ABSTRACT
China has been the world’s star performer in economic growth for the last two decades. China registered an average annual growth rate of 9.7 percent in the 1978-1999 period. However, the growth rates for 1996-1999 were not only below the average of the period, they also declined monotonically from 9.6 percent in 1996 to 7.1 percent in 1999. Naturally, many questions and concerns have arisen about this four-year deviation from the average. How much of the deviation was due to trend slowdown, how much to the internal economic cycle, and how much to the external shock from the Asian financial crisis? Furthermore, what could be done to offset the decline, and what are the long-term implications of these countermeasures?
