What Makes China Grow?

Abstract

China has made tremendous progress in its economic development since it began its economic reform and opened to the world in 1978. It is currently the fastest growing economy in the world — averaging 9.7% per annum over the past 36 years (even though it has begun to slow down, to around 7% year-on-year growth). It is, however, historically unprecedented for an economy to grow at such a high rate over such a long period of time. Why has China been able to do so? What makes China grow? Will China be able to continue to grow at such a high rate in the future? The Chinese economic fundamentals, the Chinese initial conditions in 1978, as well as the economic reform policies and measures adopted and implemented by China are examined and analyzed. Long-term development of the Chinese economy is also assessed and long-term forecasts are generated and reported.