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economic rise of China: FT editor of the Chinese net tension Fen
2006 9
Martin Tuesday, 19 October. Wolf: Financial Times (FT), chief critic of Economic Affairs (hereinafter referred to Ma)
tension Fen: Financial Times FT Chinese Web editor (the sheets)
tension excited: Martin, not long ago you again in Beijing with Chinese government officials, economists and think tanks are more in touch. 1976? Mao Zedong's death, to the present, has gone a full three years of market economic reforms initiated by Deng Xiaoping has nearly three decades. looking back, you think to the operation and performance of its economy, China is now in the end is what stage of development?
Martin. Wolf: first, of course, China's sustained economic growth. Over the past 20 years, China's GDP growth has remained at double-digit or near double-digit level, which is rare . However, having said over the original of China, a poor country with weak economic foundation, it is very low base, it should be great potential for development. At present, China's per capita GDP and the international price level is less than a fifth of the developed countries one. Therefore, it is to improve productivity and outputs, there should be a great potential to be tapped.
Second, China is very successful implementation of the degree of integration with the global economy has been quite high, has been very successful export platform: it is now the world's third largest trading nation, it is the number of production of many commodities, are trying to have a greater international competitiveness. and born out of Russia, former Soviet Union compared to the situation in China was different: a huge amount of goods produced in China, with its global competitiveness. Meanwhile, the people are hardworking, full of hunger and thirst for knowledge and education, which is undoubtedly the most important asset. of any State Government are defective China clearly was flawed. But it is investment in infrastructure, and access to resources from the global aspect, the thing it has done very well. In the eyes of economists, these are the economic operation of the system positive, strong factor.
Photo: Western countries used to be China's reform path is too simple list of the card to the mouth of a bottleneck? another way, this development strategy has long been the strengths and positive factors present, it is the problem surfaced, the examination system of China's current economic weakness.
Ma: I think there are three economic dimension, a political dimension. These weaknesses related to each other.
First of all, China is very dependent on foreign technical expertise, skills and ability, in particular, the success of China's exports, its dependence on foreign expertise is high. and Japan and even South Korea, the Chinese innovation in technology did not make much progress in the creation of world-class enterprises have little contribution. Honestly, I think the current situation still is, despite one or two exceptions. a large extent , China is still an export platform. Some critics will say that if you have a good look at China, the real problem, like Southeast Asia or Northeast Asia, also dependent on capital inflows, the moment such a strong competitor mm India mm appears, this competitive advantage will disappear. This is its first major weakness.
Zhang: So, basically, China's long-term goal of sustainable economic growth, by the highly export-dependent growth model completely unreliable?
Ma: Yes. This is not just because China is dependent on exports down. Many successful countries have done dependent on exports, but China's exports to foreign institutions have a great dependency. in all its exports , approximately 50% -60% of those foreign-invested enterprises, foreign technology and high dependence on foreign capital, this situation may not last long. In the long run, the growth process of a big country, must be rooted in the development of their own technology and skills. so this is a major weakness.
the Chinese economy a second major weakness lies in its extreme dependence on investment, not just the high level of investment, but investment is steadily increasing, but their consumption GDP growth has been lower than the growth rate, I do not know how long this situation will continue.
third weakness is the use of resources for various types of high density, its extent is unbelievable. If certain types of resources become very expensive price, then its profits would be squeezed.
a related issue, related to the political level. I think it is one of the biggest problems in its political system. from the definition, In a one-party country, the party is the law, the government is the law, it is difficult to avoid. This means that, no matter how you said the final property rights is difficult to determine, they can not be guaranteed, because the one-party state system , if the Indeed, widespread, and perhaps even intensified, which resulted in substantial waste of resources and social unrest, and the people displeasure and distress in the long run, this situation had to change. As we have other property rights system defects (political system defective) in the country have seen, this change will occur sooner or later, but no one knows exactly when.
