KDI Journal of Economic Policy

  • 제46권1호
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  • Pages.1-19
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  • 2024
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  • 2586-2995(pISSN)
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  • 2586-4130(eISSN)
한국개발연구원 (Korea Development Institute)
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China's Slowdown

  • 투고 : 2023.11.07
  • 발행 : 2024.02.29
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초록

This paper evaluates explanations for China's growth slowdown. The natural tendency for rapidly growing economies to slow down is a major factor, along with problems bequeathed by unbalanced growth, including a declining ICOR, slowing total factor productivity growth, and rising indebtedness. A number of other mechanisms are of lesser importance: demographics, President Xi's centralization of political power and anti-corruption campaign, and U.S. export controls. Sustaining growth in the longer term will require China to step away from investment, debt and export-fueled growth in favor of a balanced growth model with household consumption playing a larger role. Doing so will require hardening of the budget constraints of regional and local governments and restructuring of the nonperforming debts of property and construction companies.

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