**: NetEase Finance Think Tank, Peking University Development Institute.
Yao Yang is Dean of the National School of Development, Peking University
In the context of major changes unseen in a century, the world pattern is undergoing profound changes, what role does China play in it, and how to find new momentum for economic development in this wave? Yao Yang will start with China's opening up, deeply analyze the evolution of the global economic map, expose the key points of the Sino-US game, and how China should learn to be a big country in this situation.
60s Essentials Speed Reading:
1. We must have a level-headed attitude towards the West. Heads-up means not always complaining, always blaming them for what they do;Of course, it is not to look down, it is not okay to accuse the West of anything, level-headed is reciprocal, and in some cases it is necessary to learn to understand the other side.
2. China's economic momentum has risen and is unstoppable, and the United States is unable to compete with a newly rising power in this situation. The hollowing out of the American industry is too serious, it is equivalent to an empty thing, competing with our real things, how can it ever compete?The United States has clearly made a strategic mistake.
3. Competition between China and the United States is not a bad thing, as long as we manage competition and prevent it from becoming a confrontation, it may be beneficial competition. At least from China's point of view, because it forces China to do something that we didn't do before, such as high-end chips, and it forces us to do it now, we do it, but it may cost the United States a lot of opportunities.
Here's a rundown:
From the perspective of development economics, openness alone does not necessarily promote economic growth. Because the economy of the vast majority of countries in the world is very open, but we see that some countries are becoming less developed the more they are open, such as some countries in Africa, and the result of opening up is that everything is provided by other countries, and they have nothing.
The reason why China's opening up has been successful is that we have carried out industrialization for more than 30 years and established our own industrial system, starting with the Westernization Movement in 1860. Therefore, a certain industrial base is necessary, otherwise once the country opens up, everything will be imported from abroad. No manufactured product can be sold cheaper than others, and the quality is better than others.
This is also why in the twenties and thirties of the last century, we have to talk about the defeat of national capital, national yarn mills, and national textile mills by foreign textile mills. Only when we have a certain industrial base can we succeed in opening up. So opening is not a simple point-in-time choiceThe premise of opening up to the outside world is to be beneficial to the country's economic growth, and the premise must be its own industrial base and a certain level of national education, and only in this way can it catch up with foreign things.
To a certain extent, China's openness is a kind of openness in management. At the beginning, we built a special economic zone with the welcome of foreign investment as a breakthrough and did some experiments in the special zone. In terms of exchange rates and capital flows, opening up has always been a process of gradual progress. In 1994, the exchange rate was fully consolidated into a single exchange rate, but our capital account has not yet been opened.
Therefore, China's opening up is not all at once, everything can be done, it is an orderly and managed opening-up. China can do this because China is a big country. In the case of small countries being forced to open up on the premise of some international institutions and certain large countries to assist small countries, the results of small countries being forced to open their doors are not satisfactory.
Today, the world has undergone profound changes.
After World War II, the whole world was dragged into the process of globalization, which never happened. The historical pulse of the countries of the world is synchronized, and the whole world is developing in the direction of so-called integration. In the 20 years from the 90s to the first decade of this century, this period of globalization has been a process of hyper-globalization.
However, the world has indeed contracted over the past decade, and this may be one of the pulses of history. It's like the four seasons of the year, there is spring, there is summer, there is autumn, and now it may be winter. What are you going to do in the winter?Let's reflect on it: when farming, we have to deal with some daily work in the winter, think about what to do next year, a new spring is coming, so all countries in the world are doing the same thing, they are all reflecting on globalization.
Europe and the United States are mainly focused on two things, one is reindustrialization and the other is immigrationAnd maybe immigration is a bigger problem. What we're seeing now is that we have to shrink and we can't allow so many immigrants to come, because illegal immigrants entering the United States have really had an impact on American society.
The same is true of reindustrialization, which is believed to have been caused by geopolitical instability caused by the United States. But when we look at it in the context of history, reindustrialization will happen sooner or later. Just like Obama proposed "buy America", he also wanted to reindustrialize, but he did not come up with measures.
At present, the most important thing in the evolution of the global economic map is the rise of China. Our economy is not the largest in the world, but the manufacturing industry is the largest in the world, and this is the imbalance. China's manufacturing accounts for 30% of the world's total, but China's GDP accounts for only 17% of the world's. This gap means that China has to export products to the world, and it cannot digest it itself. The United States only accounts for about 18% of the world's manufacturing industry, but its GDP accounts for more than 20% of the world's GDP, so the United States must absorb the products of manufacturing.
The share of other developed countries in the world's manufacturing industry is declining. They wake up and suddenly realize, how is it that the vast majority of things are produced in one country?Looking at China from the perspective of developed countries, it is different from what we see. They perceive that they are too dependent on one country, and that there is a big risk in this, so they try to adjust.
But this trend is difficult to reverse. If developed countries want to reindustrialize, I am afraid that this time has passed forever。Young people in developed countries will not return to the factory, which is a problem faced by developed countries, and its re-industrialization will face great resistance. For example, Foxconn went to Wisconsin to set up a factory in Wisconsin when Trump first took office, and planned to employ 10,000 people, I thought it was unrealistic at the time, and it was impossible for the United States to have a factory with 10,000 people. They were confident enough to go there and build a factory, but now it's a finished project.
