Interview with Lin Yifu: Can China and the United States escape the "Thucydides Trap"?
China News Service, Beijing, April 18 Title: Interview with Lin Yifu: Can China and the United States Escape the "Thucydides Trap"?
China News Service reporter Pang Wujie
In 2020, the gap between the total economic volume of China and the United States will further narrow, and China's GDP will rise to about 70% in the United States. Twenty years ago, China's economy was only about one-tenth that of the United States.
Behind this digital change is the rise of China. "When a great power rises, it challenges the previous powers, often bringing friction and conflict", which is the definition of the "Thucydides Trap". When a rising China meets the United States, which holds global hegemony, what changes will occur in the global competition pattern? Can China and the United States escape the Thucydides Trap?
Lin Yifu, a well-known economist, honorary dean of the National Development Research Institute of Peking University, and dean of the Institute of New Structural Economics, was recently interviewed by a reporter from China News Agency to explain these problems in detail. Lin Yifu believes that unlike the "weak and the strong" development mode of Western countries, China's rise has always been achieved through peace, which also provides a new possibility for other countries in the world, that is, development can also be achieved in a peaceful, mutually beneficial and win-win situation.
Regarding the so-called "China threat theory", he pointed out that China's rise will help build a new, stable international pattern and environment that allows all countries to develop together. U.S.-China relations may ease up in 2050.
Lin. China News Service reporter Tian Yuhao photographed
"Western Heavenly Scripture" does not work
How long does it take to go from being scrapped to becoming the world's second largest economy, the largest country in goods trade, and the largest country in foreign exchange reserves?
China's answer is less than 40 years. According to official statistics, in 2012, China's total GDP was 24.5 times that of 1978 at constant prices, and the share of the economy in the world increased from 1.8% in 1978 to 11.5%. In the nearly 10 years since then, China's economy has maintained a relatively high rate of sustained growth.
Creating such an economic miracle, "What exactly is China doing right?" "This has become a well-known puzzle in the field of economics.
Some scholars have pointed out that China's sustained rapid economic growth violates the common sense of many Western economics. If countries are ranked according to the factors proposed by the West: limited government, independent judiciary, and property rights protection that support sustained economic growth, China is not in the top, but China has achieved an economic miracle. Why is there such a "paradox"?
Lin Yifu believes that Western economics is mostly a law that Western countries have summed up from their own development processes and experiences. However, it ignores a key issue: the opportunities and challenges faced by developed countries in the West are different from those faced by developing countries, and their bottlenecks are not necessarily the constraints of developing countries' development.
For example: Western countries emphasize the protection of the market and property rights, because since the industrial revolution, the technology of developed countries has been at the forefront of the world, economic development depends on technological innovation, developed countries can only develop their own research and development, rely on invention to achieve technological innovation, after the emergence of technological innovation, invention is protected to stimulate the vitality of the market engaged in research and development.
However, the technology of developing countries has a gap with developed countries, and mature technologies and industries can be introduced, which is also a kind of technological innovation, and the cost and risk will be much smaller than their own inventions, and they can achieve faster technological progress than their own inventions, that is, developing countries have "latecomer advantages", the bottlenecks faced by invented technologies and imported technologies are obviously different, and the areas and methods in which the government and the market will play a role will also be different.
However, traditionally Chinese often have the mentality of "learning from the west", believing that "as long as the experience of the West is learned, it can be used to transform our country, so as to become prosperous and strong like the Western countries."
In fact, Lin Yifu said that after World War II, developing economies that can really catch up with developed countries can be described as "very rare". Successful developing countries or regions are generally incorrect in their policy formulation from the perspective of mainstream Western theories; while countries that develop according to the policies that developed countries consider "correct" are basically unsuccessful.
Infographic. Zhang Jianyuan Cartography
China's rise is not based on plunder or hegemony
In addition to "going its own way", Lin Yifu said that another big difference between China's rise and Western countries is that China's influence is obtained by continuously developing its own economy, through trade in a mutually beneficial and win-win globalization approach, rather than relying on foreign countries to plunder resources.
Lin Yifu pointed out that since modern times, since the great geographical discovery and the industrial revolution, the development of developed countries has basically been characterized by "the weak eating the strong", and they have begun to continuously search for colonies overseas. After World War I and World War II, in fact, they also used their scientific and technological powers and military powers to obtain political hegemony, thereby obtaining or maintaining their control over the world.
However, Chinese culture has always emphasized "self-reliance and self-attainment". For individuals, "self-cultivation and family governance" is the code of conduct. For the government, while its own economy is developing and the people are living a good life, it also hopes that other countries will develop and let the people of other countries live a good life. Moreover, China emphasizes "harmony without difference", "seeking common ground while reserving differences", and stressing that all localities can participate, so that all countries can help each other and develop together.
Due to the huge differences in culture and other aspects, China and Western countries have shown completely different trajectories in historical development.
Lin Yifu pointed out that China's development proves that the road to modernization is not the only one followed by developed countries. The rise of a country cannot only be achieved through the way in which the developed countries eat the weak and the strong, but it is possible to obtain another development path under the conditions of peace, mutual benefit and win-win results.
Data chart: The 3rd China International Import Expo in Shanghai 2020. Photo by China News Service reporter Hou Yu
What is the biggest change in a hundred years?
In 2018, China made the judgment that "the world is in a major change unprecedented in a century".
Why did this change occur? Lin pointed out that a large part of this is due to the rise of emerging market economies such as China, India and Brazil. The most significant change is China, which surpassed Japan to become the world's second largest economy in 2010 at market exchange rates and the world's largest economy in 2014, in terms of purchasing power parity.
