Abstract On the 21st, Beijing time, the US National Interest Magazine website published an article saying that the West does not need to worry more about China's economic growth rate falling below 7%. In fact, in the transformation of China's economy from investment-oriented to consumption-oriented, it is expected to experience a lower period for a long time...
On the 21st, Beijing time, the US National Interest Magazine website published a document saying that the West does not need to worry more about China's economic growth rate falling below 7%. In fact, in the transition from investment-oriented to consumption-oriented in the Chinese economy, it is expected to experience a slower growth rate for a long time. The real challenge for China is to integrate the implementation system of policies, overcome political difficulties, and ensure that local governments truly become the driving force for transformation. As long as it is properly handled, waiting for the Chinese and the world, it will be a better future. On Monday we learned that China’s economic growth rate continued to slow, with 6.9% in the third quarter. Although the sharp slowdown that some economists are worried about has not occurred, the growth rate has fallen below the 7% mark, the first time since the global financial crisis. If we combine the slump of the Chinese stock market this summer and the sudden currency depreciation, if anyone thinks that the Chinese economy has reached the edge of the cliff, it is completely understandable. However, the real theme of the Chinese story is not a serious crisis, but a long-term challenge. The road to transformation is bound to be bumpy, and China's highly fragmented policy implementation framework can only make the bumps further magnified. However, if the disposal is in place, or if it is handled well enough, waiting for the Chinese and the world will be a better future.
Since the reform and opening up, the Chinese economy has enjoyed double-digit growth rates, with an average annual growth rate of more than 10% over the past three decades, helping hundreds of millions of people get rid of poverty. What needs to be seen, however, is that the high rate of economic growth is largely due to the characteristics of its “catch-up†development and therefore cannot be sustained forever. When China is still a low-income country, there are many high-return investment opportunities there. Capital investment has created a boom in manufacturing and exports, and has contributed to China's growth. The law of diminishing returns tells us that with the constant influx of capital into a country, the lowest-position fruit will be taken away and investment will continue to decrease. However, although the paper policy is also encouraging the economy to shift from investment-oriented to consumption-oriented, at the operational level, Beijing still chooses to stimulate more investment and help a post-financial crisis era with a round of infrastructure boom. growth of. Last year, fixed-asset investment still accounted for nearly half of China's output. Although such a stimulus plan will increase the growth rate, it also objectively delayed the important and necessary transformation.
The biggest obstacle to transformation is actually political. Although China's policy formulation is highly concentrated, Beijing's leaders control everything, but the implementation of the policy is highly fragmented. From many perspectives, China's political system has the taste of quasi-federalism. The fact of most policies, the provision of most services at the level, depends on local governments – from the province to the city, to the village level. Although the central government collects most of the taxes, local governments need to provide 95% to 99% of health, education and security services. Although in essence, the State of New York is offering similar subsidies to Mississippi, the relationship between different parts of China is much more variable than in the United States. Local leaders need to rely on the local business community to ensure local employment and stability. When Beijing advocated economic transformation and emphasized the shift from manufacturing to consumption, local governments could only see factories closing, residents losing their jobs and losing resources. There is still an undisclosed political culture above all of this. Under such a background, it is almost impossible to openly balance various contradictory interests. The difficulties and obstacles of China’s structural reform can be imagined. .
However, if China can successfully overcome political obstacles and implement the transformation in the entire mechanism, the country will be able to participate in the global market for better products and services in a stronger capacity. The Chinese are rapidly becoming richer and richer, and the level of education is getting higher and higher. The "Chinese Dream" has inspired the vitality of the middle class, whose number is increasing and its influence is growing. Although the number of Chinese middle class is currently only a quarter of the total population, it is already comparable to the total population of the United States. This is a huge, expanding market, and their continued consumption will soon surpass the scope of domestic goods and expand into the goods and services of developed countries, and many foreign brands have clearly realized this opportunity, and In taking action.
However, developed countries want to really enjoy the benefits of China's rising middle class, and perhaps need to wait patiently for a while. To become a consumption-oriented economy, for China, it is highly economically complex and politically, it also needs to overcome a series of difficulties. Under such a transformation, China is likely to need a long period of low growth. Despite the financial crisis, the entire world has been relying on the Chinese economy for a long time to promote global growth, but in the transformation of China's economy, the international community really has no way to help speed up this process. Fortunately, most of the developed economies have already ushered in or are about to usher in a moderate recovery. They also give everyone a certain amount of space to adapt to the so-called "new normal" of Chinese President Xi Jinping. If the United States, Japan, and Europe can work to address the biggest threats of their own prosperity, such as income inequality and weak wage growth, the global economy will be better prepared to meet the new generation of middle-class consumers in China. Benefit tomorrow. What we can do now is to wait patiently for the Chinese leaders to take us to that moment. (è¡¿)
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