China's Transition Phase and Long-Term Development Path, Efficiency and Growth Rates

This paper examines the transition of growth stage China is about to experience and the main conclusions are as follows: (1) Phase I of economic growth driven by investment and export is losing the momentum of efficiency enhancement through intervention and the growth stage of efficiency enhancement through structural adjustment is coming to an end. Urbanization and the development of service sector will inaugurate Phase II of stable economic growth characterized by structural optimization through efficiency enhancement; (2) Three leading factors promoting the transition from Phase I to Phase II include: demographic changes and the emergence of workforce turning point, the reversion of factor elasticity parameters of long-term growth function, and service-oriented economic structure; (3) Developed provinces and municipalities in east China have already entered into the channel of economic deceleration. With increasing urbanization rate, accelerating service-oriented structure and declining demographic dividend after 2016, China's economic slowdown would be inevitable if labor productivity fails to improve.