The Chinese Growth Miracle

This chapter provides a review of China's economic growth since 1978. Studying China's economic success may shed new light on the political economy of growth, the impacts of the ascent of large countries on the rest of the world, and the relationship between inequality and economic growth. The chapter starts with a review of the characteristics of China's economic growth and compares it with those of several similar economies. Then it shows how China's economic success has been created by innovative institutional arrangements as well as adherence to the policy advice prescribed by neoclassical economics. After that, the chapter describes China's export-led growth model and analyzes its causes and the structural imbalances associated with it. Lastly, the chapter presents data for income inequality in China and discusses how inequality may affect China's prospect of avoiding the middle-income trap.