Chaoxia, Lujiazui, Shanghai, taken on January 1, 2022 (drone photo). Xinhua News Agency (Photo by Yang Fan)
In 2021, China's economic report card is released, and the mainland's total economic output is expected to account for more than 18% of the global economy, and the per capita GDP will exceed 12,000 US dollars. This means that the foundation for the mainland's development is firmer, the conditions are better, the motivation is more sufficient, and it also contributes to China's strength to global development.
Looking forward to 2022, when there is still great uncertainty in the world economy, why is China an important force in stabilizing the world economy? How can China achieve sustainable economic development through its own policies? To this end, Si Ke interviewed Zheng Yongnian, Dean of the Institute for Advanced Study in Global and Contemporary China at the University of Chinese, Hong Kong, Shenzhen.
The following is an excerpt from the interview:
There is still a lot of uncertainty in the world economy in 2022.
The first is when the post-pandemic era will arrive, which is uncertain. There is not enough scientific evidence to determine exactly when the COVID-19 pandemic will end. Even if the epidemic passes, will the world economy improve immediately? This is also debatable.
Under the background of the new crown epidemic, the global supply chain and industrial chain have suffered a serious impact, even if the epidemic is controlled, can the global supply chain and industrial chain be quickly repaired? I think it depends on several factors.
First, the internal problems of the world's major economies have not yet been resolved. Today's world economy under the impact of the new crown epidemic is actually separated from the world economic situation before the new crown epidemic. For example, the worldwide financial crisis in 2007 and 2008, led by the Wall Street subprime mortgage crisis, was recognized as the product of the imbalance of the world economic structure. However, the world economic structure is not abstract, the imbalance of the world economic structure is the problem of the imbalance of the internal economic structure of various sovereign countries, especially the big countries, and the subprime mortgage crisis in the United States is the problem of its internal economic structure imbalance. Although countries are affected externally by globalization, if they do not have the internal capacity to solve the problems arising from external influences, they are still their own internal problems. So I think that even if the new crown is controlled, the internal economic restructuring of major economies such as the United States, Europe, and Japan will still need a long adjustment time. We can see that the ability of the Governments of these countries to resolve economic crises is in question. Affected by globalization, many countries have widened income disparities and highly differentiated societies. At the same time, populism is becoming more prevalent in some countries, and multiparty politics tend to become mutually vetoive, lacking an effective government. In my opinion, capital can create crises, but capital itself cannot solve the problem, and it is up to the governments to solve the problem. Without an effective government, who can solve economic problems?
A man crosses the street in Chicago, USA. Xinhua News Agency (Photo by Vincent Johnson)
Second, there is a general trend towards economic politicization throughout the world today. Many of the problems in today's world are actually arising from the influence of political manipulation. The governments of various countries are becoming more and more radical, and some politicians in Europe and the United States do not care about the economic life of their own countries at all, and professionalism has taken sides, and they create all kinds of utopias. How did the supply chain crisis arise? Covid-19 may have some impact on certain transport issues, such as containers, but is that the subject of the problem? No. Mainly because of political interference, because of improper political interference, which has caused many economic problems. You see Asian countries, under the new crown epidemic, the supply chain, industrial chain basically no problem, is because Asian countries still take economic development, economic stability as a major responsibility of the government, so no country in Asian countries to destroy the supply chain and industrial chain, so it is relatively complete.
Therefore, I believe that with the rise of populism in the West, especially the emergence of such a phenomenon as outsider domination, the phenomenon of economic politicization may poison the world economy for a long time and have a negative impact on the world economy.
In such a situation, what should China do? The Central Economic Work Conference has brought us a lot of positive information. The central authorities have once again stressed that economic development should be the center, and state policies should be centered on economic development. In this regard, compared with some other economies, I think China has a great comparative advantage.
We put forward a concept called "common prosperity", and I think the core of "common prosperity" is to turn to the domestic demand society, of course, the domestic demand society is also an objective phenomenon. China's economic growth as we all know before the "troika" - investment, trade, consumption, in my opinion, investment, trade pull will continue, but it is no longer the main body, the future, consumption to economic growth contribution is the greatest.
On January 14, 2021, consumers purchased cosmetics at the Haikou Sun Moon Plaza Duty Free Shop. Photo by Xinhua News Agency reporter Pu Xiaoxu
The consumer economy is the middle class economy, in any society, it is a small number of rich people who are prone to excessive consumption, the poor will never consume enough, and the real consumption is the middle class. So common prosperity should cultivate a larger middle-income class. There are now about 400 million middle-income people in China, and what will that number be by 2035? Some estimate 800 million, some estimate 600 million. If you take an intermediate value of 700 million. What does 700 million middle-income earners mean? I think it could be another world economic miracle, because there has never been a single economy with 700 million middle-income people in human history. So I think the policy of "common prosperity" is a very good direction.