My own guess is that mm Anyway, just a guess: there are 10 to China's economy 20 years of rapid growth. I can not imagine, if you do not expand the depth of reform, China can continue to pack in 20 years held a high speed. in that line before the arrival of many of the problems may become more serious.
Photo: Martin, you have the perspective of the economic structure from the so-called The current economic strategy or policy assessment? any weak link?
Ma: I think that if the various constraints are taken into account, in fact, China's economic development strategy is very good, what does not exist weaknesses. But past and present, its strength lies in restricting China will try its best to give everything, determined to maintain the existing one-party system. All of this means, partly for this reason also, the basic production structure in China very weak. From the beginning of the founding of China to the present, it has not been very sound structure of the domestic industry. All constraints taking into account the above two points, China's economic strategy has been very good for him.
in my opinion, In addition to They do not have other means can China's highly integrated into the global economy open to foreign investment, open coastal areas. with South Korea and Japan, the Chinese despite the dependence on trade, this is the only strategy can be sought. So said that, given these constraints (in particular, the fundamental constraints), China's economic strategy has been very good. and in the past, China is still off some of the problems encountered in going around.
Zhang: If ; Cultural Revolution ideological blueprint. Now the consensus is that this is longer than the final design of the grand blueprint for the failure of the revolution. And after 1978, Deng Xiaoping's opening up and reform, whether black or white, or cautious, pragmatic and function longer than , neglect of the macro design, step by step, take one step back two steps. Xiaoping has a soul, if in the days, whether the Chinese will feel strange situation or surprised, imagine he was a year of revolution for people to strike a food and clothing, so that China to embark on the reform path of no return, and finally gave birth to an emerging economic power. To some extent, is it possible that the path of reform there is a contingency factor?
Horse: This is a very interesting question. You make me fathom the idea of the year Deng Xiaoping. I do not know this time he will see how China has changed. In my opinion, his words are very simple. I think some of the details may be accidental. but not in the direction of large chance Obviously, not only after the fact. I think that even this strategy has been very clear at the time, they try to do, that is, the idea is this: We want to build a strong country, a strong China, confusion is over. Historically, we did a very traditional way to build a strong China, a strong centralized state bureaucracy. Now we must let China become prosperous, to become part of the modern world.
How to become a part of the modern world? My understanding is that of Deng Xiaoping, we must allow market forces to suppress market forces would be a disaster. Mao Zedong, Deng Xiaoping has repeatedly been severely criticized, it is for this reason that he always believe that this ideological hostility to the market economy is very funny, and a sense is also very Chinese way, and the History of China in the past is inconsistent. So he turned to the market economy. Then you will ask: how to market economy in China? there are two things you must do.
First, we must liberate agriculture, because agriculture is the most important economic sector. Therefore, China Agricultural reform is to start from the liberation. Second, historically, China has accounted for a large proportion of the world economy, now is the first time in history only a small part of the world economy, but not very much is part of the backward , rather than history, as we have a very advanced part. In this case, if you want to enter the modern market, the second thing you need to do is to integrate into the world economy. So, it all gets completely logical. So, in my view, the political system of communism, the establishment of a more market-oriented economy, the liberation of agriculture, the full liberalization of international trade, and its direction are rational. Of course, this reform has never explains why the action must be such a go. and it is a matter of course originated from the development goals of Deng Xiaoping, that is to become strong and prosperous China.
Zhang: In recent years, have you seen some Chinese officials, especially in charge of economic policy, trade or banking issues officials. you remember, they are unexpected rise of the Chinese economy in the world, international political and economic impact of sharp increase, whether some surprise, there is no adequate psychological preparation?
Ma: First of all, I guess, they must on the Chinese economy performance was pleasantly surprised. from technical level, because the days of the last century, relatively hard 90, experienced a longer time of deflation, there is a great economic ups and downs, economic growth may be weaker than some of the data shows. So I think they feel the last 5 years, some good, a lot of surprises. I think the reason they did not change the economic strategy, one of the reasons is that China's economy is heavily dependent on an undervalued exchange rate. We later talk about this issue.
