Past and future engine of Chinese economic miracle: Evidence from sources of financing

This study examines the engine of Chinese economic miracle in terms of its structure of financing sources and the level of capital market development. The empirical results show that the financial depth of China increased significantly for the period between 2000 and 2011. We also find that China experiences a significant improvement in the size of debt market in recent years. Specifically, the corporate bond sector started playing more important role as a source of financing source in China. However, for sustainable economic development, it is critical to raise the efficiency of capital accumulation and circulation within an economy. In addition, it is imperative for China to construct well-functioning capital markets in order to maintain its rapid economic growth in the future.