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China's slowdown

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  • Eichengreen, Barry

Abstract

This paper evaluates explanations for China's growth slowdown. The natural tendency for rapidly growing economies to slow down is a major factor, along with problems bequeathed by unbalanced growth, including a declining ICOR, slowing total factor productivity growth, and rising indebtedness. A number of other mechanisms are of lesser importance: demographics, President Xi's centralization of political power and anti-corruption campaign, and U.S. export controls. Sustaining growth in the longer term will require China to step away from investment, debt and export-fueled growth in favor of a balanced growth model with household consumption playing a larger role. Doing so will require hardening of the budget constraints of regional and local governments and restructuring of the nonperforming debts of property and construction companies.

Suggested Citation

  • Eichengreen, Barry, 2024. "China's slowdown," KDI Journal of Economic Policy, Korea Development Institute (KDI), vol. 46(1), pages 1-19.
    • Handle: RePEc:zbw:kdijep:289786
    DOI: 10.23895/kdijep.2024.46.1.1
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    References listed on IDEAS

    as
    1. Bown, Chad, 2020. "How the United States Marched the Semiconductor Industry into Its Trade War with China," East Asian Economic Review, Korea Institute for International Economic Policy, vol. 24(4), pages 349-388, December.
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    3. Martin Chorzempa, 2023. "How US chip controls on China benefit and cost Korean firms," Policy Briefs PB23-10, Peterson Institute for International Economics.
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    More about this item

    Keywords

    China; Growth Slowdowns; Economic Growth; Debt;
    All these keywords.

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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