Although China's ecomy has grown spectacularly over the last twenty-five years, ecomists disagree about how the Chinese ecomy is likely to fare in the short- and long-term future. Is China's growth sustainable, or has China relied too much on investment, which is subject to diminishing returns, and t eugh on techlogical change? The first book on the relation between investment, finance, and growth in China, How China Grows dismisses this concern. James Riedel, Jing Jin, and Jian Gao argue that investment has t only been the engine of growth, but also the main source of techlogical progress and structural change in China. What threatens future growth instead, the authors argue, are the weaknesses of China's financial system that undermine efficiency in investment allocation. Financial-sector reform and development are necessary, t only for sustaining long-term growth, but also for maintaining macroecomic stability. Although it includes some technical ecomic analysis, How China Grows is accessible to necomists and will benefit anyone who is interested in development finance in general and in China's ecomic growth in particular--whether ecomists, political scientists, bankers, or business people
James Riedel is Professor of International Economics at Johns Hopkins University's School of Advanced International Studies. Jing Jin is Director of China Strategy for UBS AG Hong Kong, and a professor at Beijing's Central University of Finance and Economics. Jian Gao is Vice-Governor of the China Development Bank in Beijing.