馃攳
Will China become the centre of the world economy? | FT - YouTube
Channel: Financial Times
[0]
[Music]
[1]
china's economy has developed at an
[3]
extraordinary rate
[5]
in europe and the us the mood has been
[8]
shifting
[8]
sharply and quickly china is so huge
[12]
that it comprises different realities at
[15]
the same
[16]
time the global economy itself is
[18]
starting to somewhat fragment
[26]
china's economy has developed at an
[28]
extraordinary rate over the last 40
[31]
years
[32]
across so many areas the size of its
[34]
domestic market
[35]
the technical prowess of its leading
[38]
companies
[39]
even the feats of exploration in space
[42]
and its growing military might have
[44]
astounded the rest of the world
[47]
but martin the key question now is
[50]
will china become the center of the
[53]
global economy
[54]
there is no doubt that china's growth up
[57]
to
[58]
this point and its continuing growth
[60]
mean
[61]
that it will be a major player
[64]
in the global economy forever more but
[66]
there are reasons to doubt that it will
[68]
be the center the unique
[70]
center of a global economy partly
[73]
because
[74]
other parts of the world will not be
[76]
keen to let it and partly because the
[78]
global economy itself
[79]
is starting to somewhat fragment into a
[82]
more regionalized
[83]
rather than a globalized economy
[91]
i went to china as a student nearly 40
[93]
years ago
[94]
and it was a place completely different
[96]
from the high-tech
[98]
economic superpower that we see today
[100]
there was rationing of grain
[102]
cotton and several other basic
[104]
commodities and a train from hong kong
[107]
to beijing
[108]
took over four days to arrive the same
[111]
journey today would take about nine
[113]
hours
[114]
the best statistic i think to put this
[117]
extraordinary
[118]
change into context is average gdp
[122]
growth
[122]
and since 1979 to the end of 2018
[127]
china's gdp growth averaged 9.5 percent
[133]
a year martin is this unique
[136]
as far as you know in in history
[139]
well i think it is unique in the
[140]
following sense there have been other
[142]
countries that have racked up
[144]
higher growth rates for a little bit of
[146]
time but you've never seen anything
[148]
of this size go back 2 000 years
[152]
when everyone was equally poor the point
[154]
of gravity the center of gravity of the
[157]
global economy basically followed
[158]
population
[159]
size and then with the renaissance and
[161]
the industrial revolution
[162]
you saw europe and then later north
[164]
america forge ahead
[166]
in the last 40 years it's been moving
[168]
back towards
[169]
towards asia into asia and towards china
[173]
but in a sense it's really just getting
[175]
back to what
[176]
used to be the normal state
[179]
still kind of extraordinary that they've
[181]
done it so fast even if it's a return to
[183]
normality as i call it
[185]
but james how did they do it
[192]
to start with in the late 70s they began
[195]
a program of
[196]
market reforms that really overhauled
[199]
the entire
[200]
uh communist command economy by the
[203]
early to mid 90s
[206]
they began to really put an accent on
[209]
attracting foreign direct investment but
[211]
i think the really
[212]
key change in china came again probably
[216]
in the mid 90s when china began to allow
[219]
the sons and daughters of farmers to
[222]
migrate
[223]
from the village to these big factory
[226]
towns
[227]
i would say that the chinese communist
[228]
party has sort of proved that capitalism
[231]
works
[231]
capitalism and freeing up the movement
[234]
of labor
[235]
but let me add one other aspect of this
[237]
which is how
[238]
the western high-income countries were
[241]
pursuing globalization at the time
[243]
because in the 80s and the 90s you saw
[245]
a big push for more liberalized global
[248]
trade
[249]
so globalization was taking place at the
[252]
behest and led by
[254]
the high-income countries but china
[256]
could just slot
[257]
straight into that a big part of the
[259]
answer to the question we're asking
[261]
whether china will become the center of
[263]
the global economy
[264]
is whether that development model can
[267]
continue
[268]
to work because what strikes me is that
[270]
with all of this success
[272]
china is still a relatively poor country
[274]
isn't that right
[275]
absolutely in fact china currently ranks
[278]
61st in the world in terms of
[282]
countries by their average per capita
[285]
incomes on an aggregate basis
[287]
china is still very much a developing
[290]
nation
[291]
but it's a very anomalous country as
[293]
well because
[295]
it's got all of this high-tech prowess
[297]
it's got this amazing infrastructure
[299]
it's a very different type of economic
[301]
beast i think from
[303]
the type of developed country that we
[306]
can see elsewhere in the world
[310]
[Music]
[312]
let's look at chinese average income
[314]
compared to
[316]
the world leader the u.s and we can see
[319]
that
[319]
while it was very poor before this whole
[322]
economic revolution happened it's still
[325]
not rich
[326]
china is so huge that it comprises
[330]
different realities at the same time the
[333]
chinese middle class
[334]
numbers these days about 400 million
[337]
people
[338]
that is obviously greater than the
[340]
entire population of the united states
[343]
but there's also about a billion chinese
