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2017-07-22

Growth potential out of regional disparity in income?


Comments on Yang Yao and Mengqi Wang, Peking University, “Maximising China’s growth potential”, 21/07/2017



While I agree with the general point of this post, it should be pointed out that the statement that "Analysis shows that a region should grow more slowly at high levels of GDP per capita and more quickly at low levels" should be properly interpreted as a possibility to present a potential rather than inevitability or definite. Otherwise the world would not have the developed and developing regions/countries.

To realise that potential, there is a lot of hard and intelligent work involved. Such as those proposed by the authors, to be adopted and implemented by those involved and work hard for many years to come.

What assumptions are required for the follow statement: "the lower GDP per capita — but higher growth rate — of the inland provinces could actually increase China’s growth rate of GDP per capita by 11.7 per cent in the next 15 years." Alternatively, what would be the base case scenario?

The numbers presented in the following statements are or appear to be quite large: "Specifically, the central and western regions would respectively grow 4.7 and 4.8 per cent faster on average in the coming 15 years, leading to an average of 2.6 per cent increase in the national growth rate forecasted for 2016–30." Undoubtedly, technological will need to play a key role to realise those numbers as the author argued.

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