Chinese-US Economies in Comparison and Interaction: Now and Future as China Economist Surveys

Transcription

1 Chinese-US Economies in Comparison and Interaction: Now and Future as China Economist Surveys

2 Key outcome of the 19 th CPC National Congress: Chinese society's principal contradiction has changed 40 yeas ago: the ever-growing material and cultural needs of the people VS the low level of social production Today : the people's ever-growing need for a better life VS unbalanced and inadequate development better life no absolute poverty Green growth unbalanced and inadequate development Industry upgrade Xi Jinping at the 19 th CPC National Congress: the principal contradiction now facing Chinese society is between unbalanced and inadequate development and the people's ever-growing needs for a better life 2

3 HCRAI explains China s growth story : (Human Capital Relatively Advanced Investment ) China India per capita GDP CHINA INDIA 0 Both countries have made great achievements during in economy and social development. Both countries invest persistently in human capital, both care about social fairness and human development level.

4 HDI Comparison of Sub-indexes EIc EIi LIc LIi China caught up with India in terms of education index in 1950s and the gap tends to widen. China s longevity index surpassed India s since 1960s. 1 IIc IIi China s per capita GDP surpassed India s until 1992, and gradually widened after

5 Contents Perception of China - US Competitiveness Perception of Economic Development Gaps between China and the US Assessment of the Future Economic Development Tendency of China and the US Recommendations on Future Development of the World 5

6 The Survey about China-US Economic Futures enterprise enterprise s and governme s and governme nt agencies nt agencies 17% research 17% research institutes institutes 14% 14% To learn about how economists perceive the industrial competitiveness of China and the US, we conducted a survey by distributing questionnaires to the addresses on China Economist's contact list and China Economist WeChat public platform from May 9 to May 18, universitie universitie s 69% s 69% western western region region 10% 10% central central region region 18% 18% overseas overseas 2% 2% China's China's eastern eastern region region 70% 70% In this survey, we collected 131 valid questionnaires from universities (69.2%),research institutes (14%) and enterprises and government agencies (16.8%). According to the 127 valid questionnaires in which respondents indicated their regions, economists participating in this survey are from China's eastern region (70.1%), central region (18.1%), western region(10.2%) and overseas (1.6%). 6

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8 Chinese and US Competitiveness Is Fueled by Different Drivers The US leads China in terms of talent, creativity, social system, industrial system integrity and financing availability. China leads the US in terms of infrastructure, cost competitiveness and government driving force, which is reflected in China's unique industrial competitiveness under the leadership of a strong government US is fuelled by talent, creativity and financing availability. Chinese is fuelled by government driving force, infrastructure and cost competitiveness 8

9 Technical Capacity and Cost Are Respectively the Biggest Barriers to Competitiveness Improvement for China and the US In our survey, economists believed that rising cost (49.6%) and export restrictions (20%) are important barriers to the improvement of industrial competitiveness for the US, whereas inadequate technology (44%), the lack of brand influence (23.2%), surging cost pressures (16%), insufficient national image and cultural influence (12.8%) are the key barriers to the improvement o f industrial competitiveness for China. 9

10 Contents Perception of Competitiveness of China Us Perception of Economic Development Gaps between China -US Assessment of the Future Economic Development Tendency of China and the US Recommendations on Future Development of the World 10

11 Economists Believed that China's Economy will Grow at 5.2% and the US 2.4% in the Coming Two Decades Economists forecast that the average growth rate of China's economy in the coming two decades will be 5.2% Economists forecast that the average growth rate of the US economy in the coming two decades will be 2.4% 11

12 Economic climate index from previous surveys conducted by China Economist Chinese economists are optimistic about the current development of China's economy. 12

13 China will Catch up with the US in GDP by around 2034 and in per capita GDP by 2077 at the earliest Based on the economic aggregate of China and the US in 2016 and the survey data in Figure 5 above, the result of calculation also indicates that China's economic aggregate will equal the US level during It will take over 60 years for China to catch up with the US in per capita GDP. 13

14 Economists Believed that China's Manufacturing Technology Will Equal the US Level by around 2045 Economists believed that China's manufacturing technology will equal the US level by around In other words, upon the centennial of the founding of the People's Republic of China, China's real economy will stand at the forefront of the world. 14

