China’s economy in the midst of great changes

It is a great honor to participate in the “Academic China 2022” international summit forum. Today, I would like to discuss with you the following question – the role of China’s economy in the great changes unseen in a century.

The world today is undergoing profound changes unseen in a century, and the fundamental changes in the big changes are the evolution of the global economic pattern. After all, the economy is the foundation of political, diplomatic, military and other activities. An important feature of economic changes unseen in a century is that the deepening economic globalization in the past 70 years has reversed the trend. The most prominent feature is that the United States, as the leader of economic globalization after World War II, turned to trade protectionism. After taking office, former US President Trump initiated trade frictions and frequently withdrew from multilateral trade treaties, obstructing the normal operation of the WTO litigation mechanism. Since the Biden administration took office, although it has tried to rebuild the global leadership of the United States, it has basically continued the Trump-era “America First” stance on the issue of economic globalization, emphasizing improving domestic industrial competitiveness and ensuring supply chain security. In stark contrast to the United States, China has become a staunch supporter of economic globalization. General Secretary Xi Jinping has repeatedly stated China’s firm stance on defending economic globalization at many important international occasions such as the Davos Forum, the G20 Summit, the Asia-Pacific Economic Cooperation (APEC) Summit, and the United Nations General Assembly. A series of practical actions, such as the entry threshold for foreign investment, the holding of the China International Import Expo, and the participation in the Regional Comprehensive Economic Partnership (RCEP), have fulfilled their commitments, actively expanded opening up, and led the establishment of AIIB and the BRICS New Development Bank. Numerous new international organizations within the This raises a question, what role will China play in the context of the world’s major changes unseen in a century and the reversal of economic globalization? To this end, we first do a little simple analysis.

First, it should be recognized that China’s economic development is a miracle in human economic history. In the past ten years, my team and I have reviewed the central and local historical documents and calculated the total economic activities of the Northern Song, Ming and Qing dynasties based on the original data. We found that the Chinese economy started from the Northern Song Dynasty, and its proportion in the global economy has gradually increased. It reached its peak in the late Ming Dynasty in 1600, accounting for 34.6% of global GDP, and has gradually declined since then. When the second industrial revolution in Western countries was in full swing, China’s share of the total global economic activity fell off a cliff. Before the reform and opening up, it accounted for 4.9% of the global total in terms of purchasing power parity; after the reform and opening up, China took the express train of economic globalization. Through internal reform and opening up, China’s GDP growth far exceeded the global average speed, and now accounts for the global The proportion of GDP rose to about 20%. Therefore, the economic rise of China we are witnessing today is the first in more than 400 years. Comparing the 40 years of rapid economic growth in the history of the United Kingdom, the United States, Germany, Japan and other countries, it can be seen from the increase in the proportion of the world economy that China has contributed the largest economic growth in human history during the more than 40 years of reform and opening up. A growth that continues today.

Second, reviewing the course of economic globalization in history, it is found that there are several basic laws. The China Institute of Economic Thought and Practice of Tsinghua University has launched a research project on this subject. We found that globalization is essentially a process of transitioning the world economy from a closed equilibrium to an open equilibrium. This process is neither generated spontaneously nor driven by a single hegemonic power, but is an interactive game among many participants. result. In order to move the world economy from a closed equilibrium to an open equilibrium, a country with global leadership is needed to promote its realization, and a global leader must possess three conditions, namely, technological advantages, market advantages, and redistributive institutional advantages. Technological advantage refers to the leader’s technological leadership in the world’s advanced industries, so that he can obtain excess monopoly income through economic globalization. It is large enough to attract other countries to follow and open up by actively opening up to the outside world; the advantage of the redistribution system means that the government can effectively balance the domestic distribution of benefits brought about by economic globalization, thus forming the country’s overall political support for the process of economic globalization and ensuring leadership can continue to lead economic globalization.

