The Two Chinese Models of Development
Xiaonian Xu- Professor of Economics and Finance at CEIBS
RSVP required by 5PM March 12
SCID and SCP present a special seminar with Professor Xiaonian Xu
The Chinese economy has grown so fast and for so long. But the “miracle” has started fading in recent years. Why? Prof. Xu argues that the reform era can be divided into two fundamentally different phases. Phase I, from 1978 to the mid-1990s, is characterized by market-oriented reforms, whereas Phase II, from the mid-1990s onward, is dominated by government-led investment and interventions. Though China’s growth performance looks identical in numbers over the two phases, the source of growth has changed from efficiency gains to increased use of resources. Phase II growth is thus unsustainable, and worse, it has brought about structural distortions that severely undermine the economy’s growth potential. To maintain growth even at a moderate level, China needs to go beyond what the leadership has promised and planned.