can china smoothly and successfully shift to a sustainable growth model
DESCRIPTION
Can China Smoothly and Successfully Shift to a Sustainable Growth Model. Andong Zhu Tsinghua University. Outline. Introduction The Growth Models in the past 30 yeas Opportunities and Challenges to New and Sustainable Model Conclusion. Introduction: From Old China to New China. Semi-Feudal - PowerPoint PPT PresentationTRANSCRIPT
Can China Smoothly and Successfully Shift to a
Sustainable Growth Model
Andong Zhu
Tsinghua University
Outline
Introduction The Growth Models in the past 30 yeas Opportunities and Challenges to New
and Sustainable Model Conclusion
Introduction: From Old China to New China
Semi-FeudalSemi-Colonial
Backward
IndependentEconomic & Social
Construction Balanced
Market-OrientedGDP Growth FastIncome Inequality
Social Development Environment
Sustainable (Economic,
Social, Environment) Development
1949 1978 2002 or 2009?
A Family in the “Old China”
1948: Hyper-inflation in China
The Achievements of New China before 1978
Preliminarily Industrialized the Economy Established a Independent and
Comprehensive Industrial system GDP Growth Rate Averaged at 6.68% per
year during 1953-1978 Life Expectancy increased from around 35
to about 67 years.
The Growth Models of New China 2.0
Achievements Evolvement of the Growth Models Problems
Fast GDP GrowthGDP Growth Rate of Chi na 1979-2008 (%):
7. 67. 8
5. 3
9. 0
10. 9
15. 2
13. 5
8. 9
11. 611. 3
4. 13. 8
9. 2
14. 213. 913. 1
10. 910. 0
9. 3
7. 87. 68. 48. 3
9. 110. 010. 110. 4
11. 6
13. 0
9. 0
0
2
4
6
8
10
12
14
16
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Huge Amount of Foreign ReservesForei gn Reserves of Chi na ($Bn): 1978-2007
0 1 -1 3 7 9 8 3 2 3 3 6 11 22 19 21 52 74 105140145155166212286
403
610
819
1066
1528
1946
0
500
1000
1500
2000
2500
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Evolvement of the Growth Models
Planned EconomyWith
Market Mechanism
Balanced/Inward Looking Growth
Marketization;PrivatizationLiberalization
Over-dependentOn
International MarketAnd
Investment
Sustainable (Economic,
Social, Environment) Development
Relatively Balanced/Outward Looking Growth
Imbalanced/outward Looking New growth model?
1992 2001 20091978
Components of Domestic Expenditure as Shares of GDP
0%
10%
20%
30%
40%
50%
60%C/Y G/Y IF/Y
Exports and Imports as Shares of China's GDP:1978-2006
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Year
X/Y M/Y
The Over-dependency on Investment
中国的投资率(%): 1978-2007
38.2
36.1
34.8
32.531.9
32.8
34.2
38.137.5
36.337.0
36.6
34.934.8
36.6
42.6
40.540.3
38.8
36.736.236.2
35.3
36.5
37.9
41.0
43.242.742.6
42.1
30
32
34
36
38
40
42
44
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
The Consumption Ratio in ChinaThe Consumption Ratio in China
(%): 1978-2007中国的消费率
62.164.4
65.567.1 66.5 66.4 65.8 66.0 64.9
63.6 63.9 64.562.5 62.4 62.4
59.3 58.2 58.1 59.2 59.0 59.661.2
62.3 61.459.6
56.854.3
51.849.9 49.048.8 49.1
50.852.5 51.9 52.0
50.8 51.650.5 49.9
51.1 50.948.8
47.5 47.2
44.4 43.544.9 45.8 45.2 45.3 46.1 46.4
45.243.7
41.739.8
37.736.335.3
35
40
45
50
55
60
65
70最终消费支出 居民消费支出
Sweden 25, India 32.5, United States 40.8, China 44.7, Brazil 59.1
Income Gini Coefficient of China: 1978-2006
0.300.29
0.310.310.30
0.28
0.240.26
0.320.32
0.38
0.340.33
0.350.37
0.390.400.390.370.37
0.380.39
0.410.40
0.430.440.440.450.46
0.100.15
0.200.250.30
0.350.40
0.450.50
Widening Income Inequality
Househol d Fi nal Consumpti on Rati o and the the Rati o of top 20% popul ati on' si ncome agai nst the Bottom 20%, 2003
40
60
80
100
0 2 4 6 8 10 12 14 16 18 20Q1/ Q5
Hous
ehol
d Fi
nal
Cons
umpt
ion
rati
o (%
)
What are the Major Reasons of Inequality in China?
