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GTAP Resource #4485 |
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"The Demographic Structure and Export Strategy in Emerging Economies" by Li, Xin Abstract China’s export-oriented growth model is rooted in China’s unique population structure and demographic characteristics, which are including (i) the large amount of labor in the countryside; (ii) the low level of urbanization and (iii) the low dependency ratio. Driven by these three fundamental forces, China’s export-oriented industrialization becomes a natural economic consequence and it can also be considered as a “self-selection” behavior. At the early stages of the country’s economic take-off, the low level of urbanization with the large amount of labor results in a slow and limited growth rate of its income. Emerging economies usually suffer from the small size of their domestic market, which in turn forces them to rely much more on their external market. Equally important, by using a gravity model (Anderson & Van Wincoop, 2003) which introduce the dependency ratio. This paper finds that the low dependency ratio leads to an unbalance of emerging economies’ structure, especially in China, where aggregate investment plays a more important role than aggregate consumption. Accordingly, China has to export many products abroad to fulfill its excess domestic supply. We can also obtain a consistent result from the experience of India. While the share of consumption in China has declined fast since its age dependency ratio became lower than 65%, the share of consumption in India has declined even faster along the path of declining age dependency ratio. The Chinese model is not unique; it fits into the theory on the relationship between demography and export-oriented strategy. And the usual contrast between China and India is misleading. The seemingly different models adopted by those two countries are actually the different stages on the same development trajectory.... |
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- Demographics - Domestic policy analysis |
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Public Access GTAP Resource 4485 (223.4 KB) Replicated: 0 time(s) Restricted Access No documents have been attached. Special Instructions No instructions have been specified. |
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Last Modified: 9/15/2023 2:05:45 PM