China Confronts Turning Period

China Confronts Turning Period

If China is to continue its remarkable economic growth it will need to adapt nimbly to huge internal and external changes, according to experts from The Australian National University.

Dr Jane Golley will co-host the nation’s largest gathering of world-leading China experts, the 2010 China Update, at ANU this Wednesday.

Dr Golley said: “The economic transformation that has taken place in China since the late 1970s is now regarded as one of the most significant changes in human history.

“Over the last three decades China has transformed itself from a centrally-planned closed economy to a market-oriented open economy, sustaining an annual growth rate of 10 per cent and developing into one of the most powerful economies in the world.”

However, Dr Golley notes that there is evidence to suggest China has entered a ‘turning period’ in economic development – signalled by the end of surplus labour and wage rises.

“The combined impact of 30 years of the One Child Policy and rapid income growth on Chinese fertility rates means that the growth rate of labour supply in China is predicted to turn negative by 2020,” said Dr Golley.

“This will necessitate shifts in China’s industrial structure and composition of trade, as China loses its comparative advantage in the labour-intensive exports that have been the engine of growth in the past.

“The next two decades of reform and development are likely to be more challenging than the past, as China embraces a new mode of economic growth driven not only by efficiency, but also sustainable and equitable considerations.”

Dr Golley says that China will most likely become the world’s largest economy by any measure by 2030 and its new position as a global economic powerhouse will bring heavy responsibilities in global affairs.

“High on China’s agenda will be rebalancing domestic growth and reducing global imbalances, pushing forward with multilateral trade negotiations under the WTO, confronting the challenges of climate change, and fighting global poverty,” she said.

What the next 20 years of Chinese economic reform and development will bring is the subject of the 2010 China Update, taking place at ANU tomorrow.

The world’s top China scholars will gather to examine whether China’s unprecedented growth will continue, and if so what it may mean for China, its population and the rest of the world.

Dr Golley is available for interviews today (Tuesday) until 3.30pm, and tomorrow (Wednesday) between 12.30pm and 1.30pm.

ENDS

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