On March 16th, 2014, the Peking University National School of Development (NSD) organized a conference at the Yingjie Exchange Center for the review of the National People's Congress and the Chinese Political Consultative Conference( NPC& CPPCC) meetings. Scholars, students and alumni were invited to discuss key issues concerning China’s economic development and reforms. The first half of the conference was hosted by Professor Huang Yiping, Deputy Dean of NSD.
Professor Justin Lin Yifu, Honorary Dean of NSD, delivered his address first which focused on GDP growth targets, a top concern among the public. Professor Lin argued that the goal of 7.5% GDP growth in 2014 is necessary and achievable. China is currently undergoing a deepening of reform while maintaining its moderate growth rate. Future development will continue to rely on investment that should be directed towards industrial upgrades and civil projects. At the same time, Professor Lin put forward his suggestion that the People’s Bank of China should empower local governments to issue bonds. This move will allow local governments to borrow from a commercial bank instead of a shadow bank. Furthermore, it will also promote the market-oriented reform of interest rates.
Director of the Center for Population and Labour Economics at the Chinese Academy of Social Sciences, Professor Cai Fang, then analysed China’s future economic growth from the perspective of labour growth. Professor Cai emphasized that the shrink of the “population dividend” and the onset of an ageing population are possible challenges to China’s economic growth. To tackle this problem, China should explore ways to improve overall productivity. At the same time, as China upgrades its industry, she will face a skills glut as the lowly educated labour market will not have the necessary skill set to fulfil the markets’ demand. Thus, the average length of education for the workforce will need to increase.
Next, Professor Li Ling from NSD delivered her report, which focused on the building of long term infrastructure and medical reform. Her view was that in order to simplify the government’s role, a well-maintained mechanism will have to be put in place. As an expert in medical reform, Professor Li Ling also raised the issue that medical reform should be built upon the improvement of the management mechanism. China will need to address the overreliance on medication, equipment and check-ups to sustain the medical field. In addition, China should also use case studies of successful medical reforms to serve as guidance.
Professor Jia Qingguo, Dean of the School of International Studies, then took the stage to analyse the diplomatic aspect of the meetings. Professor Jia noted that a relatively stable global environment is the reason why China is able to reap the benefits of 30 years of reform and opening up.For further reforms, China will need to rely on a more peaceful and stable global environment. The focus for China should be still on reform and the transition from a centralized economy to a market-orientated economy. If China wants to become an important global power, it should be more forward-looking in its foreign policy.
The issue of financial transactions on the Internet was brought up by Associate Professor Xu Jianguo from NSD. He did a special topic reviewing the background, status quo and future trend of online financial transactions. Professor Xu believes that the upsurge of online financial transactions was due to the lack of supply provided by the financial sector and current regulations. The progress in marketing channels means that online financial industry will have a unique advantage and a bright future ahead. Un-satiated financing demand of small and medium sized enterprises will bring vigour the field. For its long term sustainability, Professor Xu argued for closer links between interest rates and exchange rates so as to achieve marketization of these rates.
This year, the conference invited an alumnus from the NSD’s EMBA programme, Mr. Liu Erhai, who served as the Managing Director of Legend Capital. Based on his wealth of experience in venture capital investment in China, Mr. Liu analysed China’s future development from the perspective of technological advancement. With difficulties in export and urban reforms in its nascent stages, raising the technological capabilities of its enterprises will be able to help drive China’s economic development. Mr. Liu shared a few successful cases of his company’s investment which provided a realistic example for participants to reflect upon China’s economic progress and the role that technology played in the process.
The last report was delivered by Professor Song Guoqing from the NSD. He provided his own forecast on the overall growth of the Chinese economy in 2014. He pointed out that based on current statistics; market expectation of the real GDP growth rate may be lower than the target that has been set. Based on his observation, China’s potential for growth in the coming decade is declining. With regards to the issue of investment, while Professor Song did not deny the existence of housing bubble, he hopes to remind the investors of the possibility of a negative bubble. With a lower economic growth rate, it is important to look into raising the efficiency of investment.
Since its formation, NSD has placed strong emphasis on the analysis of China’s development. It has organized annual review sessions following each year’s ‘Two Committee” meetings. NSD hopes that these sessions will allow it to play the role of a think tank so as to communicate ideas, interpret relevant policies and promote social development.
Written By: Heng Kang Wei
