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Can China Smoothly and Successfully Shift to a Sustainable Growth Model Andong Zhu Tsinghua University.

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Presentation on theme: "Can China Smoothly and Successfully Shift to a Sustainable Growth Model Andong Zhu Tsinghua University."— Presentation transcript:

1 Can China Smoothly and Successfully Shift to a Sustainable Growth Model Andong Zhu Tsinghua University

2 Outline Introduction The Growth Models in the past 30 yeas Opportunities and Challenges to New and Sustainable Model Conclusion

3 Introduction: From Old China to New China Semi-Feudal Semi-Colonial Backward Independent Economic & Social Construction Balanced Market-Oriented GDP Growth Fast Income Inequality Social Development Environment Sustainable (Economic, Social, Environment) Development or 2009?

4 A Family in the Old China

5 1948: Hyper-inflation in China

6 The Achievements of New China before 1978 Preliminarily Industrialized the Economy Established a Independent and Comprehensive Industrial system GDP Growth Rate Averaged at 6.68% per year during Life Expectancy increased from around 35 to about 67 years.

7 The Growth Models of New China 2.0 Achievements Evolvement of the Growth Models Problems

8 Fast GDP Growth

9 Huge Amount of Foreign Reserves

10 Evolvement of the Growth Models Planned Economy With Market Mechanism Balanced/Inward Looking Growth Marketization; Privatization Liberalization Over-dependent On International Market And Investment Sustainable (Economic, Social, Environment) Development Relatively Balanced/Outward Looking Growth Imbalanced/outward Looking New growth model?

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13 The Over-dependency on Investment

14 The Consumption Ratio in China

15 Sweden 25, India 32.5, United States 40.8, China 44.7, Brazil 59.1 Widening Income Inequality

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17 What are the Major Reasons of Inequality in China Monopoly? Corruption? Privatization? Ownership Income distribution Ownership Labor Relation Income distribution

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19 The Laid-off/privatization Movement(Mn) Urban employment State-owned Units Collective- owned Units highest level27331(2005)11261(1995)3628(1991) lowest level19040(1995)6488(2005)810(2005) change

20 Informalizing Labor Market

21 What New Growth model Needed in the Chinese Economy? Balanced/sustainable Economic development Less depend on international Market Less depend on Investment Increasing Private Consumption increasing income of the poor & improving the Social Security Net (re-)nationalization of enterprises; more strictly regulate the market

22 Opportunities and Challenges to New Model Opportunities The Drain Up of the Rural Labor Reserves The Current Crisis (International Market; US Model; Theory, etc) Challenges

23 Low External Debt Risk

24 Enough Room for Fiscal and Monetary Policies At the end of 2007 total public debt was RMB3.4 Tr. as 13.8% of GDP and 67.0% of government revenue

25 The Composition of the 4 Tr. RMB Stimulus Plan

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27 Conclusion The growth pattern of China has to be changed even without this current Crisis It will not be Easy to transform China to a really Sustainable Development Model Smoothly and Successfully

28 Comments and Questions Welcome! Thank You!


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