China’s GDP Growth Decomposition: 1952-2005. Economic

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China’s GDP Growth Decomposition: 1952-2005
Table 1
Period

GDP growth

Fixed Capital

Labor

Human capital

TFP

1955-1965

3.80%

5.20%

1.40%

2.00%

0.40%

1966-1976

4.20%

7.50%

2.40%

3.10%

-0.80%

1978-1990

8.90%

8.30%

3.00%

3.90%

3.20%

1991-1999

10.60%

10.40%

1.10%

1.70%

5.10%

2000-2005

9.50%

12.60%

1.00%

1.80%

3.10%

GDP growth driven by capital stock, labor, human capital and TFP

Contribution to Measured GDP Growth from


Period

Fixed Capital

Labor

Human capital

TFP

1952-1978

54.0922

0.00%

31.0379

14.8700

1952-1957

12.7809

0.00%

14.8433

72.3758

1957-1978

69.3933

0.00%

37.0361

-6.4294

1978-2005

43.6934

0.00%

16.2027

40.1039

1978-1995

37.5241

0.00%

19.2734

43.2025

1995-2005

55.0142

0.00%

10.5678

34.4180

Contribution to Measured GDP Growth from capital stock, labor, human capital and TFP

Contribution to Measured GDP Growth from


Period

Fixed Capital

Labor

Human capital

TFP

1955-1965

59.7649

0.00%

30.8775

9.3576

1966-1976

77.0830

0.00%

41.5284

-18.6114

1978-1990

39.8138

0.00%

24.6520

35.5342

1991-1999

42.4481

0.00%

9.3248

48.2271

2000-2005

57.1022

0.00%

10.6205

32.2773

In the period 1955-1965, there was a 3.80% growth rate, and the growth increased at a higher rate from then on. During the Maoist regime (1948-1976), China was mainly underdeveloped and the agriculture-based economy grew gradually, but still there was low economic development. The Chinese Communist leader Mao Zedong focused on a socialist economic and political structure eliminated the role of private businesses in the economy and private property. The evolution of Chinese economic growth is closely linked to the political and economic institutions that have been either been open to the world or isolationist. There was emphasis on public ownership as a means of production to transform the agricultural sector and industry
The Great Leap Forward from 1958 and 1962, which was also the second five-year plan, was meant to preserve Chinese Communism and remove all traces of capitalism in the country. However, the economic reforms to make China a communist system rather than a socialist system were a failure, as the policies were ineffective in leveraging the high labor abundance to grow the economy and there was famine. There was readjustment in 11963-1965 where there was focus on strengthening the weak economic links and meeting the consumers demand and not merely to increase the gross output.
In the p...