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Rebalancing China’s economic growth: some insights from Japan’s experience

One of the greatest challenges China faces is how to reshape its heavily investment-driven mode of economic growth. By investigating how the rebalancing of Japan’s economic growth mode was realized in the 1970s, we indicate that it is essential in the rebalancing to correct the distortions in the fa... Full description

Year of Publication: 2011-08-04
Authors: Muto, Ichiro; Fukumoto, Tomoyuki
Institutions: Volkswirtschaftliche Fakultät, Ludwig-Maximilians-Universität
Series: MPRA Paper
Subjects: China | Japan | Rebalancing | Factor Cost Distortion | Current Account Imbalance
Classification: jel-O11; jel-E25; jel-O53; jel-E22; jel-E21
Type of Publication: Book / Working Paper
Title record from database: RePEc - Research Papers in Economics
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Summary: One of the greatest challenges China faces is how to reshape its heavily investment-driven mode of economic growth. By investigating how the rebalancing of Japan’s economic growth mode was realized in the 1970s, we indicate that it is essential in the rebalancing to correct the distortions in the factor cost (labor cost and capital cost) in a harmonious way. In addition, we refer to Japan’s experience to indicate that achieving domestic rebalancing does not necessarily lead to external rebalancing.
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