China’s Economic Growth Quality: Excess Production Capacity or Technological Progress?-质量院英文网
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China’s Economic Growth Quality: Excess Production Capacity or Technological Progress?

April 7, 2016

Xu Wenge and Gong Gang

Abstract: From the perspective of the measurements of excess production capacity and technological progress, this paper investigates comprehensively the China’s economic growth quality on the national and provincial dimensions. The results show that since 2000, the trends of the national and provincial capacity utilization and total factor productivity are similar, namely, capacity utilization is falling and the undervaluation of technological progress has increased. These results illustrate that the China’s economic growth pattern with high investment rate not only results in excess production capacity, but also promotes the technological progress. Therefore, in order to solve the excess production capacity and from dependence on technology import to independent innovation, the china must transform the previous pattern of economic development. At last, the paper puts forward to policy suggestions, i.e. the reducing of government intervention in social investment and the asymmetry information and expected deviation between enterprises.

Key Words: Economic Growth Quality; Excess Production Capacity; Capacity Utilization; Technological Progress; Total Factor Productivity