Research On The Okun' Paradox In China: From Chinese Dual Economic Structure

According to the Okun's Law, when the economic growth is high, the unemployment will be relieved. But China has maintained a high economic growth rate since it was established, meanwhile, the unemployment in China has become increasingly serious in recent years. This situation runs counter to the Okun's Law on the surface.However, the use of the Okun's Law is restricted to the economic conditions of a country. China has its especially of dual economy system and transition, it must be very cautious when we apply the Okun's Law to our county.In China, the labor supply is unlimited. This paper examines the characteristics of China's actual economic operation at the beginning. Because of capital-driving economy, the economic growth cannot bring as much job positions as before. Moreover, the labor force participation rate in China is much high, which makes the increase of the employment rate much harder. Finally, based on the dual economy theory, the Okun's Law is modified.To sum up, the economic growth and employment in China does not contravene the Okun's Law. In recent years, the unemployment is increasing serious, that's because the efficiency of capital is decreasing. At present, China can no longer rely on the input of productive elements, and should transfer the economic motivate to technology.