The impact of China's demographic policy on its current GDP growth
|Author:||Mgr. Karina Rotar|
|Year:||2017 - summer|
|Leaders:|| Mgr. Michal Paulus
|Work type:|| CSF - Corporate Strategy and Finance
|Awards and prizes:|
|Abstract:||The topic of this paper is relation between the current demographic policy of China and its GDP.
A large number of papers have been already written on the subject; however, there is still a space
for theoretical analysis and empirical estimation: use more recent data, find new variables and
relations. In this thesis we have performed a research based on panel data on 31 Chinese
provinces for the years 1995 – 2015. Based on Solow growth model, we chose gross regional
product of each province as dependent variable; gross capital formation, foreign direct
investment and joint variable of percentage of ethnic minorities multiplied by birth rate have
been chosen as independent variables. As an estimation technique we use fixed effects model.
Empirical estimation led us to the following findings. Firstly, the impact of the one child policy
on economic growth of China is negative. Secondly, the impact of the foreign direct investment
on gross regional product is insignificant. Thirdly, high percentage of ethnic minorities in the
population of the region negatively affects its economy.
We come to a conclusion that the government of People’s Republic of China has to further adjust
the demographic policy in order to secure further sustainable growth.