【英文】亚开行报告：中国的长期增长前景（67页）

Understanding the country’s future potential growth is critical for designing economic policies. Potential  growth is a theoretical construct, an estimate of the output that the economy would have produced if  labor and capital had been employed at their maximum sustainable rates, i.e., rates that are consistent  with steady growth and stable infation (Powell, Sheiner, and Wessel 2021).5 Part II will discuss diferent approaches to estimating long-term growth. The production function approach,  the method we chose for our model in part III, frst estimates input factors—labor, human capital, capital  stock, and total factor productivity (TFP)—and then combines them into one production function. While  this approach yields a better understanding of the drivers of potential growth, it requires estimating the  trends in many variables, which can be a challenge (Arsov and Watson 2019).

Lardy (2019) points out  the challenges as follows: (i) it is extremely data intensive and requires innumerable judgement and  assumptions; (ii) it requires reasonable accurate historical data (on the capital stock, labor force, and human  capital); and (iii) projections require many judgements, with capital stock growth and improvements in  human capital being difcult to estimate, and future TFP growth being an even greater challenge.  Our estimate of potential growth indicates that, GDP growth will decline notably within this decade  without major reforms, which are needed in particular to the country’s capital and credit allocation, as  are measures to address the shrinking labor force. Furthermore, TFP growth will be much lower in future,  calling for improvements in R&D efciency.  The remainder of this paper is organized as follows: Part II discusses the diverging views on the PRC’s  long-term economic growth potential, including diferent approaches to forecasting long-term growth.  Part III specifes a production function and estimates potential growth for 2020–2040. Part IV develops  policy recommendations based on the fndings in the previous part. Part V concludes with an outlook on  policy challenges and reforms to boost potential growth.