{
  "title": "China’s Productivity Convergence and Growth Potential—A Stocktaking and Sectoral Approach",
  "publication": "IMF Working Papers, November 27, 2019",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2019/11/27/chinas-productivity-convergence-and-growth-potential-a-stocktaking-and-sectoral-approach-48702",
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  "summary": "China’s growth potential has become a hotly debated topic as the economy has reached an income level susceptible to the “middle-income trap” and financial vulnerabilities are mounting after years of rapid credit expansion.",
  "sections": [
    {
      "heading": "Summary findings on convergence and sectoral patterns",
      "content": "- The paper analyzes productivity convergence across 38 industrial sectors and 11 services sectors.\n- China’s productivity convergence remains at an early stage.\n- The industrial sector is more advanced in convergence than the services sector.\n- Large variations exist among subsectors:\n  - High-tech industrial sectors, in particular the ICT sector, are lagging low-tech sectors.\n- Structural transformation from industry to services is underway and affects convergence prospects."
    },
    {
      "heading": "Growth projections and trajectory",
      "content": "- The paper projects that growth could slow to 5 percent by 2025 and 4 percent by 2030.\n- Ample room remains for further convergence, but three structural pressures are expected to exert sustained downward pressure on growth:\n  - The shrinking distance to the frontier.\n  - The structural shift from industry to services.\n  - Demographic changes."
    },
    {
      "heading": "Potential upside forces for future growth",
      "content": "- Digitalization.\n- SOE reform.\n- Services sector opening up."
    },
    {
      "heading": "Downside risks and scenarios that could impede convergence",
      "content": "- A financial crisis.\n- A reversal in global integration in trade and technology."
    },
    {
      "heading": "Methodological scope and context",
      "content": "- The paper takes a sectoral approach to fill a gap in the literature that has largely focused on macro-level aggregates, arguing that macro aggregates are ill suited to capture the impact of China’s significant structural transformation on economic growth.\n- The analysis examines past sectoral transitions and predicts future shifts.\n\nMin Zhu, Longmei Zhang, and Daoju Peng, November 27, 2019. China’s Productivity Convergence and Growth Potential—A Stocktaking and Sectoral Approach (IMF Working Paper No. 2019/263).\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2019/11/27/chinas-productivity-convergence-and-growth-potential-a-stocktaking-and-sectoral-approach-48702"
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    "Authors: Min Zhu, Longmei Zhang, Daoju Peng",
    "Published: November 27, 2019",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781513515359.001",
    "The paper analyzes productivity convergence across 38 industrial sectors and 11 services sectors.",
    "China’s productivity convergence remains at an early stage.",
    "The industrial sector is more advanced in convergence than the services sector.",
    "Large variations exist among subsectors:",
    "Structural transformation from industry to services is underway and affects convergence prospects.",
    "The paper projects that growth could slow to 5 percent by 2025 and 4 percent by 2030.",
    "Ample room remains for further convergence, but three structural pressures are expected to exert sustained downward pressure on growth:",
    "Digitalization.",
    "SOE reform.",
    "Services sector opening up.",
    "A financial crisis.",
    "A reversal in global integration in trade and technology.",
    "The paper takes a sectoral approach to fill a gap in the literature that has largely focused on macro-level aggregates, arguing that macro aggregates are ill suited to capture the impact of China’s significant structural transformation on economic growth.",
    "The analysis examines past sectoral transitions and predicts future shifts.",
    "**Working Paper**"
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