On the Growth Factors and Model of Economic Development of China

Abstract

The growth dynamics of the Chinese economy and the factors of its growth in recent years (2017–2022) are analyzed. Particular attention is paid to the role of foreign trade, the movement of cross-border capital in the economic development of the PRC, and the state of its debt position. A number of conclusions are made regarding the prospects for growth and evolution of China's economic development model. Over the past ten years, the third sphere (services) has become a leading in the production of China’s GDP, ahead of the second (industrial) sphere. The analysis of GDP structure on expenses shows that the economic growth of the PRC is primarily supported by the internal factors of consumer and investment demand. The net export of goods and services currently occupies a secondary position among growth factors. A comparison of China’s GDP dynamics and foreign trade shows the high stability of the Chinese economy to changes in trade volumes. It is noted that China's priority efforts are focused on the formation of a new model of economic development: innovative in nature, based on a capacious domestic market, closely interacting with the world. Actively used by China until recently, the export-oriented development model has long exhausted itself in many respects. The new innovative development model will differ from the development model of new industrial countries that have solved similar tasks of maintaining growth. First of all, in China’s huge domestic market and the need to use to all domestic and external growth factors. Such a development model is designed to ensure high quality growth and sustainable development. Innovation will replace export orientation and capital accumulation as a key driver of growth. This will make it possible to fully develop an intensive type of growth instead of an extensive one. The factors of domestic consumer and investment demand, as well as external export demand, will continue to play an important supporting role in ensuring China's economic growth.