China’s Economic Growth Prospects: From Demographic Dividend to Reform Dividend

By Poncet, Sandra | China Perspectives, April 1, 2017 | Go to article overview

China’s Economic Growth Prospects: From Demographic Dividend to Reform Dividend


Poncet, Sandra, China Perspectives


Cai Fang, China’s Economic Growth Prospects: From Demographic Dividend To Reform Dividend, Cheltenham (UK), Northampton (MA, USA), Edward Elgar Publishing, 2016, 234 + XII pages.

Cai Fang is a demographer and economist, currently director of the Institute of Population and Labour Economics, Chinese Academy of Social Sciences (CASS). He is a member of the Standing Committee of the National People's Congress (since 2008) and author of many books and research articles on China's demographic transition and the reality of its growth process.

His book, China's Economic Growth Prospects: From Demographic Dividend to Reform Dividend, combines theoretical reflections and empirical work to analyse the engines of China's growth and to explain the deceleration underway. The argumentation highlights the existence of a demographic dividend, the source of a sea of workers behind China's industrialisation and development process until recently. The book's main aim is to signal the end of this demographic dividend, portending the evaporation of China's comparative advantage based on low-cost work and the inevitable slowing of the growth rate. The various chapters discuss the main challenges China has to face so as to avoid getting stuck in the so-called middle income trap and to eventually join the league of rich nations.

The reflection covers different themes at the heart of the author's expertise, such as ageing population, labour's contribution to growth, migratory flows, income inequality, and quality of education, for which theoretical argumentation and corrected official figures are mobilised. The rich and at times technical discussion envisages unavoidable adjustments and perilous conditions. The rest of the book analyses rebalancing of growth, from a model drawing on an accumulation of factors (labour and public investment) and export of low-quality manufactured goods, towards a process based on innovation and domestic consumer demand, especially for services. The chapters on recommendations and policies and on pitfalls to avoid are particularly interesting, especially given the author's proximity to the authorities. The discussion implicitly deals with the difficulty of abandoning China's traditional policy of macro-economic support such as its industrial policies, regional strategies, and stimulus packages in favour of those that would actually boost modernisation of the industrial structure and innovation.

The book is divided into 12 thematic chapters. At about 15 to 20 pages each, they offer a persuasive analysis of the sources of growth deceleration, the risks to be overcome if China is to become a developed economy, and different proposals for economic policies to get there. The analysis often refers to the experience of China's neighbours, such as South Korea and Japan.

The first six chapters discuss the relevance for China of the dual sector development theoretical framework and demonstrate Chinese specificity when it comes to demography's contribution to economic growth. Chapter 1 sets the scene, describing the advantage of lagging behind economically while in a trajectory of catching up: borrowing, purchasing, and imitating technologies that already exist overseas makes for rapid growth, which however inexorably slows as the technological gap begins closing. China is nearing this crossroads. Chapter 2 turns to the theory of dual economy development characterised by a surplus of farm labour. In this model, workers' migration towards urban industry naturally fuels the industrialisation process and productivity gains. This engine, which worked full steam in boosting China's growth, is now nearly extinguished. Chapter 3 relies on recent detailed data to show that in the middle of the last decade, China reached what is called "the Lewis Turning Point," after which the extinction of surplus labour led to wage increases and contributed to growth deceleration. Chapter 4 describes the end of the demographic dividend linked to the reduction in the proportion of the working-age population, while Chapter 5 discusses the inexorably aging population. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

China’s Economic Growth Prospects: From Demographic Dividend to Reform Dividend
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.