The eight countries that dominated the global economy and politics over the past century have now lost the power to dominate the world. In 1900, the Eight-Power Alliance of Britain, the United States, France, Germany, Italy, Russia, Japan, and Austria-Hungary attacked Beijing. At that time, the GDP of the eight countries was calculated according to purchasing power parity, accounting for 50.4% of the global economy.
Since then, the scope of the "core" eight countries has been adjusted, the Austro-Hungarian Empire has collapsed, and Canada has joined. In 2000, G8 GDP was still 47% of the global economy in purchasing power parity terms. In other words, in the past 100 years, the total economic output of other countries in the world has only increased by 3.4 percentage points.
This changed after 2000. In 2018, when the assertion of "unprecedented changes in a century" was put forward, the G8 GDP had fallen from 47% to 34.7% in terms of purchasing power parity, losing its dominant force.
Data map: Aerial photo of Yangpu Port Small Shovel Beach Pier. Luo Yunfei photo
Sino-US relations may ease up in 2050
China's catch-up and overtaking will inevitably lead to changes in the pattern of international competition. Lin Pointed out that the United States feels that its dominance of the world is becoming more and more inadequate, so during the Obama administration, the United States proposed to return to the Asia-Pacific region and allocate its military power to the Pacific. After Trump took office, he launched a trade war and a science and technology war against China, which brought tensions to Sino-US relations.
How do I fix this? Lin Yifu pointed out that first of all, development is the key. China needs to do its own thing and continue to develop while continuing to provide development opportunities for other countries.
He believes that by 2050, China will achieve the second centenary goal, when if China's per capita GDP can reach half of the United States, and China's total economic output will reach twice that of the United States, the world may enter a new stable pattern.
Lin Yifu explained that the reason why the United States launched a science and technology war and a trade war against China is that the current level of science and technology in the United States is indeed higher than that of China.
If the average GDP of Chinese in 2050 reaches half of that of the United States, then Beijing, Tianjin, Shanghai and the five eastern coastal provinces of Shandong, Jiangsu, Zhejiang, Fujian, and Guangdong, the total population of these regions will be about 400 million, which will be at the same level as the population and per capita GDP of the United States at that time. In this way, the population and income level of China's most developed regions are similar to those of the United States, and the level of industrial technology is also close to that of the United States. The technology that the United States can card China's neck is basically gone.
However, China still has 1 billion people in the Midwest, and the per capita GDP of these places is about one-third of that of the United States, and there is still potential for rapid development in these parts. By then, China's economy will be twice the size of the United States and will grow faster than the United States. The United States no longer has scientific and technological advantages, nor is it able to change the fact that China's economic scale is twice that of the United States, and the United States' own development cannot ignore the opportunities brought by the Chinese market, and there will be a basis for peaceful and common development between China and the United States.
China does its own thing and makes good use of its potential, Lin Yifu pointed out that the Chinese nation can achieve rejuvenation, but also to lay a foundation for a new and stable world pattern. China's rise will help build a new, stable international pattern and environment in which all countries can develop together.
The roots of America's problems lie in Silicon Valley and Wall Street
Is China's development at the root of America's problems? Lin Yifu said that most developed countries have problems, always unwilling to find their own reasons, but to push the responsibility to others, to find scapegoats.
Since 2008, China has contributed about 30% of the annual expansion of the world market. If China can seize the opportunity, Western countries can also develop well.
For example, Germany, which has developed the best among European countries, is called a "miracle". Nobel laureate economist Michael Spencer once said that the reason why Germany was able to perform miracles after the 2008 crisis was because of China's rapid development. China has experienced industrial upgrading and technological upgrading, and a large number of new technologies and new equipment have been imported from Germany, so Germany has also developed.
Look at the United States. In recent years, the proportion of middle-income groups in the United States has declined, the income level of ordinary workers has not increased significantly, and polarization has become more and more serious. Lin Yifu said that there are a lot of research that shows that this is caused by Wall Street and Silicon Valley.
The first is Wall Street. After the dollar was decoupled from gold in 1971, the United States took advantage of the dollar's status as the world's reserve currency to advocate financial liberalization, which also provided an opportunity for Wall Street to use the dollar status and capital account opening to enter developing countries to speculate and make profits. A large number of dollars flowed into the stock, bond and other markets of emerging market countries and quickly withdrew, causing financial instability in other countries. Studies have shown that in 2007, several Wall Street firms controlled 40 percent of all corporate profits in the United States.
The second is Silicon Valley. American technology is at the forefront of the world, and it is constantly inventing new technologies itself. Through patent protection for new technologies, Silicon Valley can be used as a market all over the world to earn high revenues.
From the 1970s to the 1980s, the development of the United States mainly relied on these two parts. But the two can create very few jobs, and the problem that comes with it is the hollowing out of manufacturing. Some of the remaining industries in the United States are general services with low added value. The service sector absorbs a large number of people, but the income level is very low, and the wealth is concentrated in the hands of a small number of people on Wall Street and Silicon Valley, which is the main source of domestic problems in the United States.
Wealth is unevenly distributed, taxes should be raised, and then this wealth brought about by scientific and technological innovation or financial liberalization should be taxed and partly invested in improving the country's infrastructure and partly to improving education so that there can be more and better jobs in the country.
But the United States did not do this, but attributed its domestic problems to China's rapid development and China's globalization. Therefore, Lin Yifu stressed that the United States should find reasons from itself and find solutions that are beneficial to the United States itself and other countries in the world. (End)
Source: China News Network