Peter Huber & Serguei Kaniovski & Klaus Nowotny & Michael Pfaffermayr & Monique Ebell & Nikolaos Kontogiannis, 2016. "Single Market Transmission Mechanisms Before, During and After the 2008-09 Crisis. A Quantitative Assessment," WIFO Studies, WIFO, number 59156, January.
    14. Acar, Sevil & Yeldan, A. Erinç, 2018. "Investigating patterns of carbon convergence in an uneven economy: The case of Turkey," Structural Change and Economic Dynamics, Elsevier, vol. 46(C), pages 96-106.
    15. FUKAO Kyoji & IKEUCHI Kenta & KWON Hyeog Ug & YoungGak KIM & MAKINO Tatsuji & TAKIZAWA Miho, 2015. "Lessons from Japan's Secular Stagnation," Discussion papers 15124, Research Institute of Economy, Trade and Industry (RIETI).
    16. Georg Erber, 1995. "Public Infrastructure, Productivity and Competitiveness: Analysis of Relative Differences and Impacts with Regard to U.S. and German Industries," Discussion Papers of DIW Berlin 115, DIW Berlin, German Institute for Economic Research.
    17. Révész, Tamás & Boda, György & Losonci, Dávid & Fülöp, Zoltán, 2019. "A növekedési ütem és a foglalkoztatás növelésének lehetőségeiről [The chances of enhancing growth rate and employment]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(4), pages 376-417.
    18. Hakan Nordström & Harry Flam, 2018. "Production Integration in the European Union," CESifo Working Paper Series 6944, CESifo.
    19. repec:nbr:nberch:14019 is not listed on IDEAS
    20. Malliet, Paul & Reynès, Frédéric G., 2022. "Empirical estimates of the elasticity of substitution of a KLEM production function without nesting constraints: The case of the Variable Output Elasticity-Cobb Douglas," Conference papers 333423, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    21. Kvedariene Audrone, 2019. "Creation of High Technologies: Comparative Analysis of Countries," Economics and Culture, Sciendo, vol. 16(2), pages 58-71, December.
    22. Hiroaki Sasaki, 2021. "Non‐renewable resources and the possibility of sustainable economic development in an economy with positive or negative population growth," Bulletin of Economic Research, Wiley Blackwell, vol. 73(4), pages 704-720, October.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:chinae:v:24:y:2016:i:5:p:122-146. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/iwepacn.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.