China's Great Ascendancy and Structural Risks: Consequences of Asymmetric Market Liberalisation

21 Pages Posted: 4 Jun 2010

See all articles by Yiping Huang

Yiping Huang

Peking University, National School of Development

Abstract

China's great ascendancy from a poor agrarian economy to an economic superpower is unprecedented. But in the process, structural imbalances, resource inefficiency, and income inequality worsened rapidly. It is argued that the coexistence of China's extraordinary growth and serious structural risks are two sides of the same coin: asymmetric liberalisation of product and factor markets. Distortions in markets for labour, capital, land, energy, and the environment lower production costs, increase corporate profits, raise investment returns, improve the international competitiveness of Chinese goods, and therefore lift China's growth. But they also depress consumption. China needs to accelerate factor market liberalisation in order to complete the transition to a market economy and to lock the economy onto a more sustainable path.

Suggested Citation

Huang, Yiping, China's Great Ascendancy and Structural Risks: Consequences of Asymmetric Market Liberalisation. Asian-Pacific Economic Literature, Vol. 24, No. 1, pp. 65-85, May 2010, Available at SSRN: https://ssrn.com/abstract=1616320 or http://dx.doi.org/10.1111/j.1467-8411.2010.01250.x

Yiping Huang (Contact Author)

Peking University, National School of Development ( email )

No. 38 Xueyuan Road
Haidian District
Beijing, Beijing 100871
China

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