Balancing China's Economy

24th CEA (UK) and 5th CEA (Europe) Annual Conference. 30-31 August 2013, The Hague.

Three decades of economic reform and opening up have laid a basis for China’s economic prosperity. China started from a low level of income and high levels of poverty in the early 1980s  but through unprecedented growth re-emerged as a prosperous economy. The Chinese government did not only ‘open the door’ to inward foreign investments but also promoted a ‘going out’ strategy. The past three decades have strengthened China’s international competitiveness and many Chinese companies have seen either the limitations of the domestic market or the attractiveness of foreign markets. However catching up has been at breakneck pace  with substantial economic and social transformations. Recent uprisings of workers demanding higher wages, unsustainable growth with severe environmental consequences and a rigid financial system, indicate that it may be difficult for China to maintain its position as the world’s low-cost manufacturer. Rather, a shift may be necessary from export-dependence towards domestic development and consumption, and moving up on the global value chain and upgrading of industrial infrastructure. China’s economic development led to imbalances in the economy which ask for adjustment of long term structures rather than a quick change in economic policy.

The fact that some of these imbalances have been acknowledged in the 12th Five Years Plan is however no substitute for a thorough examination of those factors which might impede sustainable development in the future. Within the overall theme of the conference we particularly invite papers that investigate one or more of the challenges to China’s economy and continued economic growth:

  • Middle income trap

  • Low domestic consumption

  • High savings rate

  • Unequal income distribution

  • Lack of independence of the financial sector

  • Unsustainable use of natural resources (energy, water, land)

  • Dominance of manufacturing and export-processing

  • Dependence on low and medium-level technology

  • Ill-functioning markets

  • Lack of transparency of fiscal and budgetary systems

  • Strongly decentralized administration

  • Ageing and upgrading of a shrinking workforce

  • Brain drain and brain gain

  • Unemployment of the highly educated

Some of these areas remain under-researched, while others lack a solid micro-economic base for research. Many of these challenges are beyond the scope of ‘pure’ economic reasoning and require research that includes institutional analysis, political economy, or a firm-perspective. We therefore in particular invite applied micro-economic research which aims at modelling and testing the behaviour of firms, families or social groups.

Last Modified: 13-02-2013