{"title":"Regaining China's Resource Reallocative Efficiency to Boost Growth","authors":"Fang Cai","doi":"10.1111/cwe.12456","DOIUrl":null,"url":null,"abstract":"<p>The structural changes that the Chinese economy has been experiencing since its working-age population began to decline pose challenges for its further growth. First, as it loses its comparative advantage in labor-intensive activities, the share of manufacturing in its GDP has shrunk. Second, unproductive enterprises that are reluctant to exit the market tend to seek policy protection, which leads to the immobility of resource allocation. Third, the reallocation of the labor force from the highly productive manufacturing sector to the low-productivity service sector leads to the degradation of resource allocation. The inadequate exploitation of the potential of resource reallocation implies that the decline in manufacturing is premature. It is therefore important to combine market competition policy, industrial policy, and social protection policy to stabilize the development of manufacturing.</p>","PeriodicalId":51603,"journal":{"name":"China & World Economy","volume":"31 1","pages":"5-21"},"PeriodicalIF":2.9000,"publicationDate":"2023-01-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"4","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"China & World Economy","FirstCategoryId":"96","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/cwe.12456","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 4
Abstract
The structural changes that the Chinese economy has been experiencing since its working-age population began to decline pose challenges for its further growth. First, as it loses its comparative advantage in labor-intensive activities, the share of manufacturing in its GDP has shrunk. Second, unproductive enterprises that are reluctant to exit the market tend to seek policy protection, which leads to the immobility of resource allocation. Third, the reallocation of the labor force from the highly productive manufacturing sector to the low-productivity service sector leads to the degradation of resource allocation. The inadequate exploitation of the potential of resource reallocation implies that the decline in manufacturing is premature. It is therefore important to combine market competition policy, industrial policy, and social protection policy to stabilize the development of manufacturing.
期刊介绍:
The bi-monthly China & World Economy was launched in 1993 by the Institute of World Economics and Politics, Chinese Academy of Social Sciences (CASS). It is the only English-language journal in China devoted to the topic of the Chinese economy. The journal aims to provide foreign readers with an objective, impartial, analytical and up-to-date account of the problems faced and progress made by China in its interaction with the world economy. Among its contributors are many distinguished Chinese economists from both academic and government circles. As such, it has become a unique window on China and is essential reading for all those concerned with China"s development.