By Jia Shen, Department of Development Strategy and Regional Economy, DRC

Research Report, No.174, 2020 (Total 5918) 2020-7-8

Abstract: Since the international financial crisis in 2008, China has experienced long-lasting and large-scale changes in economic growth. From the perspective of price, capacity utilization rate, corporate profitability, employment quality and other indicators, insufficient aggregate demand is an important constraint on the economic growth rate. The analysis of demand-side growth momentum shows that export is the main factor influencing the marginal change of China’s aggregate demand growth after 2008. Further analysis shows that the decline in China’s export growth after the international financial crisis mainly lies in the demand contraction caused by the continuous increase of China’s economic volume in the world and the long-term downturn of overall economic growth of other countries, instead of the rise in China’s per capita income. In the future, the growth rate of China’s aggregate demand will continue to decline, and traditional macroeconomic policies can no longer cope with the structural slowdown of aggregate demand. Therefore, we need to take a long view, domestically focus on expanding real expenditures in key areas such as education, basic research and new types of infrastructure, and actively promote the adjustment of international industrial division .

Keywords: aggregate demand, economic growth, super-large scale