China's Economic Growth in the Next Decade with the Chinese University of Hong Kong's

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China's Economic Growth in the Next Decade with the Chinese University of Hong Kong's China's Economic Growth in the Next Decade with The Chinese University of Hong Kong's Lawrence Lau Wed, 1/27 11:39AM • 1:06:59 SUMMARY KEYWORDS china, GDP, chinese, question, people, enterprises, world, country, japan, debt, currency, economic globalization, government, decoupling, problem, continue, accounted, economy, growth, per capita GDP SPEAKERS Lawrence Lau, Zhiguo He This is a transcript of the first one of the series of webinars, titled “China in Today’s World”, hosted by Professor Zhiguo HE of the University of Chicago Booth School of Business, on behalf of the Becker- Friendman Institute (BFI)-China. The guest in this webinar was Professor Lawrence J. LAU of the Chinese University of Hong Kong and Stanford University. Lawrence Lau 00:03 It is my honor and a pleasure to be here today. And the topic I'm going to speak on is China's economic growth in the next decade. And I will post this PowerPoint on my webpage in a couple of days, so you can feel free to download. One of the things that I want to point out is that China is today the second largest economy in the world, with over 16% of world GDP. The U.S. GDP is about 24% of world GDP. China is also the second largest trading nation in 2019, accounting for 10.7% of our total world trade, with the U.S. accounting for 11.3% of total world trade. So you know, they are number one and number two. China is the fastest growing major economy in the world over the past 40 years, averaging around 9% per year. But Chinese per capita GDP is still very low. It is about $10,000, slightly above $10,000 U.S. dollars. And this is actually only less than one sixth of the U.S. per capita GDP. I want to show you these slides on the economic fundamentals of China going forward. - 1 - Transcribed by https://otter.ai GDP. 7% above a 10%. of think it's thanI bit little less Okay, now it's the part. is green chart the in see you what sector, agricultural the GDPfrom originating is that the One make to here. points really two are Okay, there and labor. has do to with part The other available. be will capital the fundamentals, one of the that's part So savings. national exceed investment will U.S. the where situation, from very different it is So for savings. demand of, say, terms sufficient in self- actually is thing is China that other The [INAUDIBLE] problem. a is not that So capital we expect forward. going for investment available of savings be lots there will twothings. that One is is this says And thanwhat investment. higher savings is slightly and 40%. Okay, around are They both high. very by Transcribed that see they're can rate. And you investment national the blue is rate. line And the savings the national savings, the household not rate, national savings rate, the savings is theredthe you in What see line Percent 10 15 20 25 30 35 40 45 50 55 1952 1953 1954 1955 1956 1957 1958 1959 1960 Chinese PercentSavingsa DomesticInvestment Gross of NationalGDP and as 1952 since 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 Rate Savings 1973 1974 1975 1976 1977 1978 1979 1980 1981 - 1982 Investment Rate Investment 2 2 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 2009 https://otter.ai 2010 2011 2012 2013 2014 2015 2016 2017 2018 tooAnd soon. 60 is way now the'50s. And in adopted was probably that isdefinition, an this old Now, to 16 60. is defined as age actually working Chinese the that toalso I emphasize Butwant addition, in two. or next decade foreseeable the in supply, certainly, of shortage labor by Transcribed there Sois no theservice to sector. and the sector, industrial to sector fromagricultural the transferred that be can surplus labor, there us that is still tells That that tell us? what does Okay, employment. force or the labor of about 25% still takes in slide, next actually the see, you sector, But agricultural the 100% 100% 30% 40% 50% 60% 70% 80% 90% 10% 20% 10% 20% 30% 40% 50% 60% 70% 80% 90% 0% 0% 1952 1952 1953 1953 1954 1954 1955 1955 1956 1956 1957 1957 1958 1958 1959 Sector Primary 1959 1960 1960 Primary Sector 1961 1961 The Distribution of Chinese GDP by Originating Sector Since 1952 1962 1962 1963 1963 1964 1964 1965 1965 1966 1966 1967 1967 1968 of EmploymentThe Sectorby Distribution 1952 since 1968 1969 1969 1970 1970 1971 1971 1972 1972 1973 1973 1974 1974 