Phoenix Network Financial News, the era of great changes, how to grasp the trend and cross the cycle? On December 12-13, the "2021 Phoenix Finance Summit" hosted by Phoenix.com and hosted by Fenghuang.com Finance was held in Shanghai, with the theme of "Trends and Cycles" and FAW Hongqi as its strategic partner. The summit gathered nearly 50 domestic political, business and academic guests, looked forward to the international and domestic situation, pulsed the economic development trends, and talked about the direction of world economic recovery and the new path of China's economic development.
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Yao Yang, dean of the National Institute of Development Studies at Peking University, attended the summit via video link. Yao Yang said at the summit that the decoupling of the world and China was too pessimistic, and it turned out that it did not happen. Last year, when the epidemic first began, many people were saying that the world was going to decouple from China, the industrial chain was going to break, and so on. But the past year's situation tells us that none of this has happened, not only has it not happened, but that China's close ties with the world economy have actually increased.
Trade frictions and the new crown pneumonia epidemic have made both China and the United States think about supply chain security issues, and in February this year, US President Biden signed the "US Supply Chain Executive Order", and the view that the Western world led by the United States decoupled from China was even more popular. In this regard, Yao Yang said that in the past year, about 20%-30% of China's economic growth was generated by exports, returning to the level of the first 10 years of this century, China's export growth rate in the past 10 years is very high, and the pulling effect on China's GDP growth is very strong. The convergence of the world is actually a trending thing, rather than going the other way around? The most important thing is that the pattern of the division of labor in the world economy has not changed, and the pattern of the division of labor in the world economy was formed in the previous round of globalization, and there is a deep economic logic behind it, and this economic logic is the comparative advantage of each country. China has firmly occupied its place in the world division of labor, and by participating in the international cycle, China's economy has become very powerful.
Yao Yang said that The proportion of China's manufacturing industry in the world is 29.2%, and the three countries behind the united states, Germany and Japan are only one percentage point larger than 1 by China. That is to say, China's manufacturing industry is already a very huge existence in the world, and it is difficult for the world to leave China.
The following is the full text of Yao Yang's speech:
Yao Yang: Hello everyone! I am very happy to come to this year's annual meeting of Phoenix Finance, our epidemic is still in progress, so we can only meet with you online.
The topic I want to share with you today is the resilience of world economic growth, and the resilience of China's economic growth. If you think back, when the epidemic first began last year, many people were saying that the world was going to decouple from China, the industrial chain was going to break, and so on. But the past year's situation tells us that none of this has happened, not only has it not happened, but that China's close ties with the world economy have actually increased.
We have seen that from the past year to this year, about 20%-30% of China's economic growth is due to exports, which basically brings China's economy back to the level of the first 10 years of this century, because in the first 10 years, our export growth rate was very high, so the pull on China's GDP growth was very strong. So the past two years have been the same, so why is the convergence of the world a trending thing, rather than going the other way around? I think the most important thing is that because the pattern of the division of labor in the world economy has not changed, the pattern of the division of labor in the world economy was formed in the last round of globalization, then there is a deep economic logic behind it, and this economic logic is the comparative advantage of each country.
Then China has firmly occupied its own position in the pattern of world division of labor, and by participating in the international cycle, China's economy has become very powerful. Let's look at a data, that is, China's manufacturing industry accounts for 29.2% of the world's total, then the three countries behind us, that is, the United States, Germany, and Japan, they add up to one percentage point larger than 1 by China. That is to say, China's manufacturing industry, it should already be a very, very huge existence in the world, then it is difficult for the world to leave China.
So the economic recovery of the past year or so, it is a kind of mirror-to-face economic recovery, China's recovery is mainly on the supply side, then the recovery overseas, especially the recovery of developed countries, is mainly in the consumption side, which has driven the growth of China's exports. So we have to ask the question, is this kind of recovery process sustainable? That is to say, when the supply side of the economy of other countries begins to recover, is China's export growth going to be slow, then this export speed may be lower, but my feeling will not be too much lower, why? Because when the world is recovering, its international trade will increase. That is to say, there is a proverb in English called Rising tide lifts all boats. That is, the economy of the United States is good, the economy of Europe is good, in fact, it will drive the Chinese economy to be good. That's the reverse, and a good Economy will drive the economies of other countries to be good.
We know that about 90% of the global trade is the trade of this raw material, intermediate products, so a lot of this intermediate products come from China, of course, China also buys intermediate products from other countries around the world. So in such a situation, I think the growth rate of China's exports will not fall too much.
