This book argues that China’s rapid industrialization since 1978 can be attributed to its rediscovery of the secret recipe of the original Industrial Revolution. The secret recipe is not based on institutional changes per se but rather the sequential creation of mass markets to support mass production. Market creation requires a strong state and appropriate industrial policies because mass markets are a public good that is extremely costly to create and can only be created through stages and under enormous political stability and social trust.
Although studies on economic inequality and intergenerational mobility have gained traction in the last decade, little is known about the temporal changes in the intergenerational association of economic status, especially in developing and transitional economies. We find an increasing pattern in intergenerational income persistence across China’s transitional period. To promote intergenerational mobility, the Chinese government should continue to remove rural-urban migration barriers and initiate various programs to subsidize the education of children from disadvantaged families, known as the “left-behind” children.
Since 2010–2011, China’s economy has slowed considerably, raising concerns that the country could fall into the so-called “middle-income trap” (MIT). Obviously, an MIT in China would have serious negative consequences not only for the Chinese population but also for the world economy as a whole. We examine whether China is or will be in an MIT by focusing on the empirical MIT definitions and the MIT triggering factors identified in the literature. We show that dependent on the choice of MIT definition, different MIT statements can be derived. Our triggering factor analysis reveals that while China performs quite well regarding its export structure, it must improve human capital accumulation and total factor productivity to avoid falling into an MIT.
Are China's official GDP growth number exaggerated? Hunter Clark, Jeff Dawson and Maxim Pinkovskiy from the New York Fed and Xavier Sala-i-Martin from Columbia University use satellite measurements of the intensity of China’s nighttime light emissions to proxy for GDP growth. Their estimate of Chinese GDP growth, since 2012, was never appreciably lower, and was in many years higher, than the GDP growth rate reported in the official statistics.
The Chinese economy had spectacular growth in the past three decades, however the Chinese stock market had the worst performance among the major stock markets. Professor Franklin Allen from Imperial College, Professor Jun Qian from Fanhai International School of Finance, Fudan University, and coauthors offer their explanation of this puzzling divergence.