China’s Economic Prospects 2006 2020 Li Shantong.pptVIP

China’s Economic Prospects:2006 – 2020Li Shantong Growth Prospects for 2006 - 2020 Areas of uncertainty International Rise in protectionism Dollar crash Worsening terms of trade (cost of imports v. exports) Financial liberalization leading to volatility Domestic Savings patterns of aging of population Persistent rural poverty Sluggish employment generation Shortage in strategic resource reserve and environmental capacity will be of increasing constraints to economic growth 2005-2020 Population Growth 2000-2020 Population Growth The Challenges of Economic Development in the Future The Challenges of Economic Development in the Future Model Dimension 34 production sectors and 2 representative households 1 agricultural sectors, 24 industrial sectors, 9 service sectors, 2 representative households by rural and urban 5 production factors agricultural land, capital, agricultural labor, production worker, and professionals Emission of Pollutant SO2, NOX,TSS, Soot Recursive Dynamics The benchmark year: 2002 Factor growth and accumulation Labor and land growth Capital accumulation Change in productivity Business-as-Usual Labor moves from agriculture to non-agricultural sectors at the rate of 1.21 percent per year Technological and intermediate input changes continue the trend of recent years Total factor productivity (TFP) growth follows the pattern of past 25 years, at 2.0-2.5 percent Optimistic Scenario Labor moves from agriculture to non-agricultural sectors at the rate of 1.36 percent per year Technological and intermediate inputs reflect increased demand for service and high technology goods; the rate of value-added increases TFP growth rate of service sectors is 1percent higher than BAU in 2005-2010 and 0.5 percent higher in 2010-2020 Energy utilization efficiency is 0.2-0.5 percent higher than BAU Risk Scenario Labor moves from agriculture to non-agricultural sectors at the rate of 0.91 percent per year Household saving rate is lower than BAU TFP growth ra