15 Economists Believed that the USD/RMB Exchange Rate Will Reach 5.4 or so 20 Years from 6.7 Now With respect to the USD/RMB exchange rate 20 years from now, 40% of respondents believed that it will reach 1:5-7; 36% of respondents believed that it will reach 1:3-5; 20.8% of respondents believed that it will exceed 1:7; and 3.2% of respondents believed that it will stay below 1:3. In summary, the economists forecasted that the mean value of the USD/RMB exchange rate 20 years from now will be about 1:

16 Contents Perception of Competitiveness of China Us Perception of Economic Development Gaps between China -US Assessment of the Future Economic Development Tendency of China and the US Recommendations on Future Development of the World 16

17 Over 61% Economists Believed that a China-US Trade War Is Unlikely With respect to whether a serious trade war is likely to break out between China and the US in the coming three years, 61.6% of respondents believed that it is unlikely; 16.8% of respondents believed that it is highly likely; and 21.6% of respondents expressed uncertainty. 17

18 Over 67% of Economists Believed that China- US Trade Enjoys Great Potential With respect to assessment of the growth potential of China- US trade, 67.2% of respondents believed that China and the US are highly complementary in economic development with great growth potential of two-way trade; 27.2% of respondents considered that the complementarity between China and the US in economic development is diminishing and the growth potential of trade is insufficient; and 5.6% of respondents expressed uncertainty. We believe that the confidence of economists on the stability and potential of China-US trade relations derived from an understanding on the complementarity of economic development of the world. 18

19 Economists Believed that China's Debt Is More Sustainable With respect to China's and US's debt sustainability, 35.2% of respondents believed that China's debt is more sustainable; 29.6% of respondents believed that US's debt is more sustainable; and 35.2% of respondents expressed uncertainty. Hence, economists are more confident in China's debt sustainability in comparison with the US (faster GDP growth and essentially domestic liabilities). 19

20 More Than 81% Economists Believed that China and the US will Cooperate and Compete with Each Other With respect to assessment of China-US mainstream economic relations 20 years from now, 81.6% of respondents believed that the two countries will create a mutually beneficial relationship where competition and cooperation coexist; 11.2% o f respondents believed that China and the US will become strategic partners; 4.8% of respondents considered that a conflict between China and the US is inevitable in the short run.

21 Contents Perception of Competitiveness of China Us Perception of Economic Development Gaps between China -US Assessment of the Future Economic Development Tendency of China and the US Recommendations on Future Development of the World 21

22 Key outcome of the 19 th CPC National Congress: Chinese society's principal contradiction has changed 40 yeas ago: the ever-growing material and cultural needs of the people VS the low level of social production Today : the people's ever-growing need for a better life VS unbalanced and inadequate development better life no absolute poverty Green growth unbalanced and inadequate development Industry upgrade Xi Jinping at the 19 th CPC National Congress: the principal contradiction now facing Chinese society is between unbalanced and inadequate development and the people's ever-growing needs for a better life 22

23 1. Mutual Trust With respect to the scoring of economic policy within the first 100 days of Trump's presidency (full score is 5 points), 91.2% of respondents gave a rating above the passable level, among whom 5.6% gave a full score, while only 8.8% of respondents gave a failure rating. Converted into centesimal system, the overall rating of Trump's "first 100 days" in office by economists is about 76.32, which is generally above the global rating on Trump's presidency. It seems that Trump has more fans in China. What do Europeans and Americans think about China? Chinese believe that different countries have different ways to the future. IF we believe there is only one way to the future, it will be difficult to have policy coherence. Confucius(BC551~BC479) : with good will we can have Harmony without sameness (but we are all wearing the same suits!) 23

24 2. Make Full Use of Each Country s Advantages China is facing diminishing low cost competitive advantage, and will pursue green development. Europe and US will benefit from China s green growth. 24

25 3. Domestic Dynamics the Most Important Growth Factor With respect to assessment of what kind of industrial policy China will adopt, 60% of respondents believed that China should focus on expanding the market share o f premium domestic products; 24.8% of respondents believed that China should continue to expand its international market share; and 11.2% of respondents expressed uncertainty The Domestic Market will Be Vital to China's Industrial Development. There are still 30 million poor people in China living on less than one dollar a day. By 2020, there will be no absolute poverty in China, which will be a great achievement. 25

26 Looking forward Xi Jinping meets Trump China s wisdom to benefit the world US First the Belt and Road initiative Opening to the world One wall between US and Mexico made only in America Carry out the Paris Climate Agreement withdraw from the Paris Climate Agreement It is lucky that the world is a multipolar world today! 26

27 The world will be a better place if each country succeeds in its own endeavors.