Abstract
Since the reform and opening up to the outside world, China’s economy has created a remarkable growth miracle. However, as China enters the new normal economy, the world is full of doubts about its potential for economic growth. The article proper concerns an analysis on some factors affecting China’s economic growth, such as physical capital, labor quality, labor quantity, energy consumption, and environmental cost. Also embraced in this article is the measurement of the contribution of each factor to total factor productivity. The research is conducted on the basis of the provincial panel data of China over 2002–2016, from the perspective of cleaner production. The results reveal that (a) China’s economic growth had significant positive correlations with factor inputs, including traditional input elements (physical capital, labor quantity, labor quality) and natural elements (energy consumption and environmental cost); (b) the direct and indirect effects of physical capital, labor quality, and energy consumption on economic growth were significantly positive, while those of environmental cost were significantly negative; and (c) the contributions of the factors to the total factor productivity were ranked respectively as follows: physical capital (48.63%), energy consumption (16.81%), labor quality (14.85%), environmental cost (10.88%), and labor quantity (8.83%). China’s economic growth belonged to “perspiration.” In addition to the traditional input factors, natural factors also played an important role in boosting China’s economic development. It is urgent how to highlight the role of labor quality, while downplaying the contribution of natural factors, and then shift to cleaner production in China.
Highlights
Since 1978, China’s economy has created a “growth miracle,” drawing worldwide attention
Their study found that physical capital contributions were 66.34%, while the contributions of labor and total factor productivity (TFP) were 5.7% and 27.59%, respectively .Young (2003) stressed that China’s TFP growth rates were below 1.5%, arguing that the main reasons for the growth were sharp spikes in factor inputs
The results showed that, from the perspective of historical development and the reality in China, the medium long-term power of high-quality economic growth in China in the new era would be to increase the contribution of TFP growth to economic growth in China
Summary
Since 1978, China’s economy has created a “growth miracle,” drawing worldwide attention. Yang and Zhao (2020) found that the model of China’s economic growth was not sustainable by introducing ecological factors into economic production function. Environment is taken as a natural factor and introduced into the production function to analyze the factor input performance of China’s economic growth under the spatial correlation. On the contrary, existing studies only estimated the impact or marginal effects of capital, labor, energy and environment on economic growth, failing to measure their specific contributions This article adopts the non-radial input-oriented TFP model to compute the TFP, and decomposes the contribution of input factors to the TFP, and further investigates the main sources of China’s economic growth. GDP (gross domestic product) is considered a dependent variable, while independent variables are physical capital, labor quality, labor quantity, energy consumption, and environmental cost. The natural logarithm of the variable makes the value more stable
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