(no subject)
Questions about how the Chinese economy will fare in a depressing global market have been the source of much speculation recently, but two experts expressed their optimism yesterday, in a panel sponsored by the Forum for American/Chinese Exchange at Stanford (FACES).
Political Science and Chinese Politics Professor Jean Oi and Stanford Center for International Development Senior Fellow Ronald McKinnon spoke about the future of China’s economic growth in front of a capacity audience of students and scholars in Bechtel Conference Center. Both speakers were upbeat about China’s performance in the current economic downturn.
Oi began the discussion by contradicting the belief of “China in peril.” With exports falling by 25 percent a year, and the growth rate shrinking from 13 percent in 2007 to 6.8 percent in the first quarter of 2008, many are worried about China’s export-led growth.
Nonetheless, according to Oi, the share of exports in Chinese GDP is much lower than the press estimates. Often cited as 30 percent, the figure might be as low as 10 percent, lower than most of Southeast Asia and close to that of Japan and India. Oi also noted that China’s export dependence is a recent phenomenon concentrated in its southern part, while “the heart of the Chinese economic miracle really started in the countryside,” and is sign of a “very much domestically driven development model.”
McKinnon concurred with Oi’s overall assessment, contending that the true picture of Chinese economy is far less dire than newspaper headlines sometimes make it out to be.
“If you’re a reader of The New York Times, you’ll likely get the wrong idea,” McKinnon joked, dismissing the prospect that economic hardships in China might lead to social unrest.
The panel was part of the annual FACES conference “On Common Ground.” A select group of 40 delegates from top colleges in U.S. and China will be on campus April 12-17 for a series of panels and discussions on U.S.-China relations. FACES President Matt Platkin ’09 said the conference fit with the group’s main goals.
“The goal of FACES is to bring in a diverse group of future leaders that are interested in issues across the board,” Platkin said.
Oi maintained her optimism when discussing further challenges posed by the crisis and even saw a silver lining in the Chinese government’s $586 billion stimulus package. She considered the half-trillion in stimulus money a timely resource for China to renovate its infrastructure and build much-needed railway and high-speed tracks. The Chinese are also gripping the opportunity to “go up the value chain,” she observed, with their recent efforts in developing electric cars and improving energy efficiency.
From a financial perspective, McKinnon assessed China’s development through the years. He compared the current pressure in the U.S. Congress to appreciate the Chinese currency to the historical “Japan bashing” in previous decades. McKinnon pointed out that Japan’s eventual decision to appreciate the Yen “thoroughly destabilized the Japanese economy and contributed to the collapse of the global economy in 1991.”
McKinnon also called the proposed policy to appreciate the Yuan “a big mistake in political economy and a major influence on American policy.”
Arguing against the continual rise of the Yuan, McKinnon affirmed that a fixed currency serves to anchor China’s domestic price levels and contributes to more stable growth. A pegged currency would, according to McKinnon, check the pouring of hot money into China, while the ever higher value of the Yuan would slow investment, without definitively reducing saving.
“When you think of fixed currency, you think of rigging the market,” McKinnon said. “I think we should call it international monetary harmonization.”
McKinnon concluded his talk by commending the economic policy of the current Chinese government. He drew on the surge of corporate profitability and the expansion of commercial bank credits in China as evidence of the country’s economic vitality, labeling China as the only place in the world where commercial banks are expanding. He also urged the U.S. to stop “China bashing” and to rely on China to pull the world out of crisis.
Platkin felt the timing of the conference made the economic issues particularly relevant.
“This year is special in a way, because it’s probably in the worst global climate that the U.S. and China have faced since the founding of FACES,” he said. “I think that’s an interesting backdrop to host a conference like this; as the panel shows, [the issues are] on a lot of people’s minds.”
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URL to article: http://www.stanforddaily.com/cgi-bin/?p=1029135
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Copyright © 2008 The Stanford Daily. All rights reserved.
Political Science and Chinese Politics Professor Jean Oi and Stanford Center for International Development Senior Fellow Ronald McKinnon spoke about the future of China’s economic growth in front of a capacity audience of students and scholars in Bechtel Conference Center. Both speakers were upbeat about China’s performance in the current economic downturn.
Oi began the discussion by contradicting the belief of “China in peril.” With exports falling by 25 percent a year, and the growth rate shrinking from 13 percent in 2007 to 6.8 percent in the first quarter of 2008, many are worried about China’s export-led growth.
Nonetheless, according to Oi, the share of exports in Chinese GDP is much lower than the press estimates. Often cited as 30 percent, the figure might be as low as 10 percent, lower than most of Southeast Asia and close to that of Japan and India. Oi also noted that China’s export dependence is a recent phenomenon concentrated in its southern part, while “the heart of the Chinese economic miracle really started in the countryside,” and is sign of a “very much domestically driven development model.”
McKinnon concurred with Oi’s overall assessment, contending that the true picture of Chinese economy is far less dire than newspaper headlines sometimes make it out to be.
“If you’re a reader of The New York Times, you’ll likely get the wrong idea,” McKinnon joked, dismissing the prospect that economic hardships in China might lead to social unrest.
The panel was part of the annual FACES conference “On Common Ground.” A select group of 40 delegates from top colleges in U.S. and China will be on campus April 12-17 for a series of panels and discussions on U.S.-China relations. FACES President Matt Platkin ’09 said the conference fit with the group’s main goals.
“The goal of FACES is to bring in a diverse group of future leaders that are interested in issues across the board,” Platkin said.
Oi maintained her optimism when discussing further challenges posed by the crisis and even saw a silver lining in the Chinese government’s $586 billion stimulus package. She considered the half-trillion in stimulus money a timely resource for China to renovate its infrastructure and build much-needed railway and high-speed tracks. The Chinese are also gripping the opportunity to “go up the value chain,” she observed, with their recent efforts in developing electric cars and improving energy efficiency.
From a financial perspective, McKinnon assessed China’s development through the years. He compared the current pressure in the U.S. Congress to appreciate the Chinese currency to the historical “Japan bashing” in previous decades. McKinnon pointed out that Japan’s eventual decision to appreciate the Yen “thoroughly destabilized the Japanese economy and contributed to the collapse of the global economy in 1991.”
McKinnon also called the proposed policy to appreciate the Yuan “a big mistake in political economy and a major influence on American policy.”
Arguing against the continual rise of the Yuan, McKinnon affirmed that a fixed currency serves to anchor China’s domestic price levels and contributes to more stable growth. A pegged currency would, according to McKinnon, check the pouring of hot money into China, while the ever higher value of the Yuan would slow investment, without definitively reducing saving.
“When you think of fixed currency, you think of rigging the market,” McKinnon said. “I think we should call it international monetary harmonization.”
McKinnon concluded his talk by commending the economic policy of the current Chinese government. He drew on the surge of corporate profitability and the expansion of commercial bank credits in China as evidence of the country’s economic vitality, labeling China as the only place in the world where commercial banks are expanding. He also urged the U.S. to stop “China bashing” and to rely on China to pull the world out of crisis.
Platkin felt the timing of the conference made the economic issues particularly relevant.
“This year is special in a way, because it’s probably in the worst global climate that the U.S. and China have faced since the founding of FACES,” he said. “I think that’s an interesting backdrop to host a conference like this; as the panel shows, [the issues are] on a lot of people’s minds.”
Article printed from The Stanford Daily: http://www.stanforddaily.com/cgi-bin
URL to article: http://www.stanforddaily.com/cgi-bin/?p=1029135
Click here to print.
Copyright © 2008 The Stanford Daily. All rights reserved.