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Earning the Dividends of Reform

Author:Cai Fang

Press:Social Sciences Academic Press

Pub Date:2015-04

How should we view and address the current situation of economic slowdown and greater downward pressure?  A new book, Earning the Dividends of Reform, by Cai Fang, vice president of Chinese Academy of Social Sciences, comes out with two important viewpoints: firstly, the slowdown of economic growth results from rise of the economic development level and shift of factor endowment which is a trend unable to be changed by macroeconomic policies; secondly, proactively advancing reform could increase labor supplies, improve resources utilization efficiency and productivity to some extent so as to achieve comparatively fast economic growth.

According to the author’s research, one of important factors triggering significant slowdown of China’s economic growth lies in disappearance of the population dividend. Fifteen years ago, the labor population increased by about 8 million annually but currently, decreased by 5 million every year. Although the population dividend disappeared, the dividend of reform remains great. It is estimated that the potential growth effect brought about by the increase of labor supply, expansion of human capital accumulation, promotion of productivity and balancing of population development could contribute to 1 – 2 percentage points of the future GDP. Comprehensively deepening reform enables China’s economy to keep the medium-to-high speed of growth in the coming ten years.