Appraising the Economic Growth Prospects of China’s Services Sector

China Report ◽  
2021 ◽  
Vol 57 (2) ◽  
pp. 131-150
Author(s):  
Uday Khanapurkar
Keyword(s):  
Economic Growth ◽  
Real Estate ◽  
Manufacturing Industry ◽  
High Growth ◽  
Gdp Growth ◽  
Demand Side ◽  
Services Sector ◽  
Growth Prospects ◽  
Manufacturing Growth ◽  
China’S Economy

This article examines the economic growth prospects of China’s services sector. Reportage on China’s economy and its data releases tends to focus largely on aggregate GDP growth, manufacturing growth, retail sales and investments, and fails to adequately cover services despite them being the largest contributor to growth. The article parses the growth of China’s various services subcomponents across a range of parameters and assesses that the industry has come under duress with a slowdown in complementary manufacturing and the dissipation of growth bubbles in finance and real estate. It is further observed that reforms necessary for spurring services growth are at a nascent stage, proceed slowly, and are imperilled by GDP growth targets that result in policies favouring the manufacturing industry. In sum, while China’s services growth prospects are hardly in dire jeopardy due to favourable demand-side conditions, achieving potential and affecting convergence with high income countries will necessitate the expedition of reforms and the engineering of a sustained high growth phase in the sector.

scholarly journals Macroeconomics of growth

2019 ◽  
pp. 59-91
Author(s):  
Deepak Nayyar
Keyword(s):  
Economic Growth ◽  
Degrees Of Freedom ◽  
Policy Instruments ◽  
High Growth ◽  
Supply Side ◽  
Demand Side ◽  
Macroeconomic Policies ◽  
Government Deficits ◽  
Inflation Rates ◽  
Investment Growth

Economic growth over fifty years in the Asian-14 has been stunning. Investment and savings, which rose rapidly, were the main drivers of growth. Education was also a sustained driver of growth on the supply-side. From the demand-side, growth was primarily private-consumption-expenditure led and investment led. The interaction between the supply-side and the demand-side suggests a virtuous circle of cumulative causation, where rapid investment growth coincided in time with rapid export growth, leading to rapid GDP growth. In macroeconomic management, the successful countries did not follow orthodox prescriptions of balanced budgets and price stability. Their primary macroeconomic objectives were economic growth and employment creation. Their macroeconomic policies were also more versatile in their use of policy instruments. Their success in maintaining high growth rates increased their degrees of freedom, which enabled them to finance government deficits and raise sustainable levels of government borrowing, while making higher inflation rates politically more acceptable, which would not have been possible if economic growth was slow.

How Chinese executives view economic challenges and global opportunities

2017 ◽  
Vol 45 (3) ◽  
pp. 30-37 ◽  
Author(s):  
Steven Davidson ◽  
Wei Ding ◽  
Anthony Marshall
Keyword(s):  
High Growth ◽  
Chinese Economy ◽  
Content Type ◽  
Services Sector ◽  
Government Sector ◽  
Start Up ◽  
Challenges And Opportunities ◽  
Growth Prospects ◽  
Lending Decisions ◽  
The Government

Purpose To better understand the challenges and opportunities facing China, the IBM Institute for Business Value in cooperation with Oxford Economics surveyed 1,150 executives from across China. Survey respondents represented a variety of industries and included executives from Chinese corporations, start-up enterprises, the government sector and educational institutions. Design/methodology/approach This report shares the executives’ vision for the Chinese economy, and proposes actions to help spark growth and positive change. Findings The Chinese executives surveyed see the current economic environment in China as encompassing five main challenges – immature services sector, declining domestic consumption growth, lending decisions creating over investment in some sectors, declining export growth and environmental issues impacting economic development. Practical implications The article identifies the six most important ways to accelerate China’s growth according to the executives: Originality/value Despite challenges, Chinese executives are optimistic about the country’s economic growth prospects. In fact, 93 percent of executives believe China will maintain stable to high growth of more than 5 percent over the next five years. And almost a quarter of them believe China will be able to return to its recent very high growth rates in excess of 8 percent.

scholarly journals Key Challenges in Economic Management of Pakistan

2006 ◽  
Vol 11 (Special Edition) ◽  
Author(s):  
Taufiq A. Hussain
Keyword(s):  
Current Account Deficit ◽  
High Growth ◽  
Fiscal Year ◽  
Gdp Growth ◽  
Economic Management ◽  
Services Sector ◽  
Real Gdp ◽  
Macroeconomic Imbalances ◽  
Gdp Growth Rate ◽  
The Impact

