An Empirical Study on the Relationship Between China's Human Development and Economic Growth (1978-2003)

Abstract

This paper conducts an empirical study by province level data to analyze the relationship between China's human development and economic growth. The results of this study show that improvements of human development are followed by faster economic growth and influences of human capital derived from the improvements on growth can be more significant if there are some complementarily functional conditions, such as trust and fine market mechanism. Moreover, economic growth can also promote human development, especially in the regions with more trust and higher power of market forces. This evidence implies that, in a new development stage, it is necessary to implement a new development strategy that focuses on human development, which can accelerate economic growth and improve development performance of our society.