A New Mathematical Logical Framework for Explaining China’s Economic Growth—— Analytical Approaches Based on Distortion Differences in Dual-track System

Where did China’s economic growth miracle come from in the past? Why has it declined since 2011? If it can grow at a medium-to-high rate,where does its potential lie? Current mainstream equations for China’s growth all use fluids as endogenous variables.Unlike market economy,developing and instantaneous transition countries,China is an extra-long-cycle gradual transition country with differences between market economic standard values and dual-track systemic distortion values,and distortions cannot be corrected by profit-maximizing entities.Observed from practices since 1978,dual-track system has caused idle and inefficient utilization,which formed system surpluses that imprison productivity with distortions; Growth was accelerated by advancing reforms to correct distortions.Therefore,China’s economy should be considered as an operating system consisting of fluids,channels and gates,where gates measure system,i.e.,differences are introduced as main endogenous variables.Based on this,dual-track systemic mathematical analyses are established: “calculating used resources’ quantities,comparing differences between standard values and distortion values,estimating inefficiency output losses’ scale,measuring system surpluses,obtaining potential through reforms,and forming new production growth functions”,which gives mathematical explanations for source and slowdown of China’s high growth and prospects for future economy.