This paper points out that GDP growth is fundamentally on track although a little below the expected 7% target owing to commodity sector weaknesses. The rising trend in unemployment has been reversed over 2002-04. It is expected that longer trend growth over the decade will be over 6%. However, there are certain macroeconomic imbalances, the current account deficit, the widening savings-investment gap and inflationary pressures, that need to be managed. Pakistan’s economy continues to remain on a high-growth trajectory during the current fiscal year, though the real GDP growth rate for the year seems likely to be lower than the 7 percent target. The expectation of the slowdown, relative to the FY06 annual target, owes principally to the (estimated) weakness in the commodity producing sectors of the economy, the impact of which will be partially offset by an anticipated above-target performance of the services sector.

scholarly journals Productivity Dynamics: A Case of Pakistan

2021 ◽  
Vol 7 (2) ◽  
pp. 187-203
Author(s):  
Muhammad Nadeem Javaid ◽  
Gulzar Ahmed
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Returns To Scale ◽  
High Growth ◽  
Data Set ◽  
Services Sector ◽  
Agriculture Industry ◽  
Percent Contribution ◽  
Productivity Dynamics ◽  
Constant Returns To Scale

This study estimates the total factor productivity (TFP) for Pakistan at aggregate and sectoral level from 1982 to 2016 with a data set rebased at 2005-06. We employ actual returns to scale instead of the oversimplified assumption of constant returns to scale for measuring the TFP. Our results show that average economic growth during this period is 4.7 percent with 0.7 percent contribution from TFP. While, average TFP growth for Agriculture, Industry, and Services sector is 1.5, 4.6, and 4.3 percent, respectively. Besides, there is a noticeable decreasing trend in TFP as well as economic growth relative to 1980’s. Further, our analysis reveals that the physical and human capital contribution in productivity is quite negligible at aggregate and sectoral level. This implies that sizeable investments in human capital formation can further help the economy to attain high growth trajectory in the short to medium terms.

scholarly journals Structural change and economic transformation

2019 ◽  
pp. 92-114
Author(s):  
Deepak Nayyar
Keyword(s):  
Economic Growth ◽  
Structural Change ◽  
Structural Transformation ◽  
Weak Link ◽  
Economic Transformation ◽  
Supply Side ◽  
Demand Side ◽  
Services Sector ◽  
Productivity Increase ◽  
Growth Promoting

Development in Asia has been associated with a structural transformation of economies. In this process, economic growth drove structural change from the demand-side as incomes rose and production activities followed, while structural change drove economic growth from the supply-side as labour moved from low-productivity to higher-productivity activities. Such labour transfer between sectors was growth-promoting in earlier stages, while productivity increase within sectors was growth-promoting in later stages. There was an exit of labour from agriculture everywhere, while the services sector progressively became the largest employer, with the highest output-share, across Asia. The process of structural transformation remains incomplete. In many countries it is necessary to address the neglect of agriculture and renew the emphasis on manufacturing, just as it is essential to exploit the synergies between manufacturing and services. Economic growth cannot be sustained and structural transformation cannot be completed even if one of three sectors is a weak link in the chain.

China's Economy: Moderate Slowdown, Still Weaker Growth Prospects for 2012

2012 ◽  
Vol 04 (01) ◽  
pp. 14-28
Author(s):  
John WONG
Keyword(s):  
Economic Growth ◽  
Fast Growth ◽  
Leadership Transition ◽  
Growth Mode ◽  
Domestic Consumption ◽  
Original Target ◽  
Growth Prospects ◽  
Economic Growth Mode ◽  
China’S Economy

China's economic growth in 2011 slowed to 9.2% from the 10.3% of 2010 while inflation went up to 5.4%, well above the government's original target of four per cent. In 2011, China's economic growth mode changed from export- to domestic consumption-dominated, a development in line with government plans. For 2012, the outgoing leadership is likely to mobilise all available sources to maintain reasonably fast growth for the sake of a smooth leadership transition.

Eurogroup deal will do little for Greek GDP growth

2016 ◽  
Keyword(s):  
Economic Growth ◽  
Euro Area ◽  
Gdp Growth ◽  
Economic Uncertainty ◽  
Short Term ◽  
Fiscal Discipline ◽  
Foreign Investors ◽  
Debt Sustainability ◽  
Content Type ◽  
Growth Prospects

Significance The negotiations with Greece's creditors revealed fundamental disagreements in lenders' views on the sustainability of Greece's debt and failed to address the drivers of future economic growth, once again concentrating almost exclusively on fiscal discipline. In the short term, the deal helps lift economic uncertainty and gains room to manoeuvre. The fact that debt relief measures were put on the table handed a domestic political victory to the ruling Syriza party. Impacts The IMF's drastic reassessment of debt sustainability and downward revision of Greece's growth prospects will deter foreign investors. Additional austerity measures will discourage already weak Greek 'ownership' of the programme, hindering reform progress. Polls suggest Greeks are slowly becoming more sceptical about participation in the euro-area.