Now TSMC is going to Arizona to build a factory, and the process is very bumpy, and how to operate in the end is a big problem. Young Americans will not and do not want to work in factories again, if they have the ability to do the jobs required by TSMC, they will definitely choose to go to Silicon Valley or Wall Street, or the Pharmaceutical Triangle (North Carolina Research Triangle Research Park, which is the third largest biotechnology concentration in the United States), and will not go to the factory to guard the machine, which is unbearable for young Americans.
So, what we're seeing is still that the world's manufacturing industry is moving to East Asia and Southeast Asia, not just China, other countries or regions in East Asia, but Southeast Asia – this trend hasn't changed.
In the next step, China's electric vehicles will have a great impact on the world. Just as Japan exported a lot of cars in the 80s, other countries found that the roads were full of Japanese cars. In the future, everyone may see that there are all Chinese cars running on the road, and they will realize that there are also "hidden dangers" here.
The rise of China will undoubtedly pose a challenge to the United States. Whether we admit it or not, this is a challenge from the perspective of the United States. This kind of competition and decision-making between countries can hardly be said to be rational, and it has an emotional element in it. In this case, geopolitics and economics are completely interrelated, and it is difficult for us to pull it apart. Geopolitical tensions are unlikely, and the economic side can be very lively, so adjustments are bound to follow.
From 1972, when the United States was rapprochement, to the 80s, Sino-US relations entered a so-called "honeymoon period", and then entered a period of more than 20 years. In the past, the United States believed that as long as it continued to engage with China, China would become more and more like the United States. However, after 2010, the United States suddenly found that this was not the case. For some Americans,He will think that China has not only become our friend, but also our enemy. This is a dramatic change in U.S. policy toward China, which began around 2010.
One of the landmark events of 2010 was Hillary Clinton's rebalancing to the Asia-Pacific region, which was a big change. It was a bit more moderate at the time, but in the Trump era, it became clear that it was going to compete with China. Therefore, I personally believe that the relationship between China and the United States is unlikely to return to the past, and I estimate that the relationship between China and the United States is unlikely to change in the next two or three decades. The two sides compete on almost everything: economic, geopolitical, ......
But I don't think that's a bad thingAs long as we manage the competition and don't let it turn into a confrontation, it may be advantageous competition。At least from China's point of view, because it forces China to do something that we didn't do before, such as high-end chips, and it forces us to do it now, we do it, but it may cost the United States a lot of opportunities.
China's economic momentum has risen and is unstoppableIn this case, the United States has to compete with a newly rising power, and I don't think it is able to do it。The hollowing out of the American industry is too serious, it is equivalent to an empty thing, competing with our real things, how can it ever compete?The United States has clearly made a strategic mistake.
The United States forces its allies to choose sides, but its allies may not follow it. The fact that the allies told the United States that they did not want to choose sides economically also forced the United States to rationalize. In the past year, Sino-US relations have moved towards a more rational period.
First, both countries should imagine the future on the basis of rationality. Although it is impossible for everyone to completely abandon their emotions, only by returning to reason can the relations between the two countries be stabilized, otherwise it will be impossible for everyone to stabilize with emotions, and mutual accusations are quarrels.
Second, new rules need to be established. The United States believes that the WTO has suffered a loss, and it wants to retalk about it. In fact, this is an opportunity for China to formulate the next round of rules. In multilateral institutions, it is very difficult for China to play a role. Now the United States has given us an opportunity, which is bilateral, and the United States must first talk to China, and we should strive to seize this opportunity.
In terms of the U.S. strategy of trying to decouple from China, first of all, the U.S. export control policy toward China is unlikely to change in the short term, and I don't even expect it to remove those tariffs. But a new balance has been established between China and the United States, for example, it imposes high tariffs, and China's exports to the United States have declined, and direct exports have declined, but it does not mean that China will not take a detour. For example, a lot of our companies have moved to Southeast Asia, to Mexico, and they are still exporting to the United States. All of this is added to the equation, and China's exports to the United States are not necessarily declining.
Because the division of labor in the world makes sense, there is its own economic logic behind it. It's impossible for the Americans to do that, and it's impossible for them to produce clothing, shoes and hats. Isn't the United States itself trying to build a 5G alliance?He announced it, but nothing came out. Because 5G technology is inseparable from Huawei's technology and ZTE's technology. It can't be done without the standards that Huawei and ZTE have contributed a lot to. Under such circumstances, it is impossible for the United States to completely decouple from China.
First, we need to have a global perspective. Global vision is not simply to sell something to others, to give people a little help, global vision meansChina wants to imagine itself being responsible for the whole world, including the rules, and perhaps the rules are more important.
Second, we must have a level-headed attitude toward the West. Level-eyed means not always complaining and blaming the other person;It's not like looking down and slamming the other party for nothing. Head-up is reciprocal, and in some cases you have to learn to understand each other. For example, the United States says that it has suffered in the process of globalization, but China thinks, how can you suffer?You see we sell so many things, we help you spend and so on. Can you say the other way around?You said I understand you, globalization has created a lot of problems for the United States - the problem of income distribution, the problem of immigration, and so on. If you say this, isn't it standing on a higher moral high ground?Rather than simply saying that you're bad if you do it. As a world power, you must learn to understand different countries.
China has developed to this day, and it must be a big country and stand in the spotlight of the world.
Based on the shorthand of the interview, it has not been confirmed by the person. ）