The People\u27s Republic of China\u27s Potential Growth Rate: The Long-Run Constraints

We estimate the People’s Republic of China’s (PRC’s) potential growth rate in 2012 at 8.7% and at 9.2% for the average of 2008–2012, about the same as the average actual growth rate for this period. This rate is the natural growth rate, that is, the rate consistent with a constant unemployment rate and stable inflation. The PRC’s natural growth rate displays a downward trend since 2006, when it peaked at 11.1%. Probably the Great Recession has been an important factor, although we argue that there are other factors. We show that the PRC’s potential growth rate is not demand constrained, in particular by the balance of payments. The PRC’s potential growth rate is determined by the supply side of the economy, in particular by: (i) changes in the structure of the economy, in particular in the share of industrial employment; (ii) the working-age population; (iii) the share of net exports in gross domestic product (GDP); (iv) export growth; (v) the share of foreign direct investment (FDI) in GDP; and (vi) human capital accumulation

Environmental Kuznets Curves in the People’s Republic of China: turning points and regional differences

This paper examines the relationship between economic growth and environmental sustainability in the People’s Republic of China by empirically estimating environmental Kuznets curve (EKC) models using provincial-level panel data from 1985 to 2005. The results show that there exists an inverted-U shaped relationship as hypothesized by the EKC model between per capita income and per capita emissions (or discharges) in the cases of waste gas from fuel burning and waste water, with a turning point at per capita gross domestic product of $12,903 and$3,226, respectively, in 2005 purchasing power parity terms. This relationship does not hold in the case of waste gas from production or solid waste. The estimation results from the model allowing region-specific slope coefficients show that the EKCs of the more developed coastal region have a flatter rising portion with turning points occurring at a higher income level than those of the less developed central and western regions. The paper argues that this may reflect technology diffusion and leapfrogging and institution imitation across regions at different stages of development. Policy implications of these findings are discussed.environmental kuznets curve; EKC; China; economic growth; environmental sustainability

Environmental Kuznets Curves in the People’s Republic of China: turning points and regional differences

This paper examines the relationship between economic growth and environmental sustainability in the People’s Republic of China by empirically estimating environmental Kuznets curve (EKC) models using provincial-level panel data from 1985 to 2005. The results show that there exists an inverted-U shaped relationship as hypothesized by the EKC model between per capita income and per capita emissions (or discharges) in the cases of waste gas from fuel burning and waste water, with a turning point at per capita gross domestic product of $12,903 and$3,226, respectively, in 2005 purchasing power parity terms. This relationship does not hold in the case of waste gas from production or solid waste. The estimation results from the model allowing region-specific slope coefficients show that the EKCs of the more developed coastal region have a flatter rising portion with turning points occurring at a higher income level than those of the less developed central and western regions. The paper argues that this may reflect technology diffusion and leapfrogging and institution imitation across regions at different stages of development. Policy implications of these findings are discussed

Modernisation and son preference

Gaps in welfare attainment between boys and girls in China have attracted international attention. In this paper demand analysis is used to try and uncover the factors which may be driving the emergence of the gender gaps. Drawing on household expenditure data from a poor (Sichuan) and rich (Jiangsu) Chinese province we are able to test for different types of gender bias in intra-household allocation. Spending on health is found to be biased against young girls in the poor but not in the rich province, whereas there is a bias in education spending against older girls in both provinces. These biases in household spending were found to correspond to gender biases in mortality and enrolment outcomes as revealed in census data for the same year. Split sample analysis reveals that poorer, less diversified households exhibit stronger biases against girls. Taken together, the results suggest that son preference in rural China is not driven solely by cultural factors pointing to a potential role for public policy

Urbanization and Inequality in Asia

WP 2013-08 January 2013JEL Classification Codes: D63; N35; O53; R2