Economic Reform in the Peoples Republic of China: Resuscitation or Transformation
Richard Fey, Alan Zimmerman
In 1978 Deng Xiaoping brought economic reform to the People's Republic of China. Using modern growth theory to assess the success of the Chinese reforms and the likelihood of continuing economic progress, we find a transformation in total factor productivity (TFP) growth unparalleled in recorded economic history. Moreover established growth economics finds that TFP growth, once established tends to persist at the same rate over long periods of time. While the death of Deng left a vacuum in political leadership, his reforms, crafted with great ingenuity, combined with political change limited to the bare minimum necessary, appear to have established the groundwork for continued growth. Still, a number of policy issues will need to be addressed by the Chinese government if that growth is to be achieved.