Economic Growth in China : Sources and Prospects

The performance of China's economy in the last thirty years is an ongoing debate. After the economic reforms in 1978, China has emerged as the fastest-growing major economy with an average annual GDP growth rate of 9.83%. Capital formation is the major driver to cause China's rapid growth and contributes 54.28% in total DGP growth in 2008. TFP growth plays the second important role to boost China's economic growth. Because of highly investment-driven economy pattern, China needs to faces three major challenges like structural imbalance, environment stains and income inequality. However, addressing the structural imbalance will be the key word in government economic growth plan. Traditional pattern of economic growth needs to be replaced if China wants to keep an efficiency growth in the future.