The Theoretical And Empirical Research On China's Macroeconomic Structure Imbalances

Abstract:Looking back the past six decades of China's economic growth, we are delighted in rising abruptly of "Chinese dragon". After delight, we are always interested in the logic of this miracle:in the early30years (1949-1978), China implemented the strategy of heavy industry priority development which was characteristic of the factor distortions causing the resources misallocation. With this strategy, although in a short time China established the industrial system, but it also caused a huge "growth drag". After reform-opening up, relying on resource endowment advantage, China implemented development strategy of comparative advantage, which caused the sustained30years high growth. Continued rapid growth is certainly exciting, but behind this boom, there are more and more "unharmonious" factor-macroeconomic structural imbalances to emerge, which attracts the academic attention. Economic imbalances causing the resources misallocation is the performance of low quality of economic growth in China. When the pursuit of economic growth quality becomes the main theme of the China's future development, studying on the characteristic, reasons and mechanisms of China's macroeconomic structure imbalances is the logical root of this paper.This paper constructs analytical framework of China's macroeconomic structure imbalances and tries to explain the basic logic of this question, and also analyzes all levels of macroeconomic structure imbalances-imbalances of supply structure, demand structure and the structure imbalance between supply and demand. We find the following results:(1) with the dual constraints of the development stage conversion and institutional change, the performance of transition countries' macroeconomic structure imbalances is complicated. As the transition countries'"institutional disequilibrium" constraints, institutional information asymmetry exists in the long run, which causes huge adjustment costs. And it makes micro subjects lack the motivation and incentives of self-adjustment in the face of change, which leads to "development inertia". So the economic structure not in line with resources conditions still can continue to operate, which makes the problem of macroeconomic structure imbalances. Under this logical mechanism, China, as a distinct transition country, also faces the arrival of a new stage of development. The deficiencies in the macro and micro of China's economy make its continued evolution along the traditional development path, so that eventually resulting in low-locked phenomenon, which informs a variety of macroeconomic structure imbalances.(2)Through studying the whole China's macroeconomic structure imbalances, from the imbalance trend, this paper finds that the index of macroeconomic structure imbalance shows an upward trend. It means the macroeconomic imbalances in China is more serious; from the imbalance state, China's overall of macroeconomic structure, supply structure and demand structure are in the state of moderate imbalance.(3) Through analyzing the supply structure imbalance, demand structure imbalance and structure imbalance between supply and demand, we find that, in the long term relying on resources advantages, China brought in technology and implement the imitative innovation to achieve the technical progress in the beginning to the Opening-up. But nowadays because of the weakening of effect on imitative innovation, with the development inertia, China's technology supply mode is still imitative innovation. It means the path dependence of technology supply is forming, which makes the technology supply imbalance highlight. Technical constraints form the dilemma of industrial upgrading, which becomes deep-seated reason of the industrial structure imbalance. So the problem of surplus production is caused not only by the domestic institution, but also most by the constraints of industrial upgrading. Besides, the distortions of supply level, as well as the distortions of demand level with income distribution and short of security system consist of the dual constraints, which cause the structure imbalance between internal and external demand. In addition, due to lack of the China's long-term development mechanism, with the constraints promotion incentive of local government, China's public service supply structure also deviates from the long-term equilibrium.In conclusion, the purpose of this paper is to provide a logical framework for the self-consistent analysis of the China's macroeconomic structure imbalances, mainly exploring the basic path which leads from the imbalance of China's macroeconomic structure to balance. We believe that, to seek the problem of Chinese long-term development, we should be firstly based on the issues which have emerged and affected the sustainable development of China, then select the correct development strategy, roads and the right decisions of these issues, which will be the only way of across the "middle income trap" and developing a powerful country.