Monopoly? Corruption? Privatization?
Ownership Income distribution Ownership Labor Relation Income distribution
State_owned
Cl ol l ecti vel y Owned
Domesti c Pri vate
Forei gn
0
10
20
30
40
50
60
70
80
90
100
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Share of Chi nese I ndustrial Output by Ownershi p(%):1990-2004
The Laid-off/privatization Movement(Mn)
Urban employment
State-owned Units
Collective-owned Units
highest level 27331(2005) 11261(1995) 3628(1991)
lowest level 19040(1995) 6488(2005) 810(2005)
change 8291 -4773 -2818
Informalizing Labor Market
0
5000
10000
15000
20000
25000
30000
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
EMP- CI TY- SOEEMP- STF&WRKEMP-CI TY
What New Growth model Needed in the Chinese Economy?
Balanced/sustainable Economic development Less depend on international Market Less depend on InvestmentIncreasing Private Consumptionincreasing income of the poor & improving the Social Security Net(re-)nationalization of enterprises; more strictly
regulate the market
Opportunities and Challenges to New Model
Opportunities The Drain Up of the Rural Labor Reserves The Current Crisis (International Market; US
Model; Theory, etc)
Challenges
Low External Debt RiskRisk Indicators on External Debts of China (%): 1985-2007
0
2
4
6
8
10
12
14
16
18
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
0
20
40
60
80
100
120
Debt Service Ratio Liability Ratio Foreign Debt Ratio (RHS)
Enough Room for Fiscal and Monetary PoliciesChina Still Has Room to Loose the Money Market: 2005.01~2008.11
5.0%
5.5%
6.0%
6.5%
7.0%
7.5%
8.0%
2005
.01
2005
.03
2005
.05
2005
.07
2005
.09
2005
.11
2006
.01
2006
.03
2006
.05
2006
.07
2006
.09
2006
.11
2007
.01
2007
.03
2007
.05
2007
.07
2007
.09
2007
.11
2008
.01
2008
.03
2008
.05
2008
.07
2008
.09
2008
.11
7%
9%
11%
13%
15%
17%
19%
Interest rate of one year loans Required Reserve Ratio (RHS) Required Reserve Ratio of Small and Middle sized FI (RHS)
At the end of 2007, total public debt was RMB3.4 Tr., as 13.8% of GDP and 67.0% of government revenue
The Composition of the 4 Tr. RMB Stimulus Plan
The Composition of the 4 Trillion RMB Stimulus Plan
Housing for the Poor, 400, 10%Rural Construction, 370, 9%
Saving Energy and Decreasing Emmission, 210, 5%
Infrastructure Investment, 1500, 38%
Socail Affairs, 150, 4%
Industrial Restructuring, 370, 9%
Re-construction after Dissaster, 1000, 25%
Shanghai Stock Market Comprehensive Index:1990.12.28~2009.3.12
0
1000
2000
3000
4000
5000
6000
7000
19
90
12
28
19
91
07
09
19
91
12
19
19
92
06
04
19
92
11
16
19
93
04
29
19
93
10
08
19
94
03
28
19
94
09
06
19
95
02
24
19
95
08
08
19
96
01
19
19
96
07
15
19
96
12
26
19
97
06
25
19
97
12
10
19
98
06
08
19
98
11
18
19
99
05
19
19
99
11
04
20
00
05
09
20
00
10
24
20
01
04
18
20
01
10
10
20
02
04
08
20
02
09
27
20
03
03
20
20
03
09
11
20
04
03
12
20
04
08
31
20
05
03
01
20
05
08
16
20
06
02
13
20
06
07
31
20
07
01
18
20
07
07
11
20
07
12
24
20
08
06
11
20
08
11
24
Conclusion
The growth pattern of China has to be changed even without this current Crisis
It will not be Easy to transform China to a really Sustainable Development Model Smoothly and Successfully
Comments and Questions Welcome!
Thank You!