I think that when you discuss issues with Chinese officials, they certainly will be discussed more in the domestic problems and challenges. They clearly than anyone else the many domestic problems and enormous challenges, They know what should be done.
so. They generally will not consider the world, will not consider the impact of China to the world. And suddenly, because of some occasional huge influence policy decisions, such as the exchange rate of 1994 incidents 1997-98, insisted the decision not to devalue and so on. Then, as China is growing so fast, so that they suddenly realized that China's potential impact. I think China in the global economy has great influence, it is reasonable thing, but Chinese officials did not really start to understand how to deal with this situation. I think the core of their foreign economic policies, as same as China's foreign policy, that is, work hard, continue to grow, continue to develop, concerned about their domestic problems, let someone else worry about world events .25 years later, this situation may change, but now this is their attitude.
but the problem is that the world will not make China an exception. I think they are problems, not only unique but also unprecedented. Although the United States the rise of somewhat similar, but more serious problems facing China. Because much of China, even in China is still underdeveloped, it has the world had a great influence .
I think the international community the responsibility imposed on China's growing on them was an accident, not all kinds of surprises, because I think this is not something they themselves want to deal with; in this particular historical side Lan Wei, animal husbandry, both conical vent hiss gown Lu Hao Xie Du Xian Jiao Tuo Ne Nuo model taking into account mechanical removal Asahara M veranda quail risk parameters U Bolt ㄌ Ying archery? lt; / p>
Zhang: So, they psychologically and not ready. in surprise when China's economic success, they're just passively take on new responsibilities and roles of international?
Ma: I do not personal relationships with top Chinese leaders. but I do not believe they have to be fully prepared. In my opinion, a new generation of officials, many of them are very introspective characters, their power in the Communist system, step by step development of their political career. Although they younger, in a totally different environment to grow up, But they and younger, a comprehensive education in foreign countries who are different. you go to China, many more than 30 years of age, 40 years old or 50-year-old man, had in study abroad, they are the responsibility of China in the world can have a better understanding. Now many Chinese officials are not. Perhaps there will be changes in 20 years.
I think they do not fully understand the outside world, they do not understand that they have joined various international organizations or organization. Although the Chinese as early as 5 years ago joined the WTO, but if the past in people not yet ready for it. And they will find that this responsibility very difficult. you can see, not only economically so, in foreign policy as well. They do not know, and do not fully understand that China and the rest of the world Rise of Nations, how much fear, anxiety, tension, anxiety and hope.
(last)
tension excited: Martin, you mentioned earlier, the economic rise of China, at the beginning some of the adjustment of its role reluctantly. This makes me think of a U.S. official said last year the words to the effect that wants China to become a responsible stakeholder. In your opinion, to become a true trading nation, China's political and economic What conditions need to have?
Ma: This is a difficult question. spoke these words is the U.S. Deputy Secretary of State Robert Zoellick, has retired. Last fall I wrote a column about this issue. the main article Some people in Washington to answer questions. They regard China as the next enemy. Zoellick's strategy is to allow cooperation between China and the U.S. continue to be an important goal of U.S. policy. In the United States, this is a topic of huge differences.
Therefore, it is important to see the United States domestic politics. Now, Zoellick has left the Bush administration, no one knows the policy will go. But I think the key point is, the U.S. needs to think about, whether it is negative responsibility of the State? This may be a very interesting question. China will become a world power, it is now an important part of the world, and it depends on the continued development of open-door policy, depending on whether it allows other countries People believe that the rise will not pose a threat to them.
For these reasons, I have repeatedly said that this point of view: as a nation, when a performance of good international citizenship, support cooperation in the international order, in full compliance with China interests. regardless of whether the United States, I think that it is willing to pursue a model, and I feel that in China, considered the issue that most people would agree with that view. in part because they do not want conflict, they want 20 years of peace. I think they definitely do not want conflict, they must want peace in the near future, because they need to develop.
