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Reasons and Solutions for Successive Declined Growth for 5 Years
Abstract: Among the methods for analyzing China's economic trends, both demand analysis and supply analysis have advantages and disadvantages. The correct method is mainly using theories and methods of Marxist political economics analysis while drawing lessons from the reasonable theories and effective methods in Western economics. Although it has declined for five consecutive years, China's economy will not collapse, as the overall economic trend is going well and the economic growth has huge potential. The proximate causes of the economic downturn are oversupply and lack of effective supply, insufficient demand, weakness of investment, export and consumption, especially insufficient consumption demand resulted from huge income gap and low labor income. The deep-seated causes are imperfection of ownership system, distribution system, market system, economic management system, and so on. In addition to a series of important strategic policies implemented by the nation, such as the comprehensive deepening reform, expanding domestic demand, improving supply, and optimizing structures, China should also actively, steadily, and reasonably deepen the reform of the systems relevant with distribution to stabilize growth.
Key words: China's economic downturn; supply side; structural reform; supply and demand analysis; political economy analysis
1. Introduction
During "the 13th Five-Year Plan" period in China, to double the size of the 2010 GDP and per capita income by 2020, the average annual economic growth must remain above 6.5% between 2016 and 2020. However, China's economy is showing a downward trend. As the statistics data released from the National Bureau show, China's GDP growth rate declined year by year from 10.6% in 2010 to 9.5% in 2011. In the following years of 2012, 2013, 2014 and 2015, it declined to 7.7%, 7.7%, 7.3% and 6.9%, respectively, a 3.7% decline in total 5 years, and 0.74% average annual decline, and further decreased to 6.7% in the first half of 2016.1 The present situation and prospect of China's economic growth are not only directly related to domestic investment, employment and income, but also increasingly affects the economic growth of the world. It is now for China a big realistic longterm issue and also a focus of attention at home and abroad how to correctly understand and evaluate China's economic growth downward trend, and...