the world has not decoupled from china
2024-10-04
한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina
in recent years, foreign media have been hyping the theory of "decoupling and breaking links" with china. what i want to say is: the world has not decoupled from china. in fact, china's share of world trade has not only not declined in the past few years, but has actually there's still a big rise.
we always like to review "big but not strong". in fact, big itself is strong.
china's gdp accounts for about 17% of the world's total, and its trade volume accounts for more than 14%, while the united states only accounts for about 10%. global trade totals fell last year, and so did china's, but china's exports have picked up again this year. why are china’s exports still so popular? it's because we have a cost advantage.
china's cost advantage is the result of long-term development and mainly depends on the scale and integrity of our manufacturing industry.we always like to self-examine, saying that we are big but not strong, and that we are big but not strong. in fact, bigness itself is strong.because only when the scale is large enough, the system can be complete and the cost can be reduced. of course, technology is also very important in this accumulation process. for example, the reason why china’s logistics costs continue to decline is because ai technology continues to advance.
how big is the scale of china's manufacturing industry? if we look at it from the perspective of added value, china's manufacturing industry accounts for 30% of the world's, and our share has increased by 11 percentage points from 2010 to 2020, then who is declining? not the united states, but japan and european countries.
as long as there is no war, economic logic still comes first
some people often say that china now is equivalent to japan in the 1990s, because in the long run china is aging, and in the short run our demand is insufficient, similar to japan in the 1990s.but i think this metaphor is wrong. if you want to compare, it should be compared with japan in the late 1970s. this means that what japan has experienced before, china is experiencing again.although we often say that this is chinese characteristics, from the perspective of economic development, china is not special at all. it is basically repeating the path that japan took after the war. in the 1970s and 1980s, japan underwent a major transformation. on the one hand, demand shifted from abroad to domestic demand, and on the other hand, it shifted to an innovative economy. older people will probably remember that in the 1980s or even the first half of the 1990s, except for personal computers, almost all new products came from japan.
in fact, we are leading the world in many industries, not to mention electric vehicles and new energy products. even in the field of ai, china leads the world. what china lacks is the most high-end things, but from an application perspective, china is far ahead of the world.
we must have enough confidence in ourselves. the united states' dependence on china has not actually declined. on the surface, the direct trade volume between china and the united states has declined, but the u.s. trade deficit with china has not declined and still accounts for about 40%.although this world can create some international tensions, i believe that as long as there is no war, economic logic still comes first.
chinese companies’ overseas expansion brings a win-win situation
there is no doubt that going overseas has become a trend. back then, the united states and japan both recreated the united states and japan overseas.
in fact, chinese companies' overseas expansion brings a win-win situation.for example, between us and asean, we used to import raw materials from raw material producing countries, import some intermediate products from developed economies in asia, and then assemble them and sell them to europe and the united states. now that the industry is upgrading, many labor-intensive industries have moved to southeast asia. our export structure has also changed, and we have begun to export higher-end intermediate products. our complementary relationship with southeast asia is a win-win situation.
nowadays we always talk about "involution", but in fact china's "involution" is not special at all. japan had overcapacity in the late 1970s. why did japan aggressively expand overseas? it is because the domestic market capacity is small but investment is large, so we can only turn overseas.
but our support for innovation is not enough. we need to spend more money on venture capital and use the money through the venture capital window. this is a solution to the "involution".
china’s commitment to further expand institutional opening-up
the entire world is undergoing energy transformation. if developing countries want to develop, they cannot continue to follow the old path of fossil energy. relatively speaking, china has better production capacity and can help other countries, especially developing countries, carry out energy transformation and contribute to world emissions reduction.
both the united states and europe want to re-industrialize, but it is almost impossible for the united states to complete re-industrialization on its own. therefore, if europe and the united states want to achieve reindustrialization, they must open the door to chinese investment. in fact, china not only has huge production capacity, but also has surpassed developed countries in many aspects of technology. developed countries must also adapt to this.
in short, china is the standard-bearer of free trade, and the third plenary session of the 20th central committee of the communist party of china also made new commitments that china will further expand institutional openness.china has completely lifted restrictions on foreign investment in the manufacturing sector, which is china's commitment to the world. china also hopes that other countries can maintain the achievements of globalization on the world stage and maintain our existing free trade and free investment framework.
(the author is boya distinguished professor of peking university and director of the china economic research center)
source: beijing daily client
author: yao yang