Zhang: What does this mean? China hopes that the low profile, for more time to develop, that rely on to ensure that? its preconditions do?
Ma: I think, in essence, this means that it is to maintain an open trading system, trade liberalization, open-minded, because China will become the world's most important exporting country, it needs a market, otherwise people will not accept it exports.
I think it means that China's policy to leave to avoid giving the looting and other acts too impressed. China's huge foreign exchange reserves It seems to the outside world has left such an impression: it is desperately trying to use its massive reserves to drive down the inflation rate, in order to win more than the rest of the world's competitive advantage. for the long term, this is not for other countries tolerated. Therefore, China's exports is seen as the interests of other countries is the cost associated with this continued rapid growth of its trade surplus. China's trade surplus is huge. If it continues to grow, I think this may be is very large, it will cause friction with its national scale. Therefore, it is necessary to consider the international level, trade policy, and foreign exchange and macro-policy linkages. IMF is now required to do so, I think, the Chinese for their own interests, should adopt a cooperative attitude.
I am concerned is the third largest economy of resources. the desire of sourcing in China is absolutely reasonable, it is clear that it needs resources. It needs to consider is the (rest of the world also will consider this issue), not allowed to develop over-reliance on resources, especially energy. I think we in a very long period of time will be in the era of high energy prices. but important point is that China's thirst for resources Do not translate into the eyes of the West support the regime of some bad. Here is a question of degree. Where children boundaries? boundaries do exist, but it is difficult to judge. intervention of such things, such as Zimbabwe to controversial. Sudan issue is also very difficult.
relation to this is that, as proposed in my recent column, as it is important to everyone to establish a principle that energy and other resources should be in accordance with the international price transactions, not because beneficial and win their own resources. commendable is that the U.S. did not do so, at least since World War II did not do so, they are traded in accordance with international prices.
on trade, I want to talk about the last thing that now the emergence of a tide of bilateralism, the Chinese are involved. Doha Round of trade talks broke down, the situation is bound to intensify. However, China does need to realize that it is now becoming an open international trading system enjoy the greatest interests of the country, naturally with the nature of multilateral trade. It is always in the interests of trade will not really be local, because it was too large, region has not tolerate it.
Therefore, I think, as a responsibility to stakeholders, and of course I am not saying that all responsibility should be borne by the Chinese, there are other more important players. But China does need to consider how to support the multilateral system, because that is what we all want the trading system. at least in my opinion, this is a responsible stakeholder.
Zhang: You just mentioned that in the past few years, the conflict between Beijing and Washington. In my view, these conflicts seem to have shifted to more trade, finance and exchange rate levels, rather than the eighties and nineties, as is often around the ideology of human rights or geopolitical. the next decade, the main theme of Sino-US relations are highly subject to the trade and energy question? For China to buy from South America and Africa market resources, the United States has expressed displeasure clear. It is very care about China and Cuba, Venezuela's cooperation in the energy sector. But China's position is very clear, to ensure sustained economic development, we must adequate energy supply security. In your opinion, the trade between China and the outbreak of severe or energy conflict is inevitable, the only question?
Ma: It appears that the conflict in this area is absolutely possible. In addition, I must be emphasized that we all can clearly see that in the energy supply, the United States has always supported the conservative and authoritarian regimes, to them as the main source of oil imports. So far, the U.S. major oil-importing country has been Saudi Arabia. This is a long-term relationship, dating back to World War II. This is the essence of the transaction, we will not ask you how to rule the country too, but in return, you have to provide me with oil. a lot of oil to the lack of democracy and by the very great corrupt people rule.
