OPINION> You Nuo
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OPINION> You Nuo
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Window of opportunity in crisis
By You Nuo (China Daily)
Updated: 2009-04-27 07:42
It is too early to claim victory over the economic crisis, as political and economic leaders are doing in the world to raise public confidence. At best, things have stabilized somewhat. There are still some discouraging statistics around. And there will be many great challenges lying ahead, as some of the so-called green shoots perhaps get a chance to grow. People cannot afford the luxury of imagining that if we keep going like this, the economy will begin to pick up, and once it does, it will be following the same old pattern as in the years leading to the crisis. China cannot expect to export its way out of the crisis just because in some sectors, there is a growth in demand for some merchandise. It cannot expect to keep up so much industrial capacity (such as the capacity to produce 600 million tons of steel a year) just because Beijing's stimulus policies are temporarily holding up the demand. Nor can it expect to relocate its redundant rural labor entirely to the manufacturing sector. No matter how globalization develops, the world cannot keep generating demand for the work of half of China's population in the factories. Equally important, there simply are not enough resources - from raw materials to clean water and air - for building China into an ever-enlarging manufacturing power. These are not "long-run issues" that people may leave for their grandchildren to find a solution.
In the next couple of years, China will be forced to make as serious an effort as the United States will to change the structure of its huge economy - even though ordinary Chinese people tend to think they have nothing to do with the complicated business on the Wall Street (all the problems were caused by the greedy Western bankers), and that they had, in fact, a very short period (no more than 30 years) for enjoying their present economic model that is now called old and unsustainable. That points to the difficult nature of the structural change to come. In world history, perhaps no big country has ever managed to change its overall economic model twice in 30 or so years. China first managed, starting from 1978, to break away from the former Soviet model of planned economy and to open up to global business opportunities. Now it is its turn, while keeping up its global network, to generate more growth by improving the lives of its own people (including improved energy efficiency and environmental protection). Without a structural change like this, this economy is not going to see the kind of rapid growth it has experienced since the 1980s. There will be some exports. There will be some jobs for export-oriented manufacturing. There will be some cities with high rental rates and flashy downtown streets. There will be some rich individuals. But the economy won't get strengthened in overall terms. There won't be enough new jobs. There won't be many cities flourishing on its unique characteristics. There won't be a large and ever-enlarging middle class ready to participate in society's progress in responsible ways. The momentary stabilization of the crisis is only a small window of opportunity. Indeed, if no specific economic restructuring program is launched in the second half of 2009 to follow up the 4-trillion-yuan stimulus package that Beijing rolled out in November 2008, the business data in 2010 may cause worries again. A less painful way of economic restructuring is to restructure while expanding, instead of to restructure while contracting. The next stage of economic expansion, to be boosted with government fiscal support, should be more focused on the business activities conducive to China's sustainable development. E-mail: younuo@chinadaily.com.cn (China Daily 04/27/2009 page4) |