1975 1975 1976 1976 1977 1977 Secondary Sector Secondary 1978 1978 1979 Secondary Sector 1979 1980 1980 1981 1981 1982 - 1982 1983 3 3 1983 1984 - 1984 1985 1985 1986 1986 1987 1987 1988 1988 1989 1989 1990 1990 1991 1991 1992 1992 1993 1993 1994 1994 1995 1995 1996 1996 1997 1998 1997 Sector Tertiary 1998 1999 Tertiary Tertiary Sector 1999 2000 2000 2001 2001 2002 2002 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 https://otter.ai 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 2017 2017 2018 2018 2019 2019 all China has to do is to lengthen the retirement age, by five years, perhaps even 10 years. Gradually, they would also provide another source of labor. So neither capital, nor labor is a problem. Neither is a constraint to further growth. I want to also show you that China has been growing really very fast. What you see in the graph, the blue line up there is the U.S. GDP, the red line is the Chinese GDP. U.S. GDP is still higher by about one third of the Chinese GDP. But the growth rate, the growth rate on the columns - the red columns and the blue columns, you can see that the growth rates have been much higher in China than in the US, okay, even though the Chinese growth rate has been coming down. It is still around 6%. Now, the other thing to notice is that Chinese reliance on exports and imports have been coming down. The blue line is the ratio of Chinese exports to GDP. At the peak, it is almost 35%. I mean, it's very high. It's really come down now to just below 20% which means that the dependence is actually not that high. - 4 - Transcribed by https://otter.ai and that's really quite interesting is that China, the Chinese economy, the Chinese China, that interesting is that's really and quite to very vulnerable not actually is toI out, point other thing want The has declined. foreigninvestment direct on Okay, dependence the so almost 15%. actually high, was quite time, it one at 4%. Whereas 3 around or is now it that see can investment, you of a gross ratio domestic FDI, as direct investment, foreign percentage of is a this And okay. declining, also been investment has foreign direct on inbound dependence that Chinese shows it because next also interesting This chart is Percent 10 15 20 25 30 35 40 0 5 1960 1961 1962 1963 1964 ImportsChinese of Goods and Services aPercent as of GDP ExportsChinese Goods of andServices as ofGDPa Percent 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 - 1985 5 5 1986 - 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Transcribed by Transcribed 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 https://otter.ai 2011 2012 2013 2014 2015 2016 2017 2018 2019 fluctuations. huge you thing. Okay, have the same imports is And by Transcribed else. everyone just like and downs, ups the all see can you so 1997, 2008. And 2000, fluctuations: the can all you see So okay. else, everybody like exports fluctuate that Chinese can see You economies. Asian in selected of goods of of exports quarterly growth the rates now is is shown you I have what Now, disturbances. vulnerable external to It's not the world. rest the in of happens whatever Annualised Percent per annum -70 -60 -50 -40 -30 -20 -10 Annualised Percent per annum -50 -40 -30 -20 -10 10 20 30 40 50 60 70 80 10 20 30 40 50 60 70 0 0 Q1 1997 Q1 1997 Q3 1997 Q3 1997 Q1 1998 Q1 1998 Taiwan, China Mainland,China Singapore Malaysia Indonesia Hong Kong, China Taiwan, China Mainland,China Singapore Malaysia Indonesia Hong ChinaKong, Q3 1998 Q3 1998 Q1 1999 Q1 1999 Q3 1999 Q3 1999 Q1 2000 Q1 2000 Quarterly Rates of Rates Growth Goods:Quarterly East Exports Selected of Asian Economies Q3 2000 Rates GrowthQuarterly Imports of East Goods: of Selected of EconomiesAsian Q3 2000 Q1 2001 Q1 2001 Q3 2001 Q3 2001 Q1 2002 Q1 2002 Q3 2002 Q3 2002 Q1 2003 Q1 2003 Q3 2003 Q3 2003 Japan Thailand Philippines Korea India Japan Thailand Philippines Korea India Q1 2004 Q1 2004 Q3 2004 Q3 2004 Q1 2005 Q1 2005 Q3 2005 Q3 2005 Q1 2006 Q1 2006 Q3 2006 Q3 2006 Q1 2007 Q1 2007 - Q3 2007 Q3 2007 6 6 Q1 2008 Q1 2008 - Q3 2008 Q3 2008 Q1 2009 Q1 2009 Q3 2009 Q3 2009 Q1 2010 Q1 2010 Q3 2010 Q3 2010 Q1 2011 Q1 2011 Q3 2011 Q3 2011 Q1 2012 Q1 2012 Q3 2012 Q3 2012 Q1 2013 Q1 2013 Q3 2013 Q3 2013 Q1 2014 Q1 2014 Q3 2014 Q3 2014 Q1 2015 Q1 2015 Q3 2015 Q3 2015 Q1 2016 Q1 2016 Q3 2016 Q3 2016 Q1 2017 Q1 2017 https://otter.ai Q3 2017 Q3 2017 Q1 2018 Q1 2018 Q3 2018 Q3 2018 Q1 2019 Q1 2019 Q3 2019 Q3 2019 Q1 2020 Q1 2020 Q3 2020 down.
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