ABSTRACT
This chapter investigates from a macroeconomic perspective, new sources of growth as follows: In the short-term view, sources of economic growth can be described from the demand side, such as consumption, investment, net exports and government expenditure. Based on a 'demand framework', reform directions for China are expected to behave in this way: from export-oriented to domestic demand-oriented; from investment-driven to consumption-driven. During this transformation, public expenditure could play a 'buffer role'. From the middle-long-term view, the new sources of growth should be analyzed through a 'supply-side' framework. In this sense, production factors like labor, capital and technology constitute the bigger picture from a long-term perspective. The chapter argues that structural reforms must address both aggregate demand-and supply-side issues. It analyzes that the supply of human capital is not in a state of over-supply; rather the problem is related to the need to deregulate the service sector to produce more job opportunities.
