12月13日，我院副院长朱宁教授做客CCTV NEWS《Dialogue》栏目，展望2014年中国经济走势，朱宁教授从政绩考核与GDP、地方政府与税收、就业、国际贸易等热点话题切入，全面地对中国未来经济形势进行了解读。

 China's economic goals 2014

Host: For years, we seem to have been assessed with the idea that the rapid economic development is a guarantee of the employment rate. Now, this time, it seems obviously that the new generation of Chinese leadership is well prepared to slow down the growth, no longer taking GDP as the true criteria for judging the office performance of local government officials. What would that mean that more young university graduals to develop their job lists?

Zhu Ning: Non-necessary, I think, I mean, the concerns with economic growth have been focusing on the employment or unemployment rates. But I think China is reaching a state of economic growth that we would have to balance the quality and speed of economic growth. And of course, slower economic growth would mean lower employment. But, on the other hand, we have to also balance the growth of the manufacturing sector which is slowing down and which is absorbing less of the employment and the growth of the service industry which is I think showing the potential for further economic growth and which in other developed economies is showing capacity of absorbing even more employment in the longer run. So, I think it is a sort of a balance between a longer term and a short term employment targets.

Host: In recent years, the salary of workers even for the manufacturing segment has been increasing at an average pace of 20-30 percent. That is a lot. That is a very very big increasing labor cost. What does that mean for the job market?

Zhu Ning: Well, I think it probably means two things and it is also very critical to the transition of Chinese economic growth model. I think, one thing is, it is showing that Chinese, in the past twenty years, Chinese relied on cheap labor. That economic growth model is gone. It is probably gone forever, because, for one thing, they would have become far more expensive than it have to be in the past decade; for the other, there are more economies around China, I mean, Malaysia, Thailand, Indonesia, they are also showing not only the large number of workforces but also they are willing to work harder and just to compete with those job opportunities which used to be exclusive to China but now that is gone. The other thing I think, a part of the increase in the salary or in the compensation for average workforce is a sort of reflection of the consequences of the monetary supply and inflation. I think people are also noticing that, well, things are becoming far more expensive than it used to be, especially in major cities. That is even worse if you are taking into considerations the housing market, so, this is just saying that we have to draw a balance between the affordability and the income. And then, if you are thinking everything together, then you have to find an alternative way before you could keep proposing or proposed economic growth model which is based on the real estate sector, which is based on infrastructure investment. So I guess that is also structurally we have to have a further deep-down reform which would keep this economic growth model sustainable.

Host: But, what do you think the policy of tax rebate?

Zhu Ning: I think some kind of the transition in how the export tax rebate is being used is closely related to how Chinese economic transition is going through, because if you are doing these things too fast, there will be such a big blow to the export industry which will damage the economic growth of the entire nation; but on the other hand, I think it is the right track or the right direction, because you have to show the explanation, you have to improve the productivity before they can be truly competitive internationally.

Host: At the same time, what do you think of the financing for the small and medium-sized state-owned enterprises? Is it easy for them to have an easy access to loans from Sino commercial banks?

Zhu Ning: I think there are probably two ways you can look at this problem. First, I think, SMEs which mean small and medium-sized enterprises, they have trouble getting bank loan access almost to all economies in the entire world. I think in China, it is not exclusive to China, it is probably even harder for them to access to loans in China. So, that is one thing they are being a sort of a spike again. But on the other hand, I think, the recent loans of, for example, introducing or allowing private capital to go into the banking sector or also the recent loans of booming of the so-called internet financing, I think they are providing alternative ways for SMEs to access the capital market. So, it is a sort of equivalent.

Host: Today, the Chinese economy along with the Germany surveys between engines for the world economic recovery, let’s look at and say the lacked last performance of other emerging markets with the allegation of haunting specters that the requisites would be reduced as a result of ending the quantitative easing by the new re-elected Chairwoman of Federal Reserve. What do you think or say the relationship between China and other emerging markets, because, we, following the financial crisis, back into 2008, China, has contributed more in our trade with emerging markets. And therefore, their bad performances would definitely produce negative impact on China’s exports. What do you think of, see, India, which is bad almost or other than China, which was registered at 5.5% GDP growth last year, but for South Africa, Brazil, it is 2.5% at most. Then China’s, you know, prospect of having more trades, without the emerging markets, will be very bad.

Zhu Ning: Well, I think, I mean, the entire world is becoming more and more integrated and globalized. So, I think it is not just a simple competition or a question of completion or collaboration. I think the matter is becoming more and more of a symbiotic. You are competing, at the same time, you are also collaborating. I think, I mean, what you have meant is, I think, China and the India, I mean, there have been a lot of cost-boarders as the assessment of other kinds of investments between these two countries in the past decade. So, the economic collaboration has certainly intensified during the past decade. But, I think you are absolutely right. I mean the competition is intensified because probably two reasons. One is, the entire economy, global economy is slowing down, so, I mean, within the shrinking pie, everyone tries to grasp a bigger piece. The other glamor is, I think, more and more countries are trying to use, say, devaluation of its own countries to gain some of the advantages in this world. And then, it is just becoming so strategic or so guarantee-oriented that people are trying to engage into this field to gain more or this money worth.

