Transition Mechanism Of China’s Growth

Recently, China’s per capita GDP just surpassed 20% of that of the United States, which equivalent to the level of the Asian four dragons in 1960 s, so how to continue to maintain rapid economic growth is the key issues for China to catch up with the developed countries in the future.This paper focuses on the transmission mechanism of economic growth in China based on the economic growth theory, particularly using Nancy Stocky(2012) model to study the interaction between technology gap and relative human capital in the developing countries. We can use to prove that there is substantial potential of rapid economic growth in china, by closing the country’s huge technology gap and high relative high human capital requirements via increasing TFP growth rate. We then put these variables into the model to explain the rapid growth rate in china during the period 1960-2011 and predict the growth rate during 2012-2022. The results indicate that rapid growth will happen in china in the following 10 years just lower the technology inflow barrier while keep the high human capital level.