【原创】China’s Potential Economic Growths ...
China’s Potential Economic Growths during 2015-2025under Different Scenarios
Li Ping and Lou Feng
Institute of Quantitative and Technical Economics,Chinese Academy of Social Sciences, Beijing, China
Abstract: China hasentered a crucial period of further growth and restructuring that will lastuntil 2025. Based on a review of the major factors affecting China’s potentialeconomic growth, this paper has created an integrated economic system model consisting of system dynamics,econometrics, and input-output for the forecast of China’s economic size andstructure by 2025. Analysis shows that prior to 2025, China will be able tomaintain a potential annual economic growth rate of 5.7%-7.2%. Faced with aninternational environment of a possible slowdown of advanced economies anddiminishing demographic dividends, China needs to further expedite itsurbanization process, enhance R&D and education spending, increase totalfactor productivity (TFP), vigorously develop the tertiary sector, and expandconsumption in order to achieve the optimistically estimated growth of 6.6%-7.4%during the period of 2015-2025. Economic growth should be accompanied by theupgrade of industry structure and improvement of investment and consumptionstructures.
Keywords: China’s economy, structuraltransition, potential economic growth rate
JEL Classification: O11, O40
Correspondingauthor:
This paper is an outcome of Study onChina’s Potential Economic Growth Calculations, which is a major program of theNational Social Sciences Foundation (Grant No.12AZD096).
Between 2014 and 2025, the realgrowth rates of China’s fixed asset investment and capital formation willdemonstrate a tendency of decline. However, between 2014 and 2020, fixed asset investment andcapital formation will maintain relatively rapid growth rates. Under thebenchmark scenario, during the periods of 2014-2015, 2016-2020, and 2021-2025,the real growth rate of China’s fixed asset investment will reach 12.8%, 11.8%and 10.5% and the real growth rate of capital formation will reach 11.9%, 10.3%and 8.4% respectively.
Between 2014 and 2025, the realgrowth rate of final consumption will demonstrate a tendency of slightincrease. Under the benchmark scenario, the real growth rate of finalconsumption will reach 10.2%, 11.0% and 11.6% respectively during the periodsof 2014-2015, 2016-2020, and 2021-2025.
Given the challenges andopportunities of the world economy in the post-crisis era, during the periodsof 2014-2015, 2016-2020, and 2021-2025, China’s nominal growth rate of exportis expected to reach 7.3%, 6.0% and 4.0% respectively and the nominal growthrate of import is expected to reach 9.5%, 7.0% and 4.1% respectively withimport growth slightly above export growth.
Table 2 provides a forecast of China’s economicstructure at the four time points of 2010, 2015, 2020, and 2025 under thebenchmark scenario. Judging by the tendencies of industrial structure, between2010 and 2025 the share of value-added of China’s primary industry andsecondary industry in GDP will gradually decline while the share of thevalue-added of the tertiary industry will increase. In terms of GDP compositionby expenditure category, the share of final consumption will gradually increaseduring 2010-2025; the shareof capital formation will continue to increase during2011-2020, but the growth rate will decline during 2021-2025; the shareof net exports in goods and services will gradually decline and a generalequilibrium or slight deficit will be seen in foreign trade.