So I do not think we can ask the Chinese to buy oil from certain countries do not. I think that they can be anywhere in China to buy oil. a large extent, the criticism of China is quite reasonable. But China is living in the real world, basically it can do two things. First, it does not have to support these countries political system is defective, because no matter who rules these countries, which need to the sale of oil. So, you invested in the funds in these countries should be closely monitored. As time goes by, the U.S. also recognized that one will be a lot of money into oil, you thought it would be very friendly will help you, in fact, extremely dangerous this practice can look at the example of Iran to clear. Therefore, China should realize that its interests are resource or energy, rather than a country or government. is energy, the total is to sell the.
second, and more important point: All these resources will eventually enter the global market in China, in order to buy oil from Sudan to China on the line. This means that the United States from other Local purchase of oil, while the price remains the same. In this world, really important, and it is only important that the global supply and demand.
If we gradually find that China is trying to acquire and control resources supply, and prices lower than the global market access to these resources, which would create a dangerous situation. because the United States will follow suit. I think that at this stage, China can not afford such a competition for resources . Therefore, I think, the Chinese investment in these countries, the exploitation of their resources to ensure their oil flow, which is quite important, and very reasonable, but we must understand that this is a global market, in order to cure the global oil market unlikely. Even with this possibility, and once you try to do so, it will lead to war. because the oil resources around the world need. If we can not reach a consensus, according to market rules to share these resources, we will be faced with war.
Zhang: You mentioned earlier that China may be extended 15 to 20 years of high growth. If China wants to maintain the current growth rate. its oil and other energy consumption will inevitably rise. So, the total energy consumption will increase substantially the number?
horse: may be doubled.
Photo: to the current global oil supply and demand point of view, do you think the world really have enough energy to meet China's sustained economic growth it? In addition, China will become a victim of its own economic success? global oil prices remain high there seems to be that China's cost competitiveness in effect, correspondingly weakened?
Ma: First of all, I do not know what the future of the global oil outputs. You know, I was just writing about, the potential market for the supply of oil is controversial, I am of the interpretation is that the next 20 years (in fact, in the end no one knows how many years), the supply of oil volume may increase, but this is the case of the marginal costs increase. In essence, oil prices will continue and is likely much higher than the 1986-2001 levels before and after. was when the oil at a low price, that lower oil prices might never reproduce.
oil prices will remain at 60 or $ 70 per barrel, and now controversial, in my opinion, oil prices remain that level is not realistic. We will enter a period of high oil prices. It also means that China will inevitably continue to rely heavily on coal. In such a global tender energy pattern, two conditions is bound to happen.
first species status, China's energy demand is pushing up global oil prices, will force the developed world more efficient use of energy. current oil use in the developed world still accounts for most of the world. U.S. per capita energy use in China, higher than about 5 times, I think it might be 10 times. U.S. energy use is wasted. and in other developed countries, although less waste, will compel them to effective use of energy. We will open more fuel-efficient cars, use more insulation material, do not use air conditioning, all of these conditions are going to happen, we will abandon those energy-intensive industries. All of these are obvious.
I think that compared with developed countries, the actions of the past China will have to pursue an energy-efficient economic growth path, as the future resource prices may be higher. It also means that some characteristics of China's economic growth may have to adjust or improve, we must alleviate the extreme dependence on industry , to do everything and make efforts to limit use of the lowest energy.
the second case, the growth in global energy use will slow down. But it is worth mentioning is that China's energy use will growth, according to my own estimates, over the next 20 to 25 years, Africa and China's energy consumption will double. India is the same. However, if compared with the United States, China's energy demand in the global share of total demand remains very small. If China is to meet their energy-hungry, have to squeeze the needs of other countries, which will have a lot of friction. In this world of high oil prices, the friction will certainly be the United States of course will not be happy, But it can not do anything. Therefore, the key is to reduce the energy-intensive use, and explore new sources of energy. I'm sure that China will have to be durable and energy, a significant investment, including solar energy, etc.,. current high oil prices high, may encourage States to find more oil fields into larger scale production. The scenario is not impossible.
