It is widely believed in China that in order to meet the target of tripling gross domestic product (GDP) per capita between 2005 and 2020, as set out in China's eleventh five-year plan in 2005, a change in China's growth strategy from FDI promotion and export-led growth towards technology upgrading and higher productivity growth in manufacturing needs to occur. This paper seeks to evaluate the potential effectiveness of recent government initiatives to be taken to achieve these ends. In particular, these include increased educational spending, tax incentives, large research and development (R&D) projects, and changes to the regulatory environment. In measuring China's economic growth potential towards 2020, this paper employs an economic analysis of Total Factor Productivity and identifies the importance of continued domestic technical innovation.
Technology Upgrading and China's Growth Strategy to 2020
Working Paper #21