Chinese economic miracle: braking due to external factors
The press went around the data borrowed from the latest report of the State Statistical Office of China. The Chinese could not please themselves with anything special. The report notes GDP growth, says about the stability of economic development, but the figures show that China’s GDP in the first half of 2013 was the lowest since 1999. Experts predict the Middle Kingdom is not only a recession following the crisis in Western countries, but also the end of the era of cheap labor in the next ten years, which will further affect the Chinese economy.As pointed out Elena Mishina ("Russian newspaper"), China's GDP in the first half of 2013 of the year grew by 7,6%, amounting to 4,04 of a trillion dollars. In the first quarter of 2013, GDP grew by 7,7%, in the second quarter - by 7,5%. This is the lowest figure when counting from the 1999 of the year. Data taken from the report of the State Statistical Office of China.
The report was commented by a representative of the statistical office, Sheng Laiyun: “In the first half of the year, the Chinese economy was developing overall stable. The government has focused its efforts on improving the qualitative characteristics of economic growth and active financial and monetary policy. ”
The decrease in growth rates is due to recession and other crisis phenomena in the global economy. However, it is at least premature to see a “crisis” in China. Those analysts found on the Internet who are talking almost about the recession of the Chinese economy, simply wishful thinking. By the way, GDP growth in the first half of 2013 can be compared with the dynamics of last year.
As transmits correspondent ITAR-TASS Alexey Selishchev, China's GDP for the first half of the year 2013 of the year by 7,6% exceeded the figure of the same period of the year 2012. This is also stated in the report of the State Statistical Office of China. Therefore, it is premature not only to talk about the crisis, but also to declare a “slowdown”, which is also widely written on the Web.
For the first six months of 2013, value added products in the agricultural sector of the PRC amounted to 1 trillion. 862,2 billion yuan (3% higher compared to the same period last year), said Yuri Levykin (Utro.ru). In industry, this figure was 11 trillion. 703,7 billion yuan (an increase of 7,6%); in the services industry - 11 trillion 235 billion yuan (increase in 8,3%). China continues to develop in the framework of the industrial economic model.
The latest economic data is very sympathetic to the world markets: there was an increase in stock indices. There is no cause for concern: thanks to the competent actions of the Chinese leadership, the observed decline in growth rates is proceeding smoothly.
Financial analysts see the main reason for the Chinese “smooth” decline in external factors - that is, those that dictate demand. After all, the Chinese economy is largely focused on the world market.
Anna Bodrova (Investkafe) writes that the environment of China is not ready to buy in the volumes in which the Celestial is ready to sell. It is difficult for the Chinese economy to keep the rates taken earlier (growth in pre-crisis time by 14-15% annually).
In essence, the analyst believes, the Chinese government "signs off on its own impotence." Without activating external demand, the locomotive cannot be re-launched.
“... In theory, it is necessary to make sure that the Chinese economy has become a kind of independent system that can switch quickly depending on which side the support is currently active and sufficient for. It is necessary to abandon such a strong binding to the indicators of the heavy industry sector and remove dependence on the real estate segment. In general, a certain ideal economic structure emerges, to which Beijing aspires, but so far is only at the first step of the long ladder. ”
According to the professor of the Russian Academy of National Economy and Public Administration under the President of the Russian Federation, Andrey Zuev, the era of cheap labor in China is coming to an end. The professor spoke about this at the International Forum of Megapolises, held in Beijing by the International Alliance for Development and Public Policy, writes Yury Levykin (Utro.ru).
According to Comrade Zuev, cheap labor in China will disappear. It will happen in the next ten years. China will have to face a choice that now faces Russia, to borrow labor resources abroad. Alternatively, the PRC may change the economic structure in favor of new progressive models.
The author of the article reminds that the Chinese authorities are aware of the existence of such a problem. During the last congress of the CPC, it was also about changing the economic model. In the near future, China itself will begin to export production to countries with low labor costs — to countries in Africa and Central Asia.
As for the components of Chinese economic success, they were identified by Alexey Kiva, doctor historical Sci., Chief Researcher of the Institute of Oriental Studies of the Russian Academy of Sciences, political scientist. In material posted on "Centuries", he calls the eight factors of rapid dew of the Middle Kingdom.
Noting that over the course of thirty years, China’s GDP increased annually by 9,8% (eventually increased 15 times), foreign trade increased by 125 times, and in terms of its volume China ranked first in the world, overtaking Japan and Germany, the author points out that China during this time actually changed places with Russia. This is clearly seen in the nature of the foreign trade of the two states.