(in)
tension Fen: Now, China and the U.S., China and tension between Western countries point to another, the yuan exchange rate issue. RMB Beijing last July made a slight adjustment of 2.1 percentage points. China is very clear that Washington and the pace of appreciation of RMB exchange rate reform is not satisfied. Several months ago, the U.S. dollar against the RMB exchange rate for the first time breaking 8. remember that you have said many times before, for China, it is much room for appreciation of the renminbi is 20% or 30%. However, the recent projections, it can only see the yuan snail-like crawl, very slowly, the appreciation?
horse: This is basically the situation is currently taking place. The Chinese Government will maintain this situation as long as possible. In view of wage growth in China is relatively small, while productivity growth is quickly, and fixed exchange rate, China will continue to enhance the competitiveness, understand this is very important. The reason why the Chinese government wants to maintain this status quo, because the export growth of China's economy is currently an important part of the overall growth pattern, They fear that if the slowdown in export growth, overall economic growth will slow down accordingly.
My answer is that such judgments to some extent the above is a kind of illusion, but it is not entirely an illusion. The reason is that if you improve your exports to overseas sales of these goods, part of the funds to lend to other countries to buy your exports, your money out loans from foreign exchange reserves, then one day rates rise, you will lose large sums of such loans funds, at least in terms of this currency. So in a way, this success the export side, part of You benefit from their products continued to decline, so you may become poorer than before. My view is that, relative to import prices, export prices of such intention to underestimate the practice, not necessarily in line with China's own interests .
If you consider that China's domestic situation in the field, you can spend more, rather than loans to foreign investors to buy commodities, the more obvious shortcomings of this approach. I think, surprisingly, is that China's export ratio is higher than South Korea, and small scale services, public services, the scale is too small, the key issue is not the exchange rate (I think the yuan should appreciate), but the needs of economic balance. I think that economic restructuring in China's interest, at present, the export growth in order to prevent demand, this demand has been excessive. weakness of domestic consumption and public consumption, I think that the Chinese government has the money to do these things now, the money should be spent to address this inequality, especially in rural areas, it should be in the medical and education, more money, especially in older persons. It is my understanding. I am not an expert, but based on my hear, see, China's public health services and public education services is rapidly deteriorating , a problem, especially in poor areas, poor regions and provinces because there is no money to do these things. This is the leading source of regional inequality. It is extremely harmful to China's stability, but also unfair.
on the economy the fruits of growth, community should be better shared. you should see, in this context, to some extent, the domestic economy and exchange rate policy is directly related to better balance, they are not isolated problems. through the exchange rate revaluation , lower export growth, promote domestic spending, so in terms of external or internal, can achieve a better balance.
fact, this strategy means that a strategic shift, involving not only the exchange rate policies. exchange rate is a help achieve this shift, it will also help improve foreign relations. But I think, for China, a serious goal should be, do not have current account surpluses, it has no reason to this surplus. The Chinese government's goal of a serious should be, the use of resources caused by growth, so that more directly benefit the Chinese people. Currently in China, its population is 7-8 million people a reasonable sharing of the benefits of its rapid growth, there is this concern is reasonable.
Zhang: I still want to go back just now you said that appreciation of the RMB. Now it seems not fast. If so, according to the present rate it would take to complete this process will probably take 10 years? < br> Ma: First of all, I do not know the schedule; Secondly, I do not know that the Chinese decision-making itself clear. However, if the measures have been taken from their point of view, there will be such an impression: that is, they want to about appreciation rate of 3% per year. If this is the case, the whole process would take 10 years is. wait till then, in order to continue the process, they have to start over.
Zhang: faction advocates the appreciation of RMB point of view, China should take advantage of current favorable macroeconomic environment is stable, accelerated rate of appreciation. China may really miss? with the Chinese leadership to deepen understanding of the global economy, increased confidence, the issue of whether to accept a faster yuan pace?
Ma: I know this view. Chinese economists, there are many arguments for this is clear. I think the real difficulty in mm this is just my feeling of an outsider, not based on firsthand knowledge. I The feeling is that the current collective leadership is the highest policy level, they will make major decisions that ...
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