Lin Yifu: China's economy as a "catch-up" has two major advantages

Beijing, 18 Oct (China News Service) -- Lin Yifu, honorary president of the National Institute of Development Studies at Peking University, said in Beijing on 18 October that China's rapid development has brought about changes in the world pattern, and only when China continues to develop can the world enter a new pattern of peace and stability. He stressed that compared with other "catch-ups", China's economic development has two major advantages.

Lin Yifu said this at the 2021 Global Intelligent Logistics Summit hosted by JD Logistics on the same day. He said that the first advantage is reflected in traditional industries, and China has the advantage of being a latecomer.

Lin Yifu pointed out that in the traditional industry, China still has a gap compared with Germany, Japan, South Korea, Switzerland and other countries, and can also use the introduction of digestion and absorption as a source of re-innovation.

He analyzed that in 2019, China's per capita GDP calculated according to purchasing power was 22.6% of that of the United States, which was equivalent to the gap between Germany and the United States in 1946, Japan and the United States in 1956, and South Korea with the United States in 1985.

The development of Germany, Japan, and South Korea shows that they have all taken advantage of the latecomer advantages given by the gap with the United States. Among them, Germany achieved an average annual growth of 9.4% from 1946 to 1962, Japan achieved an annual growth of 9.6% from 1956 to 1972, and South Korea achieved an annual growth of 9% from 1985 to 2001.

Lin Yifu stressed that germany's average annual population growth rate from 1946 to 1962 was 0.8%, and its labor productivity increased by an average annual rate of 8.6 percent; Japan's average annual population growth from 1956 to 1972 was 1 percent, and its labor productivity growth was an average of 8.6 percent per year; South Korea's average annual population growth from 1985 to 2001 was 0.9 percent, and its labor productivity grew by an average of 8.1 percentage points per year.

Lin Yifu believes that this means that even if China is now facing an aging population, "but from the experience of Germany, Japan and South Korea, we rely on labor productivity growth by 2035, and there should be an 8% growth possibility every year."

China's second advantage is what Germany, Japan and South Korea did not have when they caught up with the United States, that is, the Fourth Industrial Revolution and the new economy characterized by artificial intelligence, big data, and the Internet.

Lin Yifu pointed out that the product technology research and development cycle in the new economy is particularly short, and the investment is mainly based on human capital, while China is a large country with a population of 1.4 billion, has the richest human capital in the world, and China also has the world's largest single market, plus China has the world's most complete supply chain of the real economy. In this situation, China has the advantage of changing lanes and overtaking in the new economy.

Lin Yifu stressed that under the advantage of latecomers and the advantage of changing lanes, he believes that China should have the potential to grow by an average of 8% per year by 2035.

However, Lin Yifu also pointed out that 8% refers to potential rather than real growth rate. Because in the future, China will achieve the goal of double carbon in its development, and it will also solve problems such as common prosperity. But even so, China could grow by an average of about 6 percent a year until 2035. If this rate of growth can be achieved, China's per capita GDP can reach $14,535 by 2025, turning it into a high-income country. (End)

Source: China News Network