[346]
that are much
[347]
less well off economies call this the
[349]
middle income trap you get to a certain
[351]
point
[352]
fast growth and then you kind of
[354]
stagnate
[355]
before you've pulled everyone into the
[357]
middle class
[358]
i mean one reason why people think that
[360]
happens is because
[361]
getting from poor to middle income it's
[364]
a very different process from getting to
[365]
middle income to
[367]
high income chinese consumers last year
[370]
spent
[370]
about 7.3 trillion us dollars
[373]
that by the way is greater than the
[376]
entire gdp of the japanese economy
[379]
but now i think we're entering a very
[381]
different phase and that one
[383]
is characterized by chinese emergence as
[386]
a technological power
[388]
i think that's crucial james because one
[390]
thing that economics and economic
[392]
history show
[393]
is that if there's a way out of the
[394]
middle income trap it's by
[397]
changing from a growth model based on
[399]
accumulating labor and capital
[401]
to a growth model led by technological
[404]
development and technological progress
[408]
[Music]
[411]
china is likely to be and really already
[413]
is
[414]
a middle-income country that leads the
[417]
world
[418]
in many areas of technology let me just
[420]
put some flesh on those bones
[423]
let's just count the sectors in which
[426]
china is either a global leader or at
[428]
least close to the cutting edge
[431]
a wind and solar power online payment
[434]
systems
[435]
digital currencies aspects of artificial
[438]
intelligence such as facial recognition
[441]
quantum computing satellites and space
[444]
exploration
[446]
5g telecoms drones ultra high voltage
[450]
power transmission china really is
[453]
kind of at the cutting edge of a lot of
[455]
important technologies in the world
[459]
so maybe i can ask you james if you
[460]
agree that there's a very conscious
[462]
strategy here among chinese policymakers
[466]
to to make the world more sinocentric
[469]
china's driving its uh standards
[473]
setting processes around the world
[475]
precisely to do as you
[477]
describe to try to
[480]
ensure that the latest technologies
[482]
around the world are at least
[484]
partly or largely dependent on chinese
[487]
technologies
[488]
it looks to me like the intention is
[491]
there to be
[492]
the unique global center the big
[494]
question though
[495]
is whether the rest of the world is
[497]
going to play ball and let that happen
[500]
[Music]
[505]
it's not often fully appreciated that
[507]
the globalization we've seen in the last
[509]
few decades
[510]
it's still quite regionally organized
[513]
in this chart that looks looks at
[515]
different economies
[517]
weight in the global trading system and
[519]
the main trading relationship
[521]
what we really see is three hubs one
[524]
centered on germany one centred on china
[527]
one centered on the us
[529]
and if we look at the more complex kind
[531]
of trade relationships
[533]
global value chains where inputs cross
[535]
borders many times
[537]
it looks even more regional so
[540]
i think that this is actually the
[542]
direction we're going
[544]
that we're probably going to see even
[546]
more intensification of trade
[548]
relationships
[549]
at regional level but not necessarily
[552]
that much more deep trade or deepening
[555]
of trade happening between the three big
[558]
blocks the eu the u.s
[560]
and china it's certainly true that china
[563]
is putting a
[563]
big accent on expanding its trade and
[566]
investment relationship with
[568]
southeast asia which i think it
[570]
increasingly sees
[572]
as a backyard market as it were also
[575]
china would be very reluctant to
[577]
in any way give up uh its u.s market
[580]
or the european market i mean these are
[582]
huge drivers of
[584]
china's export growth so we'll see what
[586]
sort of choice
[587]
china is given about this because it's
[590]
very clear that
[591]
in europe and the us the mood has been
[594]
shifting
[595]
sharply and quickly and i think the fact
[598]
that global trade
[599]
in itself is moving to more towards more
[603]
complex
[604]
value chains and more services trade and
[607]
digital trade
[609]
that also is going to strengthen the
[612]
political aversion to integrating with
[614]
with china so this is why i think that
[617]
while china will
[619]
as i said forevermore be a major part of
[622]
the global economy
[623]
we are probably looking more at regional
[626]
dominance
[627]
than becoming the unique center of one
[631]
homogenous global economy i think the
[634]
scenario that the world
[635]
splits into three or more regional
[638]
trading blocks
[639]
is certainly not conventional wisdom at
[641]
the moment
[642]
and if the world was to move into that
[644]
direction it would suffer
[646]
huge disruptions there would be
[648]
protectionism
[649]
the decoupling of supply chains and
[652]
several other reversals as well
[654]
however sitting here in hong kong i can
[657]
see the pressures that might lead to
[659]
such an
[660]
outcome building up so i think the key
[663]
point right now is that unless the eu
[666]
the us and china can sort out their
[669]
differences
[670]
we could see the regionalization of
[674]
global trade
[675]
becoming a reality in several years time
Most Recent Videos:
You can go back to the homepage right here: Homepage