A Discussion with Students at Leiden University and Rotterdam’s School of Management
Over the past years, discussions about China’s role in world have shifted from whether or not China would become an economic power, to the kind of power the PRC might turn out to be. Consecutive rounds of economic reforms have made China the second largest economy in the world and a major motor of regional and global economic growth. This success story has left an impression in countries that are currently experiencing economic down-turns. As a recent global opinion survey showed, a significant amount of people around the world erroneously believe that China has already surpassed the US as the world’s strongest economy. Following the debt crisis in the US and the financial crisis in the EU, expectations have been high that Chinese economic growth will carry the world economy, and that Chinese state investments might come to the rescue of ailing European and American markets – despite explicit statements from the Chinese authorities to the contrary.
Meanwhile, the Chinese government has taken steps to move away from its export-led economic growth model. It has tried to expand domestic consumption and cool its economy following the massive government spending that had assured growth in the wake of the world financial crisis. In 2011, the authorities unveiled their 12th Five-Year Plan, which means to keep GDP growth at seven percent, promises sustainable development, promotes an urban service-industry, and aims to improve innovation and social welfare. In November of this year, the Chinese Communist Party outlined a new set of economic reforms at its Third Plenum, which among other things focus on further liberalizing China’s state-owned enterprises, allowing more room for market economics, further involving the rural areas in China’s economic growth, and improving environmental protection.
In our previous discussions, we have covered specific areas of China’s economic development, ranging from issues in the financial markets and in international trade to questions about demographic developments, innovation, and environmental protection in the PRC. This week, in our final debate of the year, we will take stock of China’s current economic policies, and will discuss how the PRC’s development strategy affects the East Asian region and the world economy as a whole. How well is the Chinese government equipped to deliver on the promises of the Third Plenum and fulfil the targets of its current five-year plan? Are the authorities on the right track to address China’s enormous domestic challenges and turn the PRC into a high-income country, or is the country faced with too many trade-offs that simply cannot be overcome in the short term? Are the high expectations regarding China’s positive economic role in the world warranted? Share your views and ideas with us in the comments section below.
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