IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/18124.html
   My bibliography  Save this paper

Water Availability as a Constraint on China's Future Growth

Author

Listed:
  • Dana Medianu
  • John Whalley

Abstract

Recent writings on China's water situation often portray China's water problems as severe and suggest that water availability could threaten the sustainability of China's future growth. However, China's high growth of the last 20 years or more has been obtained with relatively little increase in the physical volume of water. In this paper, we use a growth accounting approach to investigate both the contribution played in the past by water availability in constraining China's growth performance, and what would be involved in the future. We use a modified version of Solow growth accounting in which water in efficiency units enters the production technology, and investment in water management assets raises efficiency of water use. Our results suggest that if investments in water assets in the future were lower than they were in the past, growth might slightly increase by about 0.1 percentage points if non-water capital and water in efficiency units are close substitutes but growth rates could decrease by as much as 0.2-3.9 percentage points if investments in water assets were small, and if the elasticities of substitution were low. On the other hand, our experiments suggest that with faster growth of investments in water assets than in the past and a low elasticity of substitution growth rates could increase. But if non-water capital and water in efficiency units are close substitutes growth rates could even decrease, as in other cases.

Suggested Citation

  • Dana Medianu & John Whalley, 2012. "Water Availability as a Constraint on China's Future Growth," NBER Working Papers 18124, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:18124
    Note: EEE EFG
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w18124.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Yan Wang & Yudong Yao, 2001. "Sources of China's economic growth, 1952-99 : incorporating human capital accumulation," Policy Research Working Paper Series 2650, The World Bank.
    Full references (including those not matched with items on IDEAS)

    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. Mussarat Khan, 2016. "Contribution of female human capital in economic growth: an empirical analysis of Pakistan (1972–2012)," Quality & Quantity: International Journal of Methodology, Springer, vol. 50(2), pages 709-728, March.
    2. Almas Heshmati & Biwei Su, 2013. "Development and Sources of Labor Productivity in Chinese Provinces," China Economic Policy Review (CEPR), World Scientific Publishing Co. Pte. Ltd., vol. 2(02), pages 1-30.
    3. Chunli Shen & Heng-Fu Zou, 2008. "China: Regional Disparities In Poverty Distribution," Division of Labor & Transaction Costs (DLTC), World Scientific Publishing Co. Pte. Ltd., vol. 3(01), pages 17-56.
    4. Bloom, David E. & Canning, David & Hu, Linlin & Liu, Yuanli & Mahal, Ajay & Yip, Winnie, 2010. "The contribution of population health and demographic change to economic growth in China and India," Journal of Comparative Economics, Elsevier, vol. 38(1), pages 17-33, March.
    5. Narayan, Paresh Kumar & Smyth, Russell, 2006. "Democracy and Economic Growth in China: Evidence from Cointegration and Causality Testing," Review of Applied Economics, Lincoln University, Department of Financial and Business Systems, vol. 2(01), pages 1-18.
    6. Li, Kui-Wai & Liu, Tung, 2011. "Economic and productivity growth decomposition: An application to post-reform China," Economic Modelling, Elsevier, vol. 28(1), pages 366-373.
    7. Humberto Llavador & John E. Roemer & Joaquim Silvestre, 2010. "North-South convergence and the allocation of CO2 emissions," Economics Working Papers 1234, Department of Economics and Business, Universitat Pompeu Fabra.
    8. Nazrul Islam & Erbiao Dai & Hiroshi Sakamoto, 2006. "Role of TFP in China's Growth," Asian Economic Journal, East Asian Economic Association, vol. 20(2), pages 127-159, June.
    9. Chi, Wei & Qian, Xiaoye, 2013. "Regional disparity of labor's share in China: Evidence and explanation," China Economic Review, Elsevier, vol. 27(C), pages 277-293.
    10. Kashif Munir & Shahzad Arshad, 2018. "Factor accumulation and economic growth in Pakistan: incorporating human capital," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 45(3), pages 480-491, March.
    11. Chee Kong Wong, 2004. "Information Technology, Productivity and Economic Growth in China," Economics Discussion / Working Papers 04-21, The University of Western Australia, Department of Economics.
    12. Tan, Ruipeng & Xu, Mengmeng & Sun, Chuanwang, 2021. "The impacts of energy reallocation on economic output and CO2 emissions in China," Energy Economics, Elsevier, vol. 94(C).
    13. Fleisher, Belton & Li, Haizheng & Zhao, Min Qiang, 2010. "Human capital, economic growth, and regional inequality in China," Journal of Development Economics, Elsevier, vol. 92(2), pages 215-231, July.
    14. Thomas Gries & Margarete Redlin, 2008. "International Integration and Regional Development in China," WIDER Working Paper Series RP2008-66, World Institute for Development Economic Research (UNU-WIDER).
    15. Henderson, Daniel J. & Tochkov, Kiril & Badunenko, Oleg, 2007. "A drive up the capital coast? Contributions to post-reform growth across Chinese provinces," Journal of Macroeconomics, Elsevier, vol. 29(3), pages 569-594, September.
    16. T. Vinayagathasan & S. Vijesandiran, 2015. "Dynamic Relationship between Human Capital and Economic Growth in Sri Lanka: A Co-Integration Analysis," Growth, Asian Online Journal Publishing Group, vol. 2(2), pages 20-29.
    17. Kui-Wai Li & Tung Liu & Lihong Yun, 2008. "Decomposition of Economic and Productivity Growth in Post-reform China," Working Papers 200806, Ball State University, Department of Economics, revised Dec 2008.
    18. Ding Lu, 2011. "Transition of China’s growth pattern," Frontiers of Economics in China, Springer;Higher Education Press, vol. 6(4), pages 535-555, December.
    19. Almas Heshmati & Subal C. Kumbhakar, 2010. "Technical Change and Total Factor Productivity Growth: The Case of Chinese Provinces," TEMEP Discussion Papers 201054, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Feb 2010.
    20. Xun Lu & Dietrich Fausten & Russell Smyth, 2007. "Financial Development, Capital Accumulation and Productivity Improvement: Evidence from China," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 5(3), pages 227-242.

    More about this item

    JEL classification:

    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:nbr:nberwo:18124. 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: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.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.