Abstract
The slowdown of China’s economic growth in the middle-income stage has caused widespread concerns. Based on the analysis of economic structures to explain the downward trend of economic growth, this study expanded the Solow-Swan model to investigate the structural imbalances and evaluated their impacts during the structural transformation in different stages and regions on the economic downturn. Considering the processes of production, distribution, and consumption, six structures were chosen for national and prefecture-levels in China from 1997 to 2017, including sectoral structure, population structure, investment and consumption structure, import-export structure, urban-rural income structure, and financial structure. The study found that China’s comprehensive economic structure was significantly different before and after the middle-income stage, and structural bonus tended to decline. Structural imbalance presented a U-shaped pattern of decreasing first and then increasing, and the impact on economic growth underwent stages of suppression-promotion-suppression. There was a significant difference in the imbalance of six sub-structures and their impacts; furthermore, in the four regions of east, center, west, and northeast the observations were very different. Taken together, the imbalance of economic structure and economic transformation coexisted, and the economic growth slowed down. Based on the experiences from China, this paper provided some evidence for promoting structural optimization and transformation.
Highlights
China has achieved rapid economic growth since the reform and opening up
Factor endowment determines the optimal sectoral structure and it is inseparable from the support of financial structure, which adapted to the specific stage
Focusing on the background of China’s economic growth slowdown and economic transformation in the middle-income stage, this study took the perspective of economic structures
Summary
China has achieved rapid economic growth since the reform and opening up. According to the criteria of national income established by World Bank, China became a lower-middleincome country in 2001 and transformed to an upper-middle-income country in 2010 (Fig 1). Development issues at the middle-income stage can be attributed to the balance between economic structure and economic growth. The report of the 17th National Congress of the Communist Party of China (http://www.china.com.cn/policy/txt/2007-10/24/content_ 9435992_5.htm) pointed out that China should vigorously push forward strategic economic restructuring, accelerate the transformation of the mode of economic development and promote the upgrade of sectoral structure. The report of the 19th National Congress (http://www.china.com.cn/ cppcc/2017-10/18/content_41752399.htm) stressed that it was a pivotal stage for transforming China’s growth model, improving economic structure, and fostering new drivers of growth. The studies of the relationship between economic structure and economic growth do not come into a systematic theory To address this issue, this paper took national level and 286 prefecture-levels data from 1997 to 2017 as empirical objects and examined the structural imbalances and their impacts on different stages and regions. The second part provided the internal logic of economic structure and economic growth; the third part described the variables and explained data; the fourth part presented the identification and test of economic structure and economic growth; the fifth part was the robustness test; the sixth part drew the conclusion
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