Maria Jesus Herrerias

Is the Export‐led Growth Hypothesis Enough to Account for China's Growth?

One of the missing pieces preventing us from understanding recent Chinese economic development is the role played by openness and capital accumulation in this process. The question is whether the sharp economic growth that the Chinese economy has experienced is another case of export-led growth due to the open-door policy or whether, on the contrary, this growth has been caused by high domestic savings and investment rates (and the consequent capital accumulation). To answer this question, we employed an empirical framework of the cointegrated vector autoregressive model. The empirical results show that both investment (in physical capital and R&D) and exports, as well as the exchange rate policy, are relevant factors in explaining Chinas long-run economic growth over the past 4 decades.

The Driving Forces Behind China's Growth

The main objective of this article is to disentangle the determinants of the Chinese economic growth that occurred from 1965 to 2000. We have explored, first, the time series properties of the growth rates of gross domestic product and labour productivity with an extended battery of unit-root tests. Then, in a multivariate setting, we use the VAR model methodology to provide evidence that physical and human capital accumulation, R&D expenditure, openness and competitiveness are the main drivers of output, labour productivity and total factor productivity growth in the long run. Additionally, we also show that although China has not yet converged to its long-run equilibrium, it is in the process of catching up. These results are more consistent with some versions of the endogenous growth models than with Solow-type models of growth, since they support active strategies of economic policy to stimulate economic growth and catching up with more advanced economies.

Testing Stochastic Convergence across Chinese Provinces, 1952-2008

Herrerías M. J. and Ordóñez Monfort J. Testing stochastic convergence across Chinese provinces, 1952–2008, Regional Studies. This paper analyses stochastic convergence across twenty-eight Chinese provinces over the period 1952–2008 using unit root tests that take into account structural breaks and non-linearities. The results suggest a significant degree of convergence in capital intensity, labour productivity and total factor productivity in Chinas provinces. However, the findings also reveal that provinces located in coastal areas of China have benefited from the economic reforms more than the central and western regions and have created small regional clusters.

Regional Electricity Consumption and Economic Growth in China

The success of economic reforms in China, initiated at the end of the 1970s, as measured by economic growth, was driven mainly by the promotion of capital accumulation and openness (Herrerias and Orts, 2011). In recent years, while the majority of Occidental economies were suffering the consequences of the global crisis, the Chinese economy grew 10.3 per cent in 2010 and, on average, 10.92 per cent from 2003 to 2010, making a significant and steady contribution to the dynamism of world economic activity (see Figure 8.1(a) and 8.1(b)). However, at the same time economists have questioned the sustainability of this fast economic growth, the growth model promoted by the government and the possible consequences. The strong dependence upon external demand, income inequalities, and environmental damage are almost ignored and left unresolved by the government. While it is true that some efforts have been made, with little success, in terms of the promotion of internal demand and inequality, energy and environmental policies were totally forgotten until the 11th Five-Year Plan (2006–10). In this plan, China, committed to achieve a green economy, aimed to increase consumption of renewable energy sources and prevent environmental pollution by increasing environmental investment by 1.33 per cent of GDP by 2009.

Stochastic Regional Convergence in China: The Role of Regional Clusters in a Nonlinear Perspective (1952–2007)

This paper investigates the notion of stochastic convergence behaviour across the Chinese provinces. Unlike previous works, the present paper takes into account the economic geography by examining the regional clusters and the significant transformation of the Chinese economy through the introduction of structural breaks and nonlinearities in the model. Results indicate that the regional clusters are relevant to the convergence behaviour across China, when both the administrative division and the regional clusters are considered. However, the number of provinces that are converging is higher in the latter case. When nonlinearities were considered across the regional clusters, we found that 18 provinces have already converged with their cluster, 3 provinces are catching up and 10 regions show divergence. These findings are useful for the design and development of national and regional economic policies in the Chinese economy.