From the Demographic Dividend to the Reform Dividend

Abstract

The key to creating another economic miracle on the back of sustained medium-high growth speeds is the deepening of supply side reforms. In the new normal of economic development, the aim of maintaining medium-high speed economic growth is not the simple achieving of some percentage point increase in the growth rate, but in the transformation of the drivers of growth. In this way, growth forecasts are met via productivity driven methods. The key to maintaining sustainable economic growth in China is to abandon the quest for inspiration from demand side policy measures, and also that of the analytical framework of the economic cycle, followed by the adoption of a supply side focus on factors driving the potential growth rate downwards. This starts from systemic barriers that impede the supply of factors of production, as well as increases in total factor productivity; and from which tap into new growth drivers via structural reforms, thereby raising the potential growth rate.