Looking forward to next year's economy, I think the biggest uncertainty is whether the epidemic can be completely controlled. Of course, it is impossible to eliminate this virus, and the control I am talking about is mainly from the perspective of its transmission, as well as from the perspective of treatment. So now it seems that as long as the second shot is given and the third shot is given, the probability of getting seriously ill is greatly reduced, and then the probability of death is greatly reduced. We have seen that because of this recurrence of the epidemic, there are many places in our country that have strengthened the control of the epidemic in the past period of time, but there is one point that everyone has ignored. It is since the rise of the first wave of the epidemic last year that we have sporadically, and no one has died, indicating that vaccination works.
With the introduction of new vaccine control drugs, I thought about next year, even if the virus can't be eliminated, but because this oral drug can control it and prevent it from becoming a serious disease, I think the whole world will be open at that time. So I'm pretty optimistic about the global economic situation next year. I even thought that if at the end of next year, then there may be a new epidemic in China, when oral medicines appear, our country can also open up. At that time, I am afraid that the first thing you have to do is to think about buying a ticket and going abroad for a trip, because everyone has been holding back for more than two years, or even three years.
So in this case, I don't think the global economy will be too bad next year, because this is the resilience of globalization, then the Chinese economy has its own resilience. Our economic growth rate has come down in the second half of this year, so some people have begun to have some pessimism about the Chinese economy, and I don't think this pessimism is based on much basis. In fact, if we do a simple calculation, we know that this year's growth rate is probably between 8-8.5, because the growth rate in the first three quarters of this year should be 9.8%. Then you can convert this, then we can know that in the last quarter, even if its economic growth rate fell between 3% and 4%, then our growth rate can still exceed 8%, or even reach 8.5%, which is basically a definite data.
Then under such a difficult situation, if we can still reach 8% or 8.5%, I think it should be a very good achievement, and we should be optimistic. In the second half of this year, this economic growth rate came down, and a very important reason is that in the second half of last year, its economic growth rate was too fast, and there was a tail-tail phenomenon, so the speed of the second half of this year was pulled down.
I think the speed of China's economic growth next year will not be too low, in fact, you see, in the past two years we averaged down, the economic growth rate is basically the lower limit of our potential growth rate, my own estimates, China's economic potential growth rate is 5.5%-6% range, I estimate that next year's growth rate should also be in this range, we do not need to have a pessimistic mood about China's growth rate next year.
There are also people who say that China's economic growth has entered stagflation, which is even more unfounded. First of all, I just said that our growth rate is not low, and secondly, our inflation rate is very low, less than 2%, if you calculate this core inflation rate is about 1.5%, this inflation rate is very, very low, what is it easy for everyone to be? We often see the price increase of those products swaying. For example, we have recently seen the price of vegetables rising, what is rising, some places even say that vegetables are already very expensive, then you eat more meat, in fact, this is a good suggestion, right? Because the price of meat is falling, why don't you eat more meat? In fact, this vegetable price increase is temporary, that is, this year's climate is related, because this year basically from the summer it suddenly entered the early winter, especially in the southern region, right? This leads to an increase in vegetable prices, so this cannot be sustained for a long time.
Then next year's prices may not be too high, some people may say that you see our PPI is still very high, but the PPI is high it has been higher for more than a year, it has not been transmitted to the CPI, why? Because our industrial resilience is very strong, our industrial enterprises are not operating at enough rate. In this case, it can absorb it by increasing the operating rate, then digging up the money, and then absorbing the price increase of this PPI is the raw material. So I don't think there's much basis for this so-called stagflation statement. As our policies become more rational and more stable, I think our economy will be more stable next year.
Finally, we should also pay attention to the potential of China's medium- and long-term development, many people are easily swayed by this short-term trend, because the economic growth rate has come down, and it is predicted that the future economic growth rate will be lower than this, and it will be worse, and this logic of such a straight line is often proved to be wrong. Our company is completely correct to bury its head in pulling a cart and doing our own business well. But it is also very necessary to look up from time to time to look into the distance. Looking at the distance, I think the next 5-10 years of China's economy should be another golden period of growth.
On the one hand, we've seen that over the past decade, our adjustments have bottomed out, and the bad companies have been eliminated. On the other hand, our economy has entered a stage of high-quality development, and many of our technologies have entered the world's frontier fields, so this will drive the rapid development of China's economy. I'll give you an example, which is our electric vehicle industry, you look at our electric vehicle, in the past year or so, its sales growth rate is very, very impressive. I looked at the numbers, last year our electric vehicles accounted for 40% of the world's electric vehicle sales, and in the first half of this year it accounted for nearly 60%. This is a rapid development, indicating that China's electric vehicle development is leading the world, then other industries are actually catching up, so we should maintain confidence in the long-term growth of China's economy.
I'm going to share it with you today, thank you!
How to grasp the trend and cross the cycle in the era of great changes? Dai Xianglong, Xiao Gang and many other heavyweight guests offered suggestions and suggestions