Host: Welcome back, given the policy which is focused on property markets as well as the office performance of officials that has been delivered recently to deliver the near economic slowdown. What do you think of the performance for local governments which are () with their local revenues? I mean is that a major issue? Do you think the local debts are likely to increase sharply as a result?

Zhu Ning: Well, I think this is exactly a quite serious issue to Chinese economic growth in the next several years for probably two reasons. One is, most of the local governments do not have a reliable fiscal revenues apart from the land sales. So, if cutting of their lifeline of their financing, then, they have to find an alternative resources for financing a large scale of infrastructure development. So I think that is one issue. The other issue, I think, which is potentially more important, is there have been a lot of informal government guarantees been provided to borrow on a local government level, so those debts are about to expire or about to mature in the next few years. So, if there is indeed a spike in the liquidity that has been required for repaying the debts, there could be a very large or massive native shock to the local governments of financing and then to the entire financial system.

Host: Did they have a lot of debt defaults?

Zhu Ning: Hopefully not, but then, I mean, I think the CBRC and the PBOC are watching very closely about, well, where do those money have been gone to and also whether those local governments have the ability, if something, if we have the something like the credit quantum is past soon, will the financing institutions and will the local governments be able to handle those situations.

Host: A very simple question for both of you, do you have any knowledge about the current percentage of service trade in the Chinese national economy? Compared with the United States, even our neighbor country India, what is percentage of service trade in China, 15% or 14%?

Zhu Ning: Yeap, about 15% or 14% or something, yeap, below 15% I believe, yeap, over 15%.

Host: Premier Li Keqiang recently praised Jack Ma found Alibaba. It is a largest internet-based economy firm. Jack Ma is proud of creating 10 million jobs. Do you think this is right, this is exactly the area where Premier Li Keqiang pleasedly hopes on the creation of job opportunities?

Zhu Ning: Well, I think so, because, if you look at the international markets, I think there are probably two patterns. One is the new economy, the internet where the information economy is creating more jobs than the traditional economy. The other is the service trade, creating more opportunities for, than manufacturing. And then probably eventually it is the SMEs that would be creating more jobs than the large-scale enterprises. So I think this is also a deep-rooted, I think, Premier Li Keqiang’s idea about urbanization which is trying to make the, I think, according to some people, turn the pattern into farmers for people who have a more urban lifestyle which they could be employment, employed in a more and more industries. I think that is the focus or that is the challenge that Premier Li Keqiang is having in his mind.

Host: There is a very big gamble between Wang Jianlin and Ma Yun(Jack Ma), the top rich man, the richest man, Wang Jianlin, the public developer, as to whether the traditional department stores will be replaced by Alibaba or other kinds of e-commerce firms. Where would you put your money on?

Zhu Ning: That is a tough question right? I mean, people are paying a hundred million for outcome.

Host: I’m afraid Wang Jianlin has disagreed with that saying.

Zhu Ning: I think, I mean, I think the Chinese career, I think the internet economy or the e-commerce is gradually over taking the traditional economy that is, without doubt, what is going to happen in five years or ten years or twenty years, I think, that is great. Whereas, we should put more emphasis on the other hand, we have to be realistic about there are certain aspects of real estate, or commercial real estate, for example, movie theaters, for certain things, you cannot do online. Even you prefer, not to do that.

Host: That is a convincing argument of Wang Jianlin. Some kind of things, for example, foot massage, cannot be replaced by e-foot massage, right?

Zhu Ning: It depends on what is your benchmark, yeap?

Host: The () catches up very quickly. It owns a huge population of its netizen of at least 400 million, if not, 600 million, I can’t remember the exact figure, but it is at least, you know, 400 million users. If these people find it easier to use their smart phone to pay for their service, then, is it indeed a genuine threat to the Chinese traditional banking system?

Zhu Ning: Yes, I mean, if you look at the banking world, the key of competitive advantages of the banks, I think there are probably several aspects. One is the network aspect. You have your clients who are familiar with you and then you can do business with them. The other is risk management, so you have better sense of management risks than other enterprises. The third, which probably more important in China, is regulator requirement. There are a lot of banks which are familiar with what to do with the CBRC, the regulators. And some of the internet companies are not that familiar at least for the moment. So, I think the threat again is going into the favor of the internet bubble, internet economies, but then it is not as fast as people have thought, for example, if you look at, the twenty-eighty rules here, because the majority of the consumers, they are doing a lot of the business. But if you look at the entire amount of loans being taken out, it is still the large enterprises and the SOEs who are taking it out.

Host: You are right. You are mainly talking about something that is already doubled in that.

Host: Do you know how and why some of the () () go rich overnight, it is because the enormous benefits from the privatization of SOEs? Do you think that is likely to happen in China?

Zhu Ning: Well, privatization is always a very sensitive process. So, I mean, let’s rethink about it. It is a process which is going to be transforming a lot of wealth from one part of the economy to the other. But then, I think, hopefully, I can’t agree with William. I think, it is just a matter of time than we would have to see some privatization decisions before the government can have the fiscal resources to push forward the further economic growth. But then, how would this be handled? I guess that is one thing you have to be fair and transparent. The other is, I mean, there have to be the market forces which we have to have reliance on and also have to be exclusively playing a role. It is not going to be a () capitalism that is going to rely on a certain small internal favors to have a transparent process.

 China's economic goals 2014