Analysis Of China’s Economic Growth Since Reform And Opening Up

Since the reform and opening up,China’s economy has continued to grow rapidly,and has become the world’s second largest economy and a miracle of world economic development from a developing country with poor productivity.However,after 2007,the rapid growth of China’s economy came to an abrupt end and China’s economy entered the "new normal".On the other hand,with the rapid increase of capital stock,China’s output-capital ratio shows a trend of continuous decline.Since the reform and opening up,Chinese economy seems to show the characteristics of neoclassical growth.At present,it is widely believed that China’s economy has entered a "new normal".Based on the current economic situation,it is necessary to conduct a detailed investigation of China’s economic growth under an analytical framework suitable for China’s actual situation,explore the reasons for the slowdown of economic growth,understand the "new normal" of low growth,and answer the question of growth engines.Based on the time series data of China’s economic growth from 1978 to 2019,this paper makes a systematic neoclassical study of China’s economy since the reform and opening up from the perspective of neoclassical models,using the ARDL method which is more suitable for China’s small sample and single integer order inconsistency.First of all,this paper analyzes the process of China’s reform and marketization and the current situation of China’s economic growth since the reform and opening up,and finds out the characteristics and problems in the process of China’s economic development.Secondly,aiming at the main characteristics of neoclassical model,this paper empirically analyzes whether China’s economic growth has neoclassical nature by establishing ARDL model.Then,with the help of solow’s economic "stable state" facts and the core content of "Kaldor facts",the paper investigates whether China’s economy has reached a steady state.Next,this paper investigates the contribution changes of various economic growth factors to China’s economic growth since the reform and opening up through growth accounting,so as to explain the reasons for China’s economic growth slowing down from high speed in recent years and understand the nature of the "new normal".In addition,the paper analyzes the characteristics and causes of the fluctuation of China’s total factor productivity,further divides the technological factors into institutional change,structural transformation and scientific and technological innovation,and uses ARDL model to empirically analyze its long-term and short-term impact on the technological factors.Finally,this paper makes an empirical analysis of the economic convergence within and among China’s four major economic regions by using the time series analysis method.The research results of this paper show that:(1)Since the reform and opening up,China’s capital marginal productivity decline and investment rate have no growth effect on China’s economy in the long run,so China’s growth vigorously supports neoclassical growth theory.Therefore,it is suitable for China to investigate China’s economic growth under the framework of neoclassical economic theory.(2)China’s economy has not yet reached a steady state,but it is in the process of approaching the steady equilibrium adjustment path.(3)The reason why China’s economic growth has slowed in recent years is that:(1)The contribution of capital input to China’s economic growth is still the largest,but since 2008,the contribution of capital has decreased significantly.Under the limit of diminishing marginal productivity of capital,the convergence effect of growth brought by capital shortage has gradually dried up.(2)Labor input has the lowest contribution to China’s economic growth and has been declining since 2000.At the same time,China’s aging problem is increasingly prominent and serious,labor supply is weak,labor growth is slow while capital growth is fast,resulting in a rise in the capital-labor ratio,resulting in a decline in output efficiency and a slowdown in economic growth.(3)The contribution rate of TFP to economic growth is second only to that of capital.However,since 2008,the contribution of technological factors to economic growth has shown a trend of gradual rise.Although its driving force for economy is not as powerful as factor input in the short term,it is more persistent.(4)The fluctuation of TFP in China is closely related to the macroeconomic fluctuation.The main reason for the fluctuation lies in the reform of China’s economic system and the change of macroeconomic policies.In addition,institutional change,structural transformation and scientific and technological innovation all have significant positive effects on technological factors in both the long and short term,with structural transformation having the greatest impact,followed by technological innovation and institutional change.(5)In the long run,the eastern and central regions showed no convergence,while the western and northeast regions showed a convergence trend.In addition,there is no economic convergence between the four regions.As it turns out,investment has only short-term effects,technological progress is the engine of the economic growth in China,the Chinese economy growth has entered a new normal in which it is mainly investment-driven transfer to innovation-driven,therefore,the government should give full play to the technological factors of promoting effect on economic growth by promoting industrial structure upgrade,raising the level of marketization and increasing investment in r&d.In addition,the government should give full play to regional comparative advantages,guide the allocation of factor resources,and narrow regional development differences.