Balance sought between govt intervention, mkt

What is China's new economic momentum? Recently, my colleagues and I conducted a study on the evolution of industries amid economic fluctuations. Over the past 30 years, China's economy has grown through cycles, transitioning from being primarily driven by labor-intensive sectors to capital-intensive ones.

Our research employed production network analysis to quantify the contribution of infrastructure and real estate to economic fluctuations. This method examines the input-output relationships across industries. For instance, when the property market rises, cement supply increases accordingly, and furniture supply follows suit, not to mention interior decor purchases and durable big-ticket items like white goods. While we won't delve into the technical methodologies here, our findings were quite unexpected.

Since 1992, reform and opening-up moves kicked off an economic boom, and various industries contributed to overall economic growth. But infrastructure and real estate were particularly significant. After China joined the WTO in 2001, the economy flourished again but later slowed due to the global financial crisis in 1997-98. After the 2008-09 sub-prime loan crisis recovery, infrastructure and real estate emerged as the primary growth engines.