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GTAP Resource #6863

"Decomposing Chinas Economic Growth from 2012 to 2019 - An Applied CGE Analysis"
by Peng, Xiujian and Philip Adams

This paper focused on using the decomposition function of the CHINAGEM model to decompose China’s economic growth from 2012 to 2019. To do so, we have to conduct a historical simulation to estimate the changes in the factors such as technology, twists and preferences variables, which contributed to China’s economic growth. Using the estimated results of these variables, we then run the decomposition simulations individually and explain the effects of each variable on the macro economy. In the end, we decompose the effects of these variables on China’s economic growth during this period by a cross-column analysis.

We notice that technology improvement, cost-neutral change towards capital and employment growth are the main factors that contributed to China’s remarkable growth over the period from 2012 to 2019, among which technology improvement is the most important factor. This finding is particularly useful for the policy maker given the backdrop of China’s labour force has started to decline since 2018.

The increased export demand for China’s products from the rest of the world and the strong preference change towards domestically produced goods also made a considerable contribution to China’s economic growth, though the latter is the main reason for the decline in China’s trade relative to GDP in the period 2012-2019.

The faster growth of consumption relative to GDP is the main feature of the Chinese economy during this period. The Chinese government’s strategy of stimulating domestic consumption to grow is the main answer to this feature.

Resource Details (Export Citation) GTAP Keywords
Category: Other CGE Application
Status: Not published
Date: 2023
Created: Peng, X. (4/12/2023)
Updated: Batta, G. (5/8/2023)
Visits: 275
- Advances in quantitative methods
- Economic growth
- Technological change
- Asia (East)

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