1月20日，我院副院长朱宁教授做客CCTV NEWS《Biz Asia》栏目解读2013年中国经济增长数据，他指出7.7%的增长高于了他的预期，体现出了中国经济增长质与量的平衡。
 

Host: Gentlemen, thank you for joining us in the program today. I want to first start by asking you both your thoughts on the 2013 growth rate of 7.7% because slower than 2012; but I want to ask you this as well, because policy makers here in the country stated that they are willing to tolerate a slower growth, right? How slow do you think they would tolerate a slower growth? Professor Zhu, let’s start with you first.

Zhu Ning: Well, I personally is actually pretty happy with the 7.7% growth rate. I think, to be honest, it is a slightly higher than my personal forecast, because, well, I am keeping in mind that the US economy was not as strong as it is right now about a year ago and also let’s not forget that there have been a lot of speculations about what is going to happen in the third plenum. So there have been some parts in the reform and there have been some parts in the investment projects. So regarding, I mean, how low the government is willing to tolerate the economy growth to go down to, I was thinking it might be 7%, but then some people are probably thinking for higher 7.2 or 7.5. But I think it is not really the growth to me. I think it is the sustainability. It is the balance between the growth and the quality, because we have seen that the economic has growing, has been growing really fast in the past five years. But then it’s actually causing some more problems, especially in the financial sector and in the infrastructure and real estate sectors. So I think some balance we have to drive about, well, we want some short term spring or want some measures which can be sustainable in the next two or three decades.

Host: I want to ask you Professor Zhu, because I am touched down export when I breakdown the source of the components of GDP. Of course, exports are components, domestic exports are components of GDP. What do you think China’s export picture would look like in 2014? Do you think it is going to rebound? Do you think it is going to be a little bit sluggish? because we still have the world bank MDI both revising global economy is going to look up this year.

Zhu Ning: Yeap, I do see the export to keep growing in the coming year, I think for two primary reasons. One is, we are seeing the tempering off of the quantitative easing by the US Federal Reserve which is signaling the sluggish economy rebounded in the US which is translating into a stronger consumption demand from the US which is the largest partner for China.

Host: That would cause a lot of opportunities, though, for the emerging markets.

Zhu Ning: I don’t fully agree with. But I think two privileged reasons. I think the second reason is, I guess, is I think China is transforming its own economy. I mean, we used to be producing just lower and the lower value added products. But now, I think, China has its own research and design, has its own brand, so I think it is creating a new market need; whereas I think Chinese companies are exporting more to the higher end countries such as US. So I think China may be benefitting from compound effect of the recovery of the US and it is upgraded into a higher value added area of the export products.

Host: Well, China’s growth continues to slow, Professor, do you think the government will spend a lot more this year, because in terms of fiscal revenues, in 2012, that increased by about 13% on year on year, which is not that high, do you agree? In the latter half of 2013, that was about 17%, so given that, do you think the government will spend more? And usually, when the Chinese government spends more, that contributes more to growth by, I would say, the consumption?

Zhu Ning: Yes, I think the government certainly has the ambition, I mean, in control. So, I think if the economy is really falling down to below 7%, we definitely see a greater deal of stimulus. But then let’s not forget about what has happened after the fortune stimulus packages, so I think the government has already learned its sake of the lesson. So, I don’t see another big deal of stimulus packages after, I mean, the economy is slowing down. I think there would be some spark, there would be some critical treatments about maybe in the consumption areas, maybe in the public highway system, maybe in the railway system but then not as grand as what has happened in () because what, we are dealing with some of the problems, the shadow banking problems, the local government debt problems and some of the risks having been accumulated in the financial system that is actually dated back to the fortune stimulus packages five years ago.

Host: And also talk about the market investigation, a previous digging about probability of the central bank to make its fortune protection policy given that the GDP affair can be more moderately than their expectations and home price rising, we just saw that. What is your take on that, Professor Zhu?

Zhu Ning: Well, I think as the central bank has released it for many times, it would resurge a new sort or a sort of tightest monetary policy. I think on that, I don’t think any of the figures we have seen recently is going to change their belief. The question is well how would the financial reform be able to release more capital, given the same monetary supply. One of the specific examples is the trust companies and the wealth management products. Even though we have not seen increases in M2, the broadest monetary supply. We actually have seen a lot of money creations being transferred from the saving deposits into investment projects. So that I think is what people should pay more attention to whether we would see a great deal of the monetary supply not from the central bank but from the shadow banking.

Host: Professor, your thoughts on the productivity?

Zhu Ning: I totally agree with Einar. I think, I mean, productivity is the eventual driver of economic growth. So, we are having some of the economic growth coming from investment and that has its own side effects or consequences, but then I think the two economics growth is going back to how to improve the productivity of your labor forces and how the make your entire economy working more efficiently, how to better integrate the different types of recourses, human labor, capital and land.

Host: Absolutely, a great discussion gentlemen. Einar, you are going to leave us on the current affairs coming here later. Thank you, Professor, and stay with us, we are going to talk with you just in a short.

Host: Professor, so when we talk about these rural land reforms and local governance reforms, what do you think we are talking about. We know that it is going to be land usage right transforms that we’ve already known. What else can we expect?

Zhu Ning: I think we would also be able to expect a few changes. One is, I think, how would we integrate the urbanization with the farmlands. One is, I mean, people have talked about what is the next stage of urbanization. Is, Does it mean that we will have to build more cities or build more high-rise buildings, but then, I think, to have been some characterizations about how to make the rural residents to enjoy the life style of urban life style. I think that would create a lot of opportunities. Another thing is, I think, it has such a tongue, how to improve the welfare of farmers, part of that is how to provide better social security and health care systems to people who live in the countryside, because we know that we have been trying to use consumption as a major driver for the next, economic growth in the next decades. And one of the drivers comes from how would the government be able to motivate the people to spend money. And for that, farmers, they don’t have, if they don’t have the necessary social security or health care, then, they maybe hesitate about spending money; but if you do provide such safety edge and welfare programs, you will see them be more willing to spend and this would stimulate their consumptions.

Host: So it’s about closing the welfare gap and the income gap between the urban and the rural areas. And we do have about six hundred million people in the rural areas. So if they spend right, they are going to be the key cause of the consumption drive. I want to throw a number at you, Professor, because food security is also going to be an important part in this No.1 central document. Qinghua has estimated that there are a hundred thirty five million hectares of available land inside China right now. If we take out the land such as for the current radiation, for past radiation and we take out the available land that could be polluted right now, it is getter very very close to this sort of, which we called the “red line” of China’s available land which is about one hundred thirty five million hectares. Do we have a food security issue here in China, because we are getting very close to that “red line”.

Zhu Ning: Well, I think we probably do. I mean there are two ways one can look at it. I mean, if just to keep the minimal level of security, I think we are probably fine. But then if you think about it. I mean, you could have some, given the worse changing in the weather, given the global warming issues, I mean, we could have something, we have no forecast before, so you have to leave yourself some margins for errors. I mean, for that matter, I think we should keep a close eye on the food security. I think, for that, I am really hoping for that, given that, China is paying more and more attention to the environmental issues, hopefully we could recline some of the farmland which is not being polluted then which hopefully can be reutilized in the future after some treatments in the polluted areas.

Host: Well, that is going to be a major challenge as you know, Professor Zhu, for policy makers because in China we need the balance between urbanization, right and available land. Chinese guides are changing and of course getting the plead is hard. So this is going to be a big issue. Professor Zhu Ning, thank you very much for your insights tonight, Professor Zhu Ning from the Shanghai advanced institute of finance joining us in the program tonight.