CHINA's FUTURE ECONOMIC GROWTH STRATEGY: EXPORTS and/or DOMESTIC DEMAND?

Abstract

This thesis examines China's future growth strategy. During the last 20 years, an export-oriented strategy has led to significant economic growth. However, with increases in labor costs and appreciation of the RMB, China has to adjust its strategy to reflect these changing conditions. The analysis here suggests that China has to change its export structure from labor-intensive exports to high-tech exports, while simultaneously putting greater emphasis on development of domestic demand in order to reduce dependence on exports overall. Several recommendations on policies the government can adopt to help facilitate these changes are offered.