区域经济学regional economic development.ppt

1、LESSON 2,China 2030,A Report by the World Bank and the Development Research Center of the State Council of the Peoples Republic of China,Over the last three decades, China has Averaged 10% GDP growth per year Lifted over 500 million people out of poverty Become the second largest economy in the worl

2、d Become the worlds largest manufacturer and exporter Become home to 2 of the top 10 banks in the world, 61 companies on the latest Global Fortune 500 list, the worlds second largest highway network, the worlds 3 longest sea bridges, 6 of the worlds ten largest container ports.,But GDP growth is exp

3、ected to slow from around 8.5 % now to about 5% in 2026-2030. This is for several reasons: Much of the growth from transferring resources out of agriculture and into industry has already been achieved The capital-labor ratio will rise, signaling a smaller contribution to growth of continued capital

4、accumulation The old age dependency ratio (# of persons 65/# of persons 15-64) will double in the next two decades The labor force will start to shrink by 2015 Total factor productivity will decline as gains from first generation policy reforms and absorption of foreign technologies are exhausted.,I

5、t is also expected that the trade surplus will decline as exports fall and imports rise. Also, domestic market growth will replace export market growth as the major engine of growth over the next two decades. And the external capital account balance will be in deficit as investment flows out of Chin

6、a to the rest of the world.,Urbanization will grow, reaching from the current 50% to about two-thirds. But rural-urban migration will slow as the regional income gap and the rural-urban income gap both narrow. The comparative advantage from cheap labor will decline as education levels rise, increasi

7、ng the number of skilled workers and as wages rise even for unskilled workers.,China must now adopt a new strategy in order to avoid the so-called “middle-income trap”. The middle income trap refers to countries that grow due to cheap labour or natural resources, reach middle income levels and then

8、stall This means fundamental changes in the role of government in the economy.,In terms of the role of government: There needs to be greater emphasis on the role of private sector development. There needs to be emphasis on innovation in technology. Developing technology is not the same as adopting t

9、echnology. Most significantly, innovation is not something that can be achieved through government planning.,One of the important roles for government will be enhancing human capital. This means better education, health care and social security. It also means encouraging horizontal mobility of labor

10、, including rural-urban, province-province, city-city, and across occupations And vertical mobility through the social, economic and political hierarchies.,Government has a key role to play in provision of public services, institutions to support efficient market development, protection of the envir

11、onment and promotion of equality of opportunity. This is an indirect role for government. Government should reduce its role in direct production and distribution activities.,There are five characteristics that are seen as underlying the new development strategy: Improving the quality of growth while

12、 continuing to increase incomes. Achieving balanced and sustainable growth, consistent with market forces Strengthening innovation and creativity Unleashing Chinas full human potential Valuing the role of the market, the rule of law, social values and high moral standards.,Out of this comes a strate

13、gic plan that involves six new directions. These are: Transforming the role of the state and the private sector. Encouraging systemwide innovation and adopting an “open” innovation system with links to global R the expropriation of rural land for urban use needs to be controlled and the compensation

14、 system changed; and local governments need to stop selling land as a source of revenue to finance local government costs, such as infrastructure development.,For labor, there are two major problems to address: The hukou system restricts mobility Labor force participation rates need to increase, par

15、ticularly amongst older workers.,Entitlement to social services, including health services and education, should be de-linked from the hukou system. The retirement age should be extended, which will also relieve some of the pressure on pensions.,Innovation is seen as a key component of future growth

16、. To promote innovation, private sector R&D is called for. This represents a change from the present where government and state owned enterprises do most R&D.,Quality of research needs to improve. Quality of education, especially tertiary education needs to improve as well.,Green development is seen

17、 as another component of future growth. China is currently the largest consumer of fossil fuels in the world and the largest emitter of carbon, although its cumulative carbon emissions are still behind the US.,Green development can be a driving force of growth, reduce resource depletion, improve hea

18、lth, and contribute to solving the global problem of climate change.,Social policy is also of concern. China faces four problems in this arena: Relatively high inequality at this point Distorted incentives and market structures in social service delivery. Rapid aging of the population. Rising expect

19、ations.,There is a need to strengthen Chinas fiscal system New spending in social policy areas and green policy both may call for a significant increase in government spending. BUT, maintaining fiscal stability is also a necessary condition for future sustained growth.,The challenge then becomes to

20、contain the level of government spending as a share of GDP while changing the composition of spending to meet the new challenges in social policy and environmental policy.,Other challenges in the fiscal arena include: Improving the efficiency of revenue mobilization Reforming intergovernmental fisca

21、l relations Strengthening the management of government finances and improving the efficiency of public expenditures.,The overall aim in all of this is to move China to become a high income country that assumes a role of growing leadership in the global economy. China 2030 argues that this is an atta

22、inable goal by 2030 but to get there will require a determined effort by government to achieve the elements of success outlined in the report and to overcome opposition by those who are threatened by these changes.,In terms of inequality, there are three types of inequality that have been growing in China over the last 30 years. These are: Individual income inequality Urban-rural inequality Regional inequality,The latter is the type of ineq