These are notes from a talk given by Liu Xiaoming, Chinese ambassador to the UK at the Marshall Society economics conference in Cambridge in January 2014.
China is now more focused on balanced regional development - greater emphasis on development programme in Western provinces and regions - more than 40% of transfer payments from central government now diverted to these areas
Excellent article here from the FT on shifts in regional investment, costs, growth
Delta Blues (Financial Times, January 2014)
Increasing development capacity of regional development
Investment in micro credit and expansion of small enterprises
Aid/financial assistance from China to more than 120 countries
China and the Lewis Turning Point
In the process of development, there is a point when excess labour in the subsistence sector is fully absorbed into the modern sector of the economy. At which point, after extra capital investment to drive growth higher, labour shortages drive up wages and unit labour costs. Will this erode China's comparative advantage in manufacturing?
Inequality in China
China's Gini coefficient has been between 0.47 and 0.49 in recent years - China recognises the dangers that can arise from a high and growing gap between rich and poor . Recent evidence suggests a small fall in income inequality in China: Read: http://www.shanghaidaily.com/Business/economy/Chin...
China needs to find the right balance between development and distribution, between markets and efficiency
Investment in renewables - see David Shukman (BBC(
China on world's biggest push for wind power: http://www.bbc.co.uk/news/science-environment-2562...
Rapid expansion of local carbon trading schemes (a key part of the 3rd five year plan)
See this article from Reuters: http://www.reuters.com/article/2014/01/21/china-ca...
Middle Income Trap
Suggestions for further reading
Coverage here of the Shanghai free trade zone: http://www.bbc.co.uk/news/business-25774227
The BBC's Linda Yueh has a good feature on the changing nature of Chinese economic growth
"The Chinese government is attempting to persuade markets and others that it is slowing the economy down to a more sustainable pace and trying to be less reliant on investment-led, credit-fuelled growth."
More here: http://www.bbc.co.uk/news/business-25807357
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