China's economic growth and convergence

Lee, Jong Wha

doi:10.1111/twec.12554

Cited by 43 publications

(32 citation statements)

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“…There are signifi cant gaps in the labor productivity level and growth between the manufacturing and services sectors in China. The average annual growth in per worker value added in the services sector was only 1.3 percent per year for 1980-2010, which is significantly lower than the manufacturing sector's 15.0 percent (Lee, 2016b).…”

Section: Implications For China's Sustained Growthmentioning

confidence: 76%

“…Its unprecedented economic growth since the 1980s refl ects a strong convergence effect fueled by economic reform and opening up. In addition, abundant human resources, high savings and investment rates, and prudent macroeconomic management have contributed to the strong growth (Lee, 2016b Although its economy has grown rapidly and its per capita income gap has diminished, China showed increasing average growth rates until 2010 ( Figure 2). This acceleration of economic growth in the takeoff stage of development also occurred in Korea up to 1990 andin Japan up to 1970 (Figure 2 These forecasts are broadly consistent with views that predict a "soft landing" of the Chinese economy (e.g.…”

Section: Implications For China's Sustained Growthmentioning

confidence: 99%

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Korea's Economic Growth and Catch‐up: Implications for China

Lee

2016

China and World Economy

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This study investigates the economic growth and catch‐up of Korea over the past half century. Korea's growth experience confirms the prediction of a “conditional convergence” theory. Cross‐country regression further suggests that Korea's strong catch‐up to the USA is also attributable to its favorable growth factors such as strong investment, lower fertility, greater trade openness, and improvements in human resources and rule of law. However, as Korea catches up to the USA and its steady‐state level in per worker output, it will be subject to a growth slowdown unless improvements are made in those growth factors. While manufacturing‐oriented and export‐oriented development has served Korea's success well, poor productivity performance in the services sector has hampered overall productivity growth. Korea's experience implies that China's potential growth rates are likely to slow in the coming decades due to the convergence effect and with the rebalancing toward a domestic consumption and services‐based economy. China needs to upgrade its rule of law, reform state‐owned enterprises and improve productivity, particularly in its services sector, to sustain strong growth.

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Section: Implications For China's Sustained Growthmentioning

confidence: 76%

Section: Implications For China's Sustained Growthmentioning

confidence: 99%

Korea's Economic Growth and Catch‐up: Implications for China

Lee

2016

China and World Economy

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“…The top leaders of the two countries promoted mutually beneficial economic and trade cooperation. Furthermore, China's strong human capital, high trade openness and improved institutions, enabled the economy to develop rapidly during this period [56]. Under this background, Chinese enterprises gradually started to invest in Indonesia.…”

Section: Datamentioning

confidence: 99%

“…This trend can be explained by three reasons. China's strong growth in the past decades enabled the economy to converge with advanced economies in terms of income level, meaning China has sufficient funds to support foreign investment activities [56]. In addition, the rapid rise of labor wages in China forced a large number of companies to move to countries where labor costs are low and abundant [57].…”

Section: Datamentioning

confidence: 99%

China’s Outward FDI in Indonesia: Spatial Patterns and Determinants

Supriyadi

Wang

2018

Sustainability

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China has gradually become an important world investor with the implementations of its “Going Global” and “Belt and Road” strategy initiatives. Indonesia is the world’s largest archipelagic country, and has the largest economy of the ASEAN (Association of Southeast Asian Nations). Therefore, Indonesia is an important node for China’s implementation of its “Belt and Road” initiative. However, the existing research results regarding China’s OFDI (Outward Foreign Direct Investment) in Indonesia have indicated that little focus has been placed on the distribution patterns and determinants at the provincial levels. In this study, spatial analysis and mathematical statistics methods were used to analyze the temporal and spatial pattern evolution characteristics of China’s OFDI in Indonesia for the period ranging from 2006 to 2016. Also, the mechanism of the pattern evolution was quantitatively identified. The results obtained in this research study indicated the following: (1) China’s OFDI in Indonesia was observed to be characterized by fluctuations in investment amounts and rising numbers of investment projects, also, the investment amounts and number of projects were spatially dispersed; (2) the overall spatial evolution of China’s OFDI in Indonesia was found to be characterized by certain patterns, such as “west higher than the east, and south higher than the north” patterns. Moreover, the direction of the investment gravity center was determined to be obviously distinct during different periods; (3) high-level investments were found to be focused in only a few provinces, meanwhile, the majority of the provinces continued to be in a low-level stable state of investment from China; (4) this study’s OLS (Ordinary Least Square) regression and step-wise regression models revealed that institutional factors, political relations, and human resources were the most important factors which had affected China’s OFDI in Indonesia during the study period.

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“…However, the conditional convergence model implies that economies with more favorable factors influencing the steadystate level of per capita output will grow faster than those with less favorable factors, controlling for the level of the per capita income gap. Hence, while China's average per capita GDP growth is predicted to decline significantly in the coming decades due to the convergence effect, the rate of decline hinges on how China pursues policies to upgrade human resources, institutional quality, and productivity -while managing macroeconomic and financial vulnerabilities and structural problems (Lee, 2017b).…”

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confidence: 99%

Comment on “Changing International Financial Architecture: Growing Chinese Influence?”

Lee¹

2018

Asian Economic Policy Review

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Ito (2018) aims to provide an overview of the evolution of international financial architecture by focusing on the role and influence of Asia, especially China. Ito argues that the international financial architecture is becoming fragmented as a result of Asia strengthening its own regional institutions, and claims China will rise to become "the third polar," after the US and Euro Zone. He also points out that Asian countries became more confident in their crisis prevention mechanisms after experiencing the Asian Financial Crisis (AFC), the Global Financial Crisis (GFC), and the European sovereign debt crisis.Ito provides useful information and many stimulating arguments. In particular, he summarizes succinctly how the three major crises have influenced Asian thinking relating to both international financial architecture and the power balance between different regions and countries. Many Asian governments became more skeptical of the role of the International Monetary Fund during the AFC and the GFC, and built their own preventive measures to avoid future crises.The GFC demonstrated that the downside costs of financial and trade globalization were magnified in those economies where the external positions and financial systems had weaknesses. However, most Asian economies were relatively resilient during the GFC, compared with the AFC. Ito (2018) points out that many Asian countries became more confident in their ability to prevent contagion to their countries by managing capital outflows and became more skeptical of the virtues of US free-market capitalism. Further discussion is needed to explain how much the reforms implemented by Asian economies after the two crises have contributed to improving the soundness and resilience of their financial markets and systems, and how helpful they will be to prevent a future crisis. Some papers argue that the Asian governments managed the GFC with improved policies (for example, flexible exchange rate system) and better crisis management and resolution mechanisms (e.g. capital flow management and macroprudential oversight), but still need to continue to amend financial vulnerabilities and improve macroeconomic and financial policy frameworks. For example, Lee (2017a) discusses the Korean experiences and reforms during the AFC and the GFC.The necessity of dealing with crises resulting from cross-border financial panic calls for cooperation among neighboring economies. Asian economies must strengthen their †Correspondence: Jong-Wha Lee,

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China's economic growth and convergence

Cited by 43 publications

References 34 publications

Korea's Economic Growth and Catch‐up: Implications for China

Korea's Economic Growth and Catch‐up: Implications for China

China’s Outward FDI in Indonesia: Spatial Patterns and Determinants

Comment on “Changing International Financial Architecture: Growing Chinese Influence?”

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