Looking back at several rounds of globalization in history, including the economic globalization led by the United Kingdom in the mid-19th century and the economic globalization led by the United States in the 20th century, all confirm these three basic conditions. After the Industrial Revolution, Britain has occupied technical advantages in key fields such as the textile industry and iron and steel industry; the colonies all over the world have formed a unified large market, with market advantages; at the same time, the United Kingdom has also established a relatively complete social security system, with Redistribution of institutional advantages. Our research found that for a long time after World War II, the U.S. economy also possessed the technological advantages, market advantages and redistributive institutional advantages of being a global leader. Today, however, the three basic conditions that underpin the United States as a leader in economic globalization are gradually being lost. Against the background of the rise of emerging markets represented by China, the relative size of the US domestic unified market is gradually shrinking; the technological advantages and relative competitiveness of many US industries, especially the real economy, are also declining; at the same time, US political Polarization and social tearing have also led to a decline in the redistributive capacity of their socioeconomic systems.

Third, China is becoming the leader of the new economic globalization. Since the 18th National Congress of the Communist Party of China, Chinese leaders have repeatedly stated China’s firm position in defending economic globalization on different international occasions, proposing to “promote the building of a community with a shared future for mankind” and “enhance the fairness, effectiveness and inclusiveness of global development”. China’s economy is gradually fulfilling the three basic conditions for becoming a leader in economic globalization.

First of all, China’s large unified market is being formed and perfected, and the output and consumption of many major products in China have already ranked first in the world. Secondly, China has developed rapidly in the high-tech field, and has achieved leading advantages in sub-sectors such as big data, artificial intelligence, biotechnology and green energy. At the same time, China’s education system has trained a large number of engineering and technical personnel, accumulating accumulated resources for leading economic globalization. a certain degree of technical advantage. Finally, China has a strong domestic redistribution capacity. In the process of China’s participation in economic globalization, many regions and industries have been greatly impacted. Through the joint efforts of the government, enterprises and workers, China’s economy has successfully responded to the opening-up belt In the face of many challenges, the income distribution system has been continuously improved, and it initially has the advantages of a redistribution system that is a leader in economic globalization. Of course, we must see that, in addition to the above three conditions, since entering the new era, China has also proposed a series of international development initiatives or concepts, including the “Belt and Road”, the “Dual Carbon” goal, and the “Community with a Shared Future for Mankind”, which have attracted worldwide attention. , is being gradually accepted by various countries. There is reason to believe that China is becoming the leader of the new economic globalization.

So, in what areas does China need to make continuous efforts to truly become a leader in the new economic globalization? In essence, in order to further unleash the huge potential of China to lead the new economic globalization, China still needs to continue its efforts, and gradually learn and adapt to its role as a leader of economic globalization on the premise of comprehensively deepening reforms and continuously consolidating the foundation. Mainly in the following aspects.

First, compared with major developed countries, China’s independent innovation capability is relatively weak, and many technologies are still “stuck” in industries with long innovation chains and in the field of basic science. Therefore, we should adhere to the core position of scientific and technological innovation in the overall situation of China’s modernization drive, increase investment in research and development and personnel training in key areas, and continuously improve my country’s independent innovation level through the reform of the scientific research system internally and through strengthening international exchanges and cooperation externally.

Second, China’s domestic market demand still needs to be further released. At present, there are still barriers that restrict the free flow of factors in China, hindering the formation of a unified large market and the full release of domestic demand. Therefore, we should speed up the construction of a new development pattern, continue to expand the scale of the middle-income group, and continuously release the potential of my country’s domestic consumer market.

Third, China’s redistribution system still contains huge reform dividends. It is necessary to accelerate the realization of the goal of common prosperity, comprehensively deepen the reform of the redistribution system, give full play to the important advantages of the socialist system with Chinese characteristics, and allow all Chinese people to benefit from development. Benefit from each other and form a strong social consensus to support economic globalization.

Fourth, China’s soft power in internationalization still needs to be improved. China’s participation in global governance is relatively short, and emerging international organizations such as the AIIB and the BRICS New Development Bank are also in their infancy. Therefore, China still needs to continue to accumulate experience in participating in global economic governance, explore ways and paths for negotiation and negotiation with other countries, and cultivate a group of talents with international communication skills and work experience in international organizations.

Finally, in line with today’s theme, China’s social science research, especially research related to economics, needs to be further internationalized, and it is necessary to stand on the commanding heights of the new economic globalization to seriously study and respond to major international economic development. question. The current main discipline system of economics is still formed during the last round of economic globalization, or established by Western scholars. In this regard, the Chinese social science community must work hard, hold a humble and open mind, and exchange research with international counterparts, so as to promote the process of new economic globalization led by China.

Source: “Chinese Journal of Social Sciences”

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