China economy in 2030: economy in transformation // Shantong Li
Shantong Li, Jianwu He, Development Research Center of the State Council
Main content:
• The challenges of China’s economic transformation
• The feature of DRCCGE model
• Scenario design for China’s economic transformation
• Prospect for China’s economic transformation based on simulations
• Conclusion
For reference: S. Li, J. He. The Prospect of China’s Economy in 2030: the Economy in Transformation. 3 September 2019. Russia, Sochi, 27th Inforum Conference, URL: https:// ecfor.ru/publication/china-s-economy-in-2030-transformation/
This presentation happened 3 September 2019, Russia, Sochi at 27th Inforum Conference.
The conference & materials: https://ecfor.ru/27th-inforum-world-conference/
Playlist with the other videos from the conference: https://www.youtube.com/playlist?list=PLJBJFs8UgQgpmWWFzqw87jdwOBQXQmLfu
Inforum’s site: http://www.inforum.umd.edu/
Inforum, or Interindustry Forecasting at the University of Maryland, was founded nearly 50 years ago by Dr. Clopper Almon, now Professor Emeritus of the University. It is dedicated to improving business planning, government policy analysis, and the general understanding of the economic environment.
The host side was the Institute of Economic Forecasting of the Russian Academy of Sciences. IEF RAS specializes in fundamental, applied and exploratory scientific research in the field of analysis and forecasting of the socio-economic prospects of Russia and its regions, and the development of recommendations and proposals with a goal to improve the quality of economic policy in Russia. The site is https://ecfor.ru.
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Notes:
The Pressure of China’s Economic Transformation
• The continuing low-speed growth of the global economy has weakened the external dynamics of China’s economic growth
• The structural contradictions in some major economies have not yet been resolved fundamentally
• From the point of long-cycle of economic growth, the global economy will gradually return to the normal growth trajectory led by the new technological revolution.
• The slowdown of global population growth (the average annual decline from 1.3% in 1980 ~ 2014 to 0.5% in 2015 ~ 2050) and the aging population (the average annual growth rate of the working-age population has declined from 1.7% in 1980 ~ 2014 0.3% between 2015 and 2050) will become an increasingly major drag on global economic growth.
• Factor prices have risen sharply, and China’s low-cost competitiveness has declined.
• The peak of China‘s working-age population has arrived, it has reached the “Lewis turning point” and the labor cost is on the rise. The most obvious is that the rate of wage increase for migrant workers has accelerated substantially.The annual average actual wage growth rate in 2008-2012 is 14.4%, which is more than double that in 2001-2007 the price of land is rapidly rising. Before 2007, the price of industrial land basically remained at 400-500 CNY / square meter, it rose rapidly afterwards and has nearly doubled by the end of 2017
• The population aging is accelerating, the total dependency ratio is falling instead of rising, and it will be hard to sustain for a pattern of high savings rate and large investment
• The younger population structure has supported China’s high savings and large investment over the past few decades.
• The savings of the elderly population is lower than that of the young adults. The aging of the population will bring down the savings rate of the residents
• The aging of the population will also increase the government’s burden of public expenditure.
• The population of China will be aging more and more. The old age dependency ratio will rise rapidly from 13. 3% in 2015 to 25. 3% in 2030.
• The total dependency ratio is accelerating from the previous trend of declining and the lowest percentage of 35. 6% in 2010, up to 48% in 2030.
• As it is getting closer to the cutting edge of technology, the late-mover advantage in technological progress has weakened.
• In general, catching-up countries, far from the cutting edge of technology, can achieve catch-up in the aspect of technology with the introduction of technology and technological imitation in a relatively short period of time.
• As the level of development improves, the space for technological catch-up becomes smaller and the pace of technological progress continues to slow down in 1960-1973, Japan’s average annual growth rate of total factor productivity reached 5.58%, but declined sharply afterwards.
in 1980-1990, South Korea experienced a growth rate of total factor productivity of nearly 3%, which dropped below 1% afterwards.
