Lin Yifu: "Singing Down on China" Will Bankrupt Again
According to the predictions of the World Bank and the International Monetary Fund, the US economic growth rate is expected to be 1.1% in 2023 and 0.8% in 2024; The situation in Europe is generally similar.
In the context of weak global economic recovery and complex external environment, China achieved an economic growth rate of 5.5% in the first half of 2023, which is significantly faster than that of major developed economies in the world.
In the face of the current economic situation, Lin Yifu, Dean of the School of New Structural Economics at Peking University and former Chief Economist of the World Bank, told Chao News reporters at the 2023 Hong Kong International Charity Forum that there is reason to maintain optimism and confidence in the Chinese economy. Before 2035, China should still have an annual economic growth potential of 8%.
The source of economic growth is the continuous improvement of productivity, which requires technological innovation and industrial upgrading. Lin Yifu believes that developed countries are at the forefront of technology and industry, and if they want to drive economic development by improving productivity, the investment is very high, the risk is very high, and the probability of success is very low; Developing countries can introduce, digest, and absorb advanced technologies from developed countries as a source of further innovation, with relatively low risks and costs. Compared to developed countries, China has the advantage of being a latecomer.
He provided a set of data: in 2019, China's per capita GDP was 22.6% of that of the United States, which is the gap between Germany and the United States in 1946, Japan and the United States in 1956, and South Korea and the United States in 1985. During the 16 years from 1946 to 1962, Germany's average annual per capita GDP growth was 8.6%; During the six-year period from 1956 to 1972, Japan's average annual growth was 8.6%, while South Korea's average annual growth from 1985 to 2001 was 8.1%.
By comparing different economies in different historical periods and utilizing the advantages of latecomers to achieve economic growth, Lin Yifu believes that by 2035, China can still promote further economic growth by introducing, digesting, and absorbing advanced technology and high-end industries for further innovation, utilizing the advantages of latecomers.
Lin Yifu participated in the 2023 Hong Kong International Charity Forum. Photo by Chao News reporter Gao Yaya
"Unlike Germany, Japan, and South Korea, China also has an advantage of 'overtaking by changing lanes'. It seizes the advantage of being on the same starting line as developed countries in the new economy field, leverages the characteristics of short research and development cycles and relatively low investment in the new economy, and leverages its advantages of a large population, a vast market, and complete supporting facilities to further develop." Lin Yifu said.
While possessing the potential for economic growth, we must also recognize the constraints of reality. Lin Yifu emphasized that although the potential is high, it may not necessarily be fully utilized. China's economic development also needs to consider technological updates to address global warming, technological bottlenecks, and the impact of domestic regional and urban-rural disparities.
"Taking all those factors into consideration, I believe that with an 8% growth potential, an annual growth rate of 5-6% can be achieved before 2035." Lin Yifu said, "Looking back over the past 40 years, China's rapid economic development has been a miracle of the world, but every time the growth rate slows down, there are voices from outside that criticize China. However, the Chinese economy has never collapsed, and it is stable and growing rapidly. Facts speak louder than words, and the 'criticize China theory' has gone bankrupt multiple times in the past, and this time is no exception."
