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Growth and productivity measures of China’s due to international trade: PRC’S experience 1970–1993

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Abstract

Solow’s Growth Model Solow (Q J Econ 70:65–94, 1956) and aggregate data are applied to estimates the increase in productivity due international trade and the resulting technical change and capital augmentation for the years 1970 to 1978 and 1978 (the beginning of the reforms and “open door” policy in China) to 1993. According this paper’s estimations the GDP per man hour in 1978 increased by 1.76 times for the year 1970, from $0.1233 in 1970 to $0.2169 in 1978, and in 1993 by 5.23 time that of 1978 to $1.1348 in 1993. For the period under study due to “open door” policy the GDP per man-hour more than quadrupled, and 76.18% of this increase was due to technical changes and the remaining 23.82 was due to capital augmentation. The paper consists of five sections. “Introduction” Section reviews some of the growth literature as well as looking at the macroeconomic measures of China’s economic performance since 1978 the beginning of the reforms. “Data” Section explains the data modifications. “Empirical results” Section portrays the empirical results and the next indicates conclusions.

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Notes

  1. International acceptance of official Chinese data dates from the publication of Alexander Eckstein ed., Quantitative Measures of China’s Economic Output (Ann Arbor: University of Michigan Press, 1980). Earlier discussions of data issues include Choh-ming Li, The Statistical System of Communist China (Berkeley: University of California Press, 1962); Shigeru Ishikawa, National Income and Capital Formation in Mainland China (Tokyo: Institute of Asian Economic Affairs, 1965); Ta-chung Liu and Kung-chia Yeh, The Economy of the Chinese Mainland (Princeton: Princeton University Press, 1965); Dwight H. Perkins, Market Control and Planning in Communist China (Cambridge: Harvard University Press, 1966); Nai-ruenn Chen, Chinese Economic Statistics (Chicago: Aldine, 1967); Thomas G. Rawski, “On the Reliability of Chinese Economic Data,” Journal of Development Studies 12.4 (1976), pp. 438–441; and World Bank, China: Statistical System in Transition (Washington DC: World Bank, 1992).

  2. The regression was run through origin therefore R-square only measures the proportion of variability of dependent variable about the origin explained by regression.

  3. Ibid.

  4. Ibid.

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Acknowledgement

I like to thank Dr. Philip R. P. Coelho of Ball State University for his comments and I bear the responsibility of all remaining errors.

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Authors and Affiliations

  1. Economics and Finance, Montclair State University, Montclair, NJ, USA

    Hamideh P. Ramjerdi

  2. Economics and Finance, William Paterson University, Wayne, NJ, USA

    Hamideh P. Ramjerdi

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  1. Hamideh P. Ramjerdi
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Correspondence to Hamideh P. Ramjerdi.

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This paper is dedicated to the memories of Late Dr. Anthony D’Amato, who was a Professor at W. Paul Stillman School of Business at Seton Hall University South Orange, New Jersey.

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Ramjerdi, H.P. Growth and productivity measures of China’s due to international trade: PRC’S experience 1970–1993. AEJ 5, 253–265 (2007). https://doi.org/10.1007/s10308-007-0120-8

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