Lin Yifu: China'S Traditional Industries Still Have 8% Growth Potential

Recently, Lin Yifu, professor and President of the Institute of new structural economics of Peking University, analyzed the practical significance of the "double cycle" which has attracted wide attention at present, and interpreted the advantages of China and Chinese enterprises in this pattern.

Lin Yifu said that there are short-term reasons for the proposal of "taking the domestic big cycle as the main body", but the more important is the basic law of economic development. In fact, the road of China's economic development has not changed.

In the short term, due to the outbreak of new pneumonia, the economies of all countries have suffered a great decline this year. According to the prediction of WTO, international trade may decrease by 13% to 32%. Trade has decreased. Of course, China's products are more digested and recycled at home.

From the more important basic law of economic development, China's export accounted for the highest proportion of GDP in 2006, reaching 35.4%, while that in 2019 was 17.4%. That is to say, 82.6% of domestic production has been digested and recycled in China. Talking about the reasons for the decline from 35.4% in 2006 to 17.4% in 2019, Lin Yifu believes that the main reasons are: the larger the economy, the lower the proportion of exports; and the more developed the economy, the greater the proportion of service industry. Many service industries are not tradable. Therefore, some high-income economies, such as the United States, whose service industry reaches about 80% of the economy, will have a lower proportion of exports than China. In 2019, U.S. exports accounted for only 7.6% of GDP, which means that 92.4% of the U.S. economy circulates in the US.

Lin Yifu said that looking forward to the future, China's economy will also continue to develop. The proportion of China's economy in the world economy will increase, China's income will increase, and the proportion of service industry will increase. Therefore, the proportion of foreign exports will continue to approach 15%, 12% and 10% from 17.4% in 2019. Under this situation, it is conducive for us to recognize China's situation The situation of the three stages of development is conducive to seizing opportunities and continuing to move forward.

Lin Yi believes that China's economic development has three competitive advantages.

Traditional industries

In terms of traditional industries, China has the advantages of the latecomers. In 2019, China's per capita GDP will be 10098 US dollars, which is still a considerable gap compared with us $60000. Compared with the developed countries, China's current development situation is a bit like that of Japan in the 1950s, Singapore in the 1970s, and South Korea in the 1980s. These East Asian economies have maintained an average growth rate of about 8% to 9% taking advantage of the technological gap in the industrial chain with developed countries. China also has 8% growth potential in terms of catching up with latecomers in traditional industries.

New industrial revolution

Advantages in the new industrial revolution. Including the Internet, artificial intelligence, cloud computing, 5g, Internet of things and other industries, the product and technology R & D cycle of these industries is particularly short, which is conducive to the development of China, a big country with human resources. Moreover, China has the most complete industry in the world and the best supply chain in the world. In this kind of short cycle new industrial revolution, China also has the advantage of half overtaking the developed countries The most obvious performance of "unicorn" enterprises is "unicorn".

Purchasing power

Advantages in purchasing power. China has the largest market in the world. According to the market exchange rate, China is also the second largest market in the world. The larger the size, the greater its ability to resist external shocks. Therefore, China can maintain more stable development than other countries in the future.

Lin Yifu believes that if we make good use of these three advantages, China's economic growth rate may still be between 2% and 3% this year, even if affected by the new crown pneumonia epidemic. The economic growth rate of the whole world may be negative 5%, that of the United States may be negative 8%, and that of Europe may be negative 10%. In this case, even if we are a little bit slower and other countries are slower than us, we may be more ahead of them.

Lin Yifu said that since 2008, China has contributed 30% of its market expansion to the world's growth every year. Under the new development pattern, he believes that China can still contribute 30% to the growth of the world economy every year. China is still the fastest growing country in the world and will provide the best stage for entrepreneurs to play.