ABSTRACT

China's GDP growth rate reached 14.2%in 2007，and since this figure began to slump to 9.5%in 2011，which was still at a fast rate of above 8%.During that pe-riod, most people in economics and policy circles at home and abroad were optimistic about the growth of the national economy and they did not realize the growth rate would continue to decline.However, the growth rate plummeted to 7.9%in 2012 and 6.7%in 2016.From the year of 2008，the growth rate has been in a downward trend for 9 years, which plagues every Chinese and even influences the world economy recovery.

In 2011，China's per capita GDP reached more than 10，000 U.S.dollars in terms of purchasing power parity （PPP ）.According to the development stages of such countries and regions as Japan, South Korea and Taiwan of China, with the per capita GDP at this level, it is natural that the economic growth rate will reduce from a high speed of more than 8%to a medium speed and even to a low speed very quickly.Another argument is that China's eco-nomic downturn is mainly influenced by the world econom-ic turmoil caused by the US subprime mortgage crisis and the European sovereign debt crisis in 2008.Moreover, China's urbanization level is still at above 50%，and the per capita GDP is relatively low.This means China has its advantages in the future development.From the development experience of other countries, when urbanization level rises from 75%to 80%and per capita GDP moves to-wards a higher income level, it should be a stage characterized by rapid economic growth.

However, according to the data comparison of the first argument about the e-conomic downturn, the per capita GDP of China's Taiwan region and South Korea was 14，000 and 12，000 U.S.dollars, when their growth rate fell to 8%or less in 1998 and 2003 respectively.By contrast, China's per capita GDP was around 5，500 U.S.dollars, as its growth rate dropped below 8%in 2012.Given the changing factors in the value of time, that is, measured by PPP, China's develop-ment level in 2012 is no more than half of the above region and country.Simply put, by comparison, China's development level did not reach the threshold where the speed would fall, and the period with a high growth rate of more than 8%should have lasted 10 to 15 more years.This seems to prove that the second argu-ment may have some standing points.

Nonetheless, based on a close data comparison in the second argument, the year from 2008 to 2011 witnessed the worst depression in Europe and America but a relatively high speed economic growth in China.Moreover, it was in the same period when the economic growth in Europe and the United States recovered from recession that China actually slowed down its growth.Therefore, it seems that the reason is not sufficient to directly prove that China's downward economy is caused by economic turmoil in Europe and the United States.In addition, the fertility rate, growth rate and the population of median age, and proportion of the popula-tion over 65 years old that we compared at that time are quite different from those in Korea and Taiwan of China in the year when their economic growth rate declined from 8%.We also found that at the development level of＄5，500，the urbaniza-tion level of China's resident population should not be 51.27%，and the urbaniza-tion level of household registration should not be 41.2%，either.At that time, we made a guess that the national economy was supposed to grow by more than 8%for 10 to 15 more years.Was it possible that the economic downturn was caused by the slowing population growth, structural aging and obstacles to migration？

The authors'research began with reading domestic and foreign literature on the relationship between population and economy from various perspectives, in particular, Becker's family economic analysis, population growth transformation, and the compilation and analysis of China's population data since 1949.What we have learned from the tasks is that in a market economy, the population's decision making and behavior related to child birth are determined by their opportunity costs and direct costs.Moreover, in the stages of industrialization and post-indus-trialization, the market mechanism regulates the birth of the population naturally, thus the population growth rate actually also shifts from explosive high-speed to low-speed and even to negative growth.Another significant finding is：the fluctua-tion trends of the two curves, which represent China's natural population growth rate from 1974 to 1994 and the economic growth rate from 1995 to 2014 respec-tively, are actually highly correlated.For the research in this period, we also dif-ferentiated between independent childbirth and family planning, guided family planning and compulsory family planning.Besides, we defined the main economic population and described China's“population pit”caused by family planning poli-cy.With the findings made in this period of time, we tried to prove that factors in-cluding the intervention of the population 20 years ago, the reduction of the main economic population, and the aging of the population（different income consump-tion rates of the young and the elder）would result in the slowdown of the economic growth rate through the above-mentioned categories and their mathematical rela-tionships.However, the conclusion that the population growth rate 20 years ago very strongly affects the economic growth rate today is still a black box-type expla-nation that simply inputs cause and outputs effect.It does not explain clearly the internal transmission mechanism.

As for the blocked population migration, in the past two years, we have onlystudied that land property rights and market conditions prevented some people from going out, while the household registration system in urban areas, the unfairness of public services such as education and medical care and extremely high housing prices kept other people from coming in.In addition, we proposed special proces-ses such as“pendulum-type mobility”，“working afar when young while returning to homeland old”and“drifting in cities without permanent residency”of the Chi-nese population.However, we did not analyze or verify the transmission mecha-nism of its economic loss and downward growth rate from a mathematical and quan-titative perspective.Of course, we also studied the tax burden, other corporate costs, and the external economic leakage that might affect the growth rate.Al-though the working results have been published and integrated in a number of pub-lications, we still feel that the explanations on the basic points of the downward e-conomy and the comprehensive causes are not sufficient.Besides, the level, structure and logic are not particularly clear.

Before the further in-depth study which began in early 2016，the authors re-considered the framework and contents that needed to be analyzed thoroughly.First, from the correlated changes of the increase or decrease in consumer demand caused by long-period population changes and the corresponding total supply, we found the transmission mechanism that the upward and downward population growth affects the upward and downward economic growth.Second, from the long-term cycle of wealth and income concentration in social stratum, and the difference in income consumption rate and income investment rate at all levels, we demon-strated the relatively insufficient consumer demand and surplus production capacity of its transmission.The analysis was started with this logic for about two years.

Many reasons resulted in the economic slowdown and downturn since 2008.What we need to analyze are the most critical, essential and in-depth reasons.They are：the influences of birth control on economy, economic losses caused by blocking population mobility and migration, the overproduction transmitted by the concentration of income into the government, urban residents and property devel-opers, behavior and real right configuration：observation of long-term resource al-location efficiency, and overproduction and slowdown of economic growth due to insufficient consumer demand.

We did not develop new complex model in our research, we just studied the problems in China according to the standard values of some countries in the same stage of development（if possible），to compare the differences between China and other countries in some aspects, including population growth, urbanization, agri-cultural employment ratio, real estate of wealth income, corporate taxes and other costs, and household income and consumption during change of population growth structure, dual structure transformation and other processes；from the differences, we estimated the possible losses of national economic consumption demand, in-come of residents, and GDP output caused by misleading policies and systems, in-cluding economic growth determined by the long-term process of population growth 20 years ago, population missing urbanization, and the cumulative effects of these various economic losses.In terms of analytical tools, based on an analysis of China's economic development process, factors and impact chains, we built some simple mathematical models to explain in a logic way the relationship between in-sufficient economic consumer demand and overproduction and the slower economic growth.It is not only the assumption of the mathematical relationship, but also the proof that the change of some demographic and other factors may change other eco-nomic factors.Although it may be imperfect and relatively simple, we intend pro-vide a possibly practical and explanatory analytical thinking, scope, method, and logical framework for studying the economic downturn in China.