At least one thousand self damages and one thousand enemies are killed. Interview with Lin Yifu: "Decoupling and Breaking Chains" and "Removing Risks" Countries | Development | Risks
2023 marks the 10th anniversary of the the Belt and Road Initiative. Over the past 10 years, the "the Belt and Road" initiative has become an important practice platform to promote the construction of a community with a shared future for mankind, from concept to action, from vision to reality.
The fifth meeting of the Advisory Committee of the the Belt and Road Forum for International Cooperation was held recently. Lin Yifu, member of the Advisory Committee of the "the Belt and Road" International Cooperation Summit Forum, former Vice President of the World Bank, and Honorary President of the National Development Institute of Peking University, received an exclusive interview with reporters from China News Agency on the 12th, and gave authoritative interpretations on hot topics such as the "the Belt and Road" initiative, the current economic prospects of China and the world economic situation.
China news agency Lin Yifu: The "the Belt and Road" initiative is an international development initiative that emphasizes policy communication, facility connectivity, smooth trade, financial integration and people to people connectivity. Over the past 10 years, the joint construction of the "the Belt and Road" has done more than 3000 projects, which has led to nearly $1 trillion of investment, with very significant results.
These investments promote the development of countries along the "the Belt and Road", solve their development bottlenecks, and bring about an increase in local development performance. Therefore, countries along the "the Belt and Road" project are very popular. For example, during the pre opening debugging of the Jakarta Bandung high-speed railway in Indonesia, local people took photos and experienced it with their phones. In Laos, the China Laos Railway has also become a business card. In Africa, locals believe that the Mombasa Nairobi Railway is a project that changes their development process. These achievements are evident to all, truly achieving results of consultation, co construction, and sharing, reflecting the concept of building a community with a shared future for mankind.
Lin Yifu from China News Agency: Indeed, this method of smearing is common abroad, but it cannot withstand careful analysis.
Firstly, in the debt of developing countries, China accounts for less than 10% overall. Its main debt comes from commercial banks in developed countries, accounting for over 40%, while the debt of multilateral international development institutions accounts for about 25%. And China is less than 10%, with a very small proportion.
Secondly, the debt related to China is used for construction, which can eliminate bottlenecks in their growth and development, and is quite different in nature from the past debt of developing countries. Because in the past, most of the debt of developing countries did not increase their own growth capacity, while China actually eliminated the bottleneck of growth for developing countries and provided them with conditions for growth. For example, there is a saying in China that "build roads before you get rich", which is reflected in many infrastructure construction projects of the "the Belt and Road" project.
I believe that facts speak louder than words when it comes to intentional or unintentional smearing. For example, at the beginning of the Ya'an Wanzhou High speed Railway Project, local media and public opinion also had some doubts, but when the project was completed, they realized that the construction of the "the Belt and Road" would bring benefits to them, and it would continue to emerge over time. So negative voices will eventually fade away in the face of facts.
Lin Yifu from China News Agency: We must still adhere to the principles of consultation, co construction, and sharing. The project should focus on the pain points and difficulties of the countries along the "the Belt and Road", and through the joint construction of the "the Belt and Road", it can bring tangible benefits to the region. At present, the joint construction of the "the Belt and Road" has achieved some achievements in infrastructure construction. The next step is to help countries along the Belt and Road develop production, especially to find out which projects can help them create jobs, create exports, stimulate growth and increase taxes. To enable these construction projects not only to become projects that can lay golden eggs, but also to help solve their past problems. In this way, with the advancement of the project, the "the Belt and Road" construction can achieve the goal of jointly building a community with a shared future for mankind.
Lin Yifu from China News Agency: China is a large economy, and a large economy must be dominated by the domestic circulation. Due to the current uncertainties in the world, China can maintain stable development by leveraging the advantages of a large economy. Moreover, China's open development emphasizes domestic and international dual circulation, which can bring more opportunities to other countries through China's development. Therefore, China's construction of a new development pattern will also provide a stable anchor for the construction of the "the Belt and Road" in the current uncertain international environment.
Lin Yifu from China News Agency: What is the essence of growth? It is the continuous development of the economy and the continuous improvement of income levels. What are the prerequisites for implementation? It is the continuous innovation of technology and the upgrading of industries.