Of course, the central authorities also stressed that common prosperity does not mean simply dividing up wealth, but continuing to divide the pie well on the basis of making the pie bigger. For the construction of middle-class society, I personally have always stressed that our hard infrastructure has actually been completed, such as highways, bridges, ports, airports, high-speed rail, etc., but soft infrastructure still has a long way to go, so we must do a good job in soft infrastructure.
Soft infrastructure mainly includes social security, medical care, education, public housing and other fields, and doing a good job in soft infrastructure is not only the basic guarantee for society to get rid of poverty, but also the basic system guarantee for the middle-income class. At present, the state also attaches great importance to the construction of soft infrastructure.
On November 25, 2021, the nursing staff of Qingniao Yiju (Jinjiang) Pension Service Co., Ltd., a nursing unit of the long-term care insurance institution, served the elderly insured by the long-term care insurance at the Jinjiang Social Welfare Center. Photo by Xinhua News Agency reporter Lin Shanchuan
On the other hand, changes in the international environment are not conducive to the development of China's economy, how should we view it?
I think in this regard, people still have to have confidence. In fact, in the process of dealing with the U.S. government over the past few years, we have learned a lot of experience. From Trump to Biden, they have been engaged in economic decoupling and economic and trade decoupling from China, how do they do it? The first is to attract American companies and production capacity back through the power of tax finance, including the Japanese Abe government also wanted to do this before, but how many companies do you see now? This is unsuccessful because the Chinese market is big enough that no capital, no big company wants to voluntarily give up the Chinese market. Second, the United States wants to transfer foreign companies to Southeast Asian countries, which is also unsuccessful. On the one hand, China has done the best job in epidemic prevention under the new crown epidemic, on the other hand, the markets of Southeast Asian countries cannot be compared with China, and one or two industries can be transferred to relatively small countries, but the transfer of the entire industrial chain supply chain is impossible. For example, in the automotive industry, Japanese, German, and American automakers are all in China, and the Chinese market has formed a supply chain industry chain, and it is impossible for enterprises to transfer all the industrial chains to other countries. In addition, not only is it a matter of production, the market is also an important consideration, who would want to give up such a large market in China?
In terms of chips, the United States will continue to suppress, but from comprehensive suppression to precision suppression, gangs and alliances, and other economies to suppress China, but this has also promoted China's comprehensive awakening and large investment from the central government to society to enterprises, which is a challenge and an opportunity for us.
From the perspective of policy concept, we have formed a package of opening up policies based on the very good experience formed over the past 40 years of reform and opening up, and put forward a more important concept - institutional opening-up, which I myself call "the third opening-up". When we used to say openness, we all meant open policy or policy-based opening up, but we now mention institutional openness. Policy-oriented opening up is not the same as institutional opening-up, under policy-based opening-up, policies will vary from person to person, from time to time, and have been changing, but institutional-type opening up is persistent, and we now mention institutional-type opening-up to ensure that China's opening-up policy is durable and unchanged.
This is what we have learned from historical experience. History tells us that "to be closed and backward is to be beaten," and only by opening up can we achieve substantive development. Internal open practice, we now have several large blocks, not only at the policy level, but also at the practical level. For example, the construction of the Guangdong-Hong Kong-Macao Greater Bay Area, the construction of Hainan Free Trade Island, and the construction of the Yangtze River Economic Belt, all of which have grown up in an open state and grown up under the condition of an international cycle, then these areas will also be sustainablely developed with a greater degree of openness. There are also Chengdu-Chongqing Economic Zone and Beijing-Tianjin-Hebei Economic Zone, which also have a large open component.
At the international level, we can also see that the implementation of the RCEP we signed with ASEAN and other countries has entered into force, which will have a great impact on both China and member countries, so overall, although the world economy is still facing great uncertainty, but our Chinese economic development to this extent, we can achieve sustainable development through our own effective policies. China's sustainable development is first and foremost a contribution to the stabilization of the world economy. I don't think this reality will change much in the next few years, and China will still become a force for stabilizing the world economy. Not only is it a stabilizing force, China will continue to promote globalization or economic regionalization, like the "Belt and Road", which will become a powerful engine for promoting the recovery of the world economy. So I think there are difficulties in difficult times, but confidence is the most important, and China's current situation has enough reasons to keep us optimistic and confident.
Producer: Li Xiaoyun
Editor: Zhou Jiamiao
Proofreader: Guo Jianwei