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Frontiers of Economics in China

ISSN 1673-3444

ISSN 1673-3568(Online)

CN 11-5744/F

Postal Subscription Code 80-978

Front. Econ. China    2018, Vol. 13 Issue (2) : 147-170    https://doi.org/10.3868/s060-007-018-0011-0
Orginal Article |
Conquering China’s Unbalanced and Inadequate Development: Macroeconomic Outlook, Policy Simulations, and Reform Implementation—A Summary of Annual SUFE Macroeconomic Report (2017–2018)
Kevin X. D. Huang1(), Lei Ning2(), Guoqiang Tian3()
1. Department of Economics, Vanderbilt University, Nashville, TN 37235, USA; Institute for Advanced Research, Shanghai University of Finance and Economics, Shanghai 200433, China
2. Institute for Advanced Research, Shanghai University of Finance and Economics, Shanghai 200433, China
3. School of Economics and Institute for Advanced Research, Shanghai University of Finance and Economics, Shanghai 200433, China; Department of Economics, Texas A&M University, College Station, TX 77843, USA
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Abstract

Leaving year 2017 China’s macroeconomy is continuously characterized by unbalanced and inadequate development. Whereas some aggregate indicators have shown improvement over the year, the cumulative growth rates in consumption and fixed asset investment have continued their downward trajectories. Worsening income inequality and resource misallocations, both between secondary and tertiary industries, and within the latter, pose serious challenges, let alone the systemic risk associated with the flourishing shadow banking system, rapid credit growth and debt overhang that weigh on the Chinese economy like the Sword of Damocles. This summary report highlights both the status quo and the consequences of the unbalanced and inadequate development embodied in China’s persistently distorted economic structure, and the role of deepening reforms of the institutions and governance in resolving the problems. Our analyses based on IAR-CMM model provide a unified framework for addressing China’s short-, medium-, and long-term issues in an internally coherent manner. Looking into year 2018, our benchmark projection of real GDP growth rate is 6.7% (6.41% using more reliable rather than the official data). Alternative scenario analyses and policy simulations are conducted to reflect various aspects of the economic challenges in the short to long runs. Through the lens of these analyses we conclude that rule-of-law based and market-oriented structural reforms should continue to hold a center stage in China’s transition from a phase of high-speed but unbalanced growth, to a stage of balanced and adequate high-quality development.

Keywords unbalanced and inadequate development      macroeconomic outlook      alternative scenario      policy simulation      systemic risk      reform     
Issue Date: 02 May 2018
 Cite this article:   
Kevin X. D. Huang,Lei Ning,Guoqiang Tian. Conquering China’s Unbalanced and Inadequate Development: Macroeconomic Outlook, Policy Simulations, and Reform Implementation—A Summary of Annual SUFE Macroeconomic Report (2017–2018)[J]. Front. Econ. China, 2018, 13(2): 147-170.
 URL:  
http://academic.hep.com.cn/fec/EN/10.3868/s060-007-018-0011-0
http://academic.hep.com.cn/fec/EN/Y2018/V13/I2/147
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