During the period of economic transition, China's financial development and economic growth

Author: Fan Desheng
Publisher:
Publish Date: 2006-08-01
Features: China's economic transition process fully considers its national conditions and strategic goals, balancing reform, development, and stability. Under the premise of coordinating various interests and avoiding major social unrest, the market-oriented reforms have been gradually implemented. A high capital formation ratio has always been a key factor in China's economic development, requiring the country to maintain a high capital formation ratio throughout its market-oriented reforms. This is the fundamental constraint for the Chinese government when formulating financial policies during the economic transition period. Since the economic transition, China has achieved remarkable growth performance, the primary reason being the sustained growth of the public economy sector since the transition. This stands in stark contrast to the severe "L"-shaped recession observed in other countries undergoing economic transitions. This indicates that since the economic transition, the public economy sector has been the main driver of national investment, employment creation, and technological innovation in China. Therefore, to explain the miracle of China's economic growth since the transition, it is necessary to elaborate on the capital formation of the public economy sector and provide a theoretical explanation for its sustained output growth.