State Capacity and the Sustainability of China’s Economic Growth

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Please cite the paper as:
&lquo;Andong Zhu, (2013), State Capacity and the Sustainability of China’s Economic Growth, World Economics Association (WEA) Conferences, No. 3 2013, Conference on the Inequalities in Asia, 27th May to 12th July 2013&rquo;

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Abstract

There has been growing concern over the sustainability of China’ s economic growth. The Chinese economy is excessively dependent on investment and exports, a pattern that has become increasingly unsustainable. The excessive dependence on investment and exports results from insufficient household consumption, which, in turn, reflects rising income inequality and inadequate provision of social welfare. The underlying cause has to do with the weakening of China’ s state capacity. Nevertheless, China’ s state capacity remains relatively strong and a strengthening of the state capacity will contribute to a more sustainable pattern of economic growth.


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