I said that it is entirely possible for China to achieve an average annual real growth rate of 5% -6% before 2035, mainly because China is still a developing economy. Developing economies have latecomer advantages in technological innovation and industrial upgrading, and can use introduction, digestion, absorption, and re innovation as sources of technological innovation. However, the industrial technology of developed and high-income countries is already at the forefront of the world. To achieve technological innovation and industrial upgrading, one can only rely on self invention, which requires a large investment and high risk.
Based on over 100 years of experience, the average per capita economic growth in developed and technologically advanced countries is about 2% per year, with population growth ranging from fast to slow, at around 3%. But if we take advantage of the latecomer advantage of the industrial technology gap with developed countries, at our current stage of development, such as 2019, China's per capita GDP, calculated at purchasing power parity, is 22.6% of that of the United States, which is equivalent to the level of gap between Germany in 1946, Japan in 1956, and South Korea with the United States in 1985. When these three countries were in the same catching up stage as China, they achieved an average annual per capita GDP growth of over 8% in 2016. They can achieve this, which means that China also has the potential to utilize the advantages of latecomers.
If compared to Germany, Japan, and South Korea back then, China still has an advantage in the new economy. The new economy, such as the Internet, big data and artificial intelligence, is new to China and new to developed countries. China is on the same starting line with developed countries. The new economy and new technologies have a particularly short research and development cycle, with investment mainly focused on human capital. China is a country with abundant human capital and has advantages in this regard. At the same time, China also has the best industrial supporting facilities in the world, with a huge domestic market that Germany, Japan, and South Korea do not have, which is also an advantage.
So, when we add up the advantages of latecomers and the advantages of the new economy, I believe that China has the potential for 8% growth by 2035. Of course, potential is just a possibility. In terms of introducing, digesting, and absorbing technology, we are currently facing some bottleneck problems. However, overall, there are not many technologies that will be bottleneck, and we can use the national advantages to overcome them. Taking these factors into consideration, I believe that a growth rate of 5% -6% is entirely possible.
Lin Yifu from China News Agency: There is an international consensus on the evaluation criteria for developing countries, including indicators from the United Nations and the World Bank. It does not mean that any country can change them through a single "bill".
Lin Yifu from China News Agency: Trade is a win-win situation. "Decoupling and breaking the chain" and "removing risks" are aimed at preventing some high-tech products from exporting to China, creating obstacles for China's development. The main reason is that some countries still want to maintain their hegemonic position in the international community.
But these high-tech products are not pie falling from the sky, but rather owned by enterprises in developed countries. These technologies rely heavily on research and development investment, and the amount of profit they can generate after acquisition depends on the size of the market. Calculated at purchasing power parity, China is the world's largest economy, and at market exchange rates, it is the second largest economy. For high-tech products, China is often the world's largest market, accounting for 20%, 30%, or even more. So from the perspective of enterprises, when breakthroughs are made in technology research and development, having a Chinese market is high profitability, and not having a Chinese market is low profitability, or even no profitability.
The impact of "decoupling and breaking the chain" and "de risk" is not only temporary low profitability and non profitability, but also related to whether the enterprise can maintain its technological leadership position. Because these high-tech products require continuous research and development investment to maintain their leadership, enterprises can continue to invest in research and development when they are highly profitable, maintain technological leadership, and lose their ability to invest in research and development when they are low profit or not profitable.
So to "get stuck in China's neck", for these enterprises, it's not like we usually say "killing one thousand enemies and self harming eight hundred", it may be "killing one thousand enemies and self harming at least one thousand". To "block the Chinese neck" is also to "block their own neck". Therefore, technological decoupling actually involves the government treating customers and businesses paying the bill. If the government wants to achieve its political goals, it requires businesses to pay the bill. Developed countries rely on these enterprises to maintain their leading position in the world, create employment, and sustain growth. So decoupling from China and removing risks actually increases one's own risk.
The advocates of these policies may be some populists, as well as some politicians who are trying to win votes. But true intellectuals see this issue very clearly. That's also why the US Treasury Secretary came to China to say that the US is not seeking to "decouple" from the Chinese economy, while the German Chancellor and French President came to China with representatives of large enterprises... because trade win-win and trade cooperation are the best ways to maintain world stability and development.
The original Interview with Lin Yifu: The the Belt and Road Initiative provides a "stable anchor" for the world
