1 / 18

Chinese Macroeconomic Survey and Globalization

Chinese Macroeconomic Survey and Globalization. Relations between politics and economy The great ideological cycle Integration into global economy Challenge from global economy Adapting to new circumstances in domestic market. Politic s and Economy.

Download Presentation

Chinese Macroeconomic Survey and Globalization

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Chinese Macroeconomic Survey and Globalization • Relations between politics and economy • The great ideological cycle • Integration into global economy • Challenge from global economy • Adapting to new circumstances in domestic market

  2. Politicsand Economy • Adapting economic development to political needs • Competing groups in the leadership cause changes in economic policy • Political influence on economy results in economic cycles • The trend of ideologization drifts economy away from realistic frames

  3. The Great Ideological Cycle • Postwar development starts on a very solid economic ground • Under the pressure of ideology the development follows political cycles • Economic system moves into ever more unrealistic spheres • Ideological cycle comes to culmination in Pi Lin pi Kong campaign in 1974 • Reforms cause the decline of ideological cycle

  4. The End of Ideological Cycle • With reforms political cycles started to follow the dynamics of economy • After ideological pressure reached the limit of tolerance both started to decline • The ideological influence disappeared in mid 90-ties when Chinese economy became normal • Ideological cycle ended with economy back in realistic frames

  5. Integration into global economy • Member of World Bank • Member of International Monetary Fond • Member of WTO since 2001 • World biggest exporting country • China’s purchases of crude oil and raw materials influence world prices • Growing importance of China as investor in Africa and Latin America

  6. Results of Reform Policy • Three decades growth rate more than 9% per year • Growing regional differences between coastal regions and inland China • Growing social differences: GINI index: 48 • Growing pressure on ecosystems, energy, and raw material resources • Big migrant workers’ population: 211 million

  7. China’s Position in World Economy • World’s second largest economy • For the last 3 decades world fastest growing economy • World’s largest market with biggest potential for expansion over next 20 years • World’s largest exporter: 9% of world export • World’s biggest foreign currency reserves: $3.236 trillion on 31stDecember 2011

  8. Advantages of large system • Relies on enormous domestic market • More self-sufficient then small system • Less dependent on foreign trade and less vulnerable to foreign influences • Greater inertia of the system • More opportunities for investment • More possibilities for protection • Can concentrate more resources to achieve strategic purposes

  9. Challenge from global economy • From mid 90ties on Chinese development is increasingly determined by global situation • Affected by Asian financial crisis in 1997 • Adapting to the world monetary system • Growing dependence on the conditions of world markets • Adapting to the global financial system

  10. The Challenge of the World Financial Crisis • The concept of neo-liberalism in global economy proved to be insufficient • Lack of global economic coordination and financial control • China was less affected by the crisis then most other countries • China maintained more than 8% GDP growth • Because of financial protection China was not affected by financial crisis • China was affected mainly by shrinking foreign markets

  11. China in Times of the World Financial Crisis • China increased domestic spending mainly by new investment in infrastructure • Many foreign owned export oriented production lines closed down • Some 25 million migrant workers lost jobs and returned to their homes in villages • When economic situation improved many of migrant workers didn’t want to return, because of new opportunities near home • For the first time China is experiencing lack of cheap labour

  12. GDP Production structure 2011

  13. GDP Consumption Structure

  14. Problems of domestic market • Problems of overheated economy • Problems of poluted environment • Extremely high proportion of investment: over 40% since 2003, 46,2% in 2010, and 54.2% in 2011 • Growing problem of inflation • Problems of uncontrolled local borrowings • High tensions in house construction • The pending real estate bubble

  15. Requirements for future growth • Greater importance to the growth of domestic demand • Continuing the process of urbanisation • Adjusting of investment policy and consolidation of real estate market • Introduction of social security system for all social groups • Smaller social differences by increasing the income of workers • Creating wider middle class

  16. Adjustments to the changing global markets • China should play a stronger role in world monetary system • Growing importance of Asian,African, and Latin American markets. • Labor intensive production will become less competitive • China will have to change the structure of its export industries • Chinabecoming stronger foreign investor

  17. The Concept of Greater China • China economically integrated with Taiwan, Hong Kong, Macao, and partly Singapore • P.R. China and Taiwan signed Economic Cooperation Framework Agreement ECFA in June 2010 • The Greater China totals16% of world export and $3.757 trillion of foreign currency reserves on 31st December 2010

  18. Faster Economic Integration in East Asia • Creation of Common market in Southeast Asia basing on ASEAN • Further integration of Mainland China, Taiwan, and Hong Kong economies • Free trade agreements – Taiwan entering via China • Faster integration into broader regional economic zone: ASEAN+3

More Related