This course is targeted at students who have had Economics 101 and 102 (the “Principles” sequence) though in the past motivated students with an interest in China but little economics background have done well.
China’s growth is slowing from real GDP growth of a heady 10+% pa to (officially) between 6%-7%. Why, and so what? Until now there were three combined drivers: the emptying out of the countryside — farm-to-city migration — combined with favorable demographics and a steady increase in labor productivity that reflected heavy investment in infrastructure, housing, and production capacity. The first inevitably peters out, and while the demographics story is more complicated, the conditions that produce a “positive” dividend inevitably give way to an era of negative benefits. Finally, technology catch-up and the investment that underlies it face diminishing returns.
Growth in GDP is paralleled by growth in incomes. Of course that is good for China’s workers, but it does mean that they no longer constitute cheap labor, despite the public persistence of that image. That is reflected in shifting trade patterns, as higher incomes affect both the structure of exports and of imports. Furthermore, higher levels of economic activity — transport, electric power generation and the like — entail negative externalities.
This course will be restructured from previous years, with only a small portion devoted to agriculture, and correspondingly more on international topics. That will be reflected in a significantly different set of readings.
Formal output will consist of several short papers and two quizzes. I have yet to decide whether there will be a final paper or a final exam.