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China: stylized facts . PRESENTATION By Richard Herd Head Asian non-members Unit OECD Economics Department March 2006 OECD Development Centre Conference “China, India and Africa”. Growth has been very rapid. GDP growth at constant prices. Three factors have boosted growth: .

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China stylized facts

China: stylized facts

PRESENTATION By Richard Herd

Head Asian non-members Unit

OECD Economics Department

March 2006

OECD Development Centre Conference

“China, India and Africa”


Growth has been very rapid
Growth has been very rapid

GDP growth at constant prices


Three factors have boosted growth
Three factors have boosted growth:

  • Reform of the economic environment

  • Capital formation

  • Structural change



Prices are now market determined

Prices are now market determined

Share of price regulated transactions for industrial products


The economy has opened to foreign trade
The economy has opened to foreign trade

Average of exports and imports as % of GDP



The number of state firms has fallen rapidly

The number of state firms has fallen rapidly

Share of Industrial sector Firms


The private sector output skyrockets

The private sector output skyrockets ….

Constant prices gross output


And is more productive
…… and is more productive …

Excess productivity of firm types relative to direct state ownership


Dominating exports
….. dominating exports …

Note: These industries represent 75% of export value in 2003.

Source: NBS industrial microdata


And is now bigger than public sector
… and is now bigger than public sector

Private sector value added as per cent of sector GDP


Rapid growth of capital
Rapid growth of capital

  • Fixed capital formation has accounted for half of growth

  • Human capital expanding rapidly


The capital stock has grown fast
The capital stock has grown fast

Annual Per cent change in estimated capital stock



Fiscal policy has been prudent
Fiscal policy has been prudent

Budget balance % of GDP

Per cent of GDP


With little recourse to public debt
With little recourse to public debt

Budget balance as Per Cent of GDP


Factors behind the growth in real income
Factors behind the growth in real income

Share of growth attributable to each factor


Educational output has surged

Educational output has surged

  • Primary education almost complete

  • Junior high very good

  • University intake tripled


And is likely to continue growing
And is likely to continue growing

Proportion of age group receiving given education level

Source: Ministry of Education


Third factor structural change

Third factor: structural change

  • Move from agriculture

  • Source of productivity growth


Significant growth from sectoral change
Significant growth from sectoral change

Productivity growth from structural change, five year average

Per Cent per year

% per year


Important micro economic structural reforms needed

Important micro-economic structural reforms needed

  • Financial markets

  • Basic economic laws need improvement

  • Labour markets need to be freer


Better basic laws for the private sector needed

Better basic laws for the private sector needed

  • A new company law is needed

  • A new bankruptcy law

  • A better anti-monopoly law also required

  • Laws to implement Constitutional Amendments


Enforcement of commercial laws needs improving

Enforcement of commercial laws needs improving

  • Difficult to obtain and enforce IPR judgements

  • Evidence of local prejudice in judgements

  • Creates barriers to innovation and expansion

  • Move to more central funding of judiciary

  • Separate courts for commercial law


Reducing regional inequalities
Reducing regional inequalities

  • Urbanisation is a positive factor for development

  • Migration has been restricted

  • Boosts spatial income inequality

  • Complex group of policies needs changing


Contact details

Contact details

  • [email protected]

    • http://puck.sourceoecd.org

    • www.oecd.org


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