Sources of Growth in India

2019 ◽  
pp. 1-34
Author(s):  
Laveesh Bhandari ◽  
Sumita Kale
Keyword(s):  
Economic Growth ◽  
Policy Change ◽  
Initial Conditions ◽  
Focal Point ◽  
High Growth ◽  
Services Sector ◽  
Electoral Outcomes ◽  
Time Periods ◽  
Differential Responses

Laveesh Bhandari and Sumita Kale study the underlying factors behind the acceleration in India’s economic growth and its puzzling structure. The services sector has been the engine of growth for the economy, with different sub-sectors taking the lead in different time periods as each responded to a policy change such as bank nationalization in the seventies, construction boom in the 2000s, et cetera. However, industrial reforms have not resulted in a sustained high growth due to constraints in land, labour and infrastructure. States have followed diverse trajectories, initial conditions in each leading to differential responses to central reforms. Growth and governance are now crucial for electoral outcomes, making them a focal point for the path ahead.

scholarly journals MAPPING OF POTENTIAL AND ECONOMIC GROWTH PATTERNS IN REDUCING THE INEQUALITY OF THE MOJOKERTO DISTRICT REGION

2018 ◽  
Vol 1 (2) ◽  
pp. 116-123
Author(s):  
Mohammad Wasil ◽  
Mohammad Wahed
Keyword(s):  
Economic Growth ◽  
Manufacturing Industry ◽  
Agricultural Sector ◽  
Growth Patterns ◽  
Economic Sectors ◽  
Location Quotient ◽  
Services Sector ◽  
Industry Sector ◽  
Trade Sector ◽  
Communication Sector

The purpose of this study is to analyze what economic sectors are potential to be used as development priorities and patterns of economic growth in the economy of Mojokerto Regency. The method used is: Location Quotient, Shift Share, and Williamson Index. From the analysis of the location quotient that falls into the category of the base sector are Agriculture, Clean Water & Water Sector, Building Sector, Transportation & Communication Sector, Financial Sector, Corporate Leasing & Services, and Services Sector. And the results of the shift share analysis show that the sectors with the fastest growth are the agricultural sector, mining & quarrying sector, manufacturing industry sector, and the trade sector, and the services sector. While the results from Williamson study show that the sub-districts that have the highest level of inequality are in Mojosari sub-district, Pungging subdistrict, and Kemlagi sub-district

scholarly journals The Nonlinear Interaction of Real Estates and Economic Growth in China

2019 ◽  
Vol 8 (2S6) ◽  
pp. 123-126
Keyword(s):  
Economic Growth ◽  
Real Estate ◽  
Interest Rates ◽  
Stock Price ◽  
Housing Prices ◽  
Chinese Economy ◽  
Gdp Growth ◽  
Volatility Clustering ◽  
Consumer Prices ◽  
Important Position

This paper provides a model for verifying the effects of real estate, because real estate industry has a fairly important position in the Chinese economy. This paper uses the nonlinear optimized techniques to estimate EGARCH(1,1)-GED model. Due to autocorrelation, kurtosis and volatility clustering, this paper adopt the EGARCH(1,1)-GED model. This paper uses monthly data of gross domestic products, housing prices, interest rates, exchange rates, consumer prices and stock price index, and the analysis period is 18 years from January 2000 to December 2017, The empirical findings are as follows. First, the rise in housing prices increases both the return and volatility of GDP growth of China. The empirical findings that changes in housing prices have a greater impact on GDP growth of China than changes in interest rates are consistent to prior studies. Second, we found that changes in new housing prices have a relatively greater impact on economic growth than changes in existing housing prices. This empirical result is a new one that has not been found in previous studies. Third, changes in real interest rates have a relatively greater impact on GDP growth in China than changes in normal interest rates. Fourth, in contrast to the significant impact of Beijing’s housing prices on economic growth, the housing prices in Hong Kong has shown insignificant impact on GDP growth in China. According to these findings, real estate development has an effect in the GDP growth of China. In light of the empirical results, China’s policy authorities should monitor the price trends of the new housing prices and make efficient management accordingly.

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