Publication

This paper analyzes China’s economic performance in the 25 years before 2006 and discusses its prospect for growth. The author argues that exports and investment were the two driving forces of the growth process China experienced. Foreign direct investment plays an important role. He holds, however, that property rights are far from being clearly developed, and points out that structural issues such as the state-owned firms and the loss-making of the banking industry have to be solved. He concludes that major policy issues include the institutional deficit, especially with respect to the rule of law and the lack of democracy.