“... Back in 1990, most of our exports to China were machinery and equipment, now raw materials. As for military equipment and power units for nuclear power plants, then, judging by the trend, China will soon abandon them. But perhaps the Russian's pride may hurt the following fact most of all. We built the first car factory in China in Chongchin with a full production cycle at the beginning of 1950's. He produced ZIS-150, GAZ-51, GAZ-69. By the beginning of the reforms in China, 149 thousand vehicles were produced per year. And now this plant is called the country's first car factory (China First Automobile Group Corporation - FAW), produces about 2 million cars a year, exports them to other countries and builds its enterprises in Russia. Enterprises and other Chinese factories are being built in Russia. In total, 2012 has produced a million cars in China in 19,3 year. Probably, few people know that China can offer us the most modern equipment, but everyone surely knows that Chinese high-tech household goods are crammed with shelves of Russian stores. ”
The following political scientist highlights the factors of Chinese growth.
Factor №1. Building socialism with Chinese characteristics, announced by Deng Xiaoping. Its intermediate goal is the creation of a society of average prosperity (“xiaokang”). It is a society in which every Chinese will have a minimum set of vital benefits: work, housing, education, medical care, etc. On the road to a brighter future, 50-100 years can go. Such a distant time not only inspired the people with the idea, but also allowed the authorities to “fill the concept of“ socialism with Chinese characteristics ”with quite bourgeois content, which is done in practice,” the author notes, further distracting himself against the Chinese socialist way of opposing the Russian reforms to Gaidar (building capitalism, which meant for the masses of Russians, the road was not forward, like the Chinese, but back).
Factor №2. The model of socio-economic reforms was created taking into account world experience and local realities, therefore it turned out to be one of the most successful ever implemented in countries in transition, the analyst notes. (The Russian Gaidar team imposed a foreign model - the American one).
Factor №3. The rapid development of China helped the West, especially the United States. Deng Xiaoping took into account the fact that Western corporations are interested in the Chinese market, as well as in high profits due to cost savings. The capital of Chinese overseas communities (“huaqiao”) and then international corporations flowed into free economic zones in the PRC. But to some estimates, over thirty years, China has attracted 700 billion dollars through the FEZ. This outstanding figure is also explained by the sufficient efficiency of the judicial and executive systems, which are components of a favorable investment climate:
“... Vladimir Neveykin, who left for the Middle Kingdom to improve the Chinese language, but an Orientalist who had become a successful businessman there, writes:“ In China, any criminal encroachment on the property of a legal entrepreneur is considered a grave state crime. And any slowdown in the police’s response to this is regarded as a direct complicity to the gravest crime. ” “If you,” he says, “someone came, for example, from the fire service, sanitary and epidemiological supervision (all these bodies are present in the PRC) and issued an order that resulted in stopping production, disrupting supplies to customers, and then it turned out that the actions of the official were unlawful, the state will reimburse you for the full damage from these actions of its official, and then collects these expenses from his family ... All this applies, including customs. ” We would have such orders! ”
Factor №4. A high proportion of savings is up to 49% relative to GDP (several times more than in Russia). This is achieved by saving money: a modest payment of officials, the lack of "exorbitant income" from the management of state corporations. In China, there were neither financial pyramids, nor confiscations of money from citizens. In addition, in the PRC, unlimited import of foreign currency is welcomed, but export is limited. The process is strictly controlled by banks and customs. The flight of capital invested in China is excluded, the analyst writes. With the "gray schemes" of the withdrawal of capital from the country in China, "they are cracking down ruthlessly."
Factor №5. The West believed that China would remain an “assembly factory.” However, already in the first years of the reforms, the foundations of the two largest innovation and production centers were laid - Shenzhen in southern China and Zhgongguancun in and around Beijing. Western universities, primarily in the United States, received education from 1,5 to 2 million Chinese. Thanks to investing in the development of science in the Middle Kingdom, 14 world-class universities appeared.
Factor №6. Beijing has turned the WTO accession in its favor. He prepared for this for a long time, increasing his export potential. Chinese goods have captured the world market.
Factor №7. China's development has also been facilitated by foreign policy. The analyst believes that Deng Xiaoping rejected the expansionist foreign policy of Mao Zedong. And only Xi Jinping made the world understand that China intends to play a more important role in international relations.
Factor №8. The rational defense policy of Beijing, which, according to a political scientist, "does not compete with other nuclear countries in armaments, but is guided by the principle of sufficiency".
Thus, the factors that at one time strengthened China may today be the conditions for its destabilization. China's expansion is growing along with its appetites - examples of this are conflicts with Japan and other states over island territories. The cost of labor in China is growing with the development of the economy. At the same time, China’s dependence on foreign markets is increasing, since the Celestial Empire, thanks to reforms, has become an export-dependent country with low domestic demand. The recession in Europe and the United States is now turning into a slump in growth in China, and the creation of a powerful middle class with hundreds of millions of the present poor of the Celestial Empire is very, very far away.
At the same time, those analysts are wrong that they are predicting to the PRC a quick economic demise. By changing its foreign policy and expanding its industrial expansion, China is rapidly developing in Africa and is becoming stronger in the countries of Central Asia, where parts of the territory are already splitting off from Tajikistan - for the debt of the Middle Kingdom ...
Observed and commented on Oleg Chuvakin
- especially for topwar.ru
- especially for topwar.ru
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