Justin Yifu Lin refutes 'bad mouthing' China's economy
Peking University, Mar. 7, 2014: China’s economic growth rate will sustain 7.5% to 8% in the next few years, asserted Justin Yifu Lin, former and honorary head of PKU’s National School of Development.
Lin shared his professional view with his colleagues on March 4–during the Chinese People's Political Consultative Conference (CPPCC), the country’s highest political advisory body. Last year, the legendary economist was appointed to its Standing Committee.
“Numerous claims have been made lately that China’s economy, mainly due to our ‘institutional flaws’, could hardly increase in continuance.”
Rather to Lin, the external factor is more of the culprit that has tied down China’s economy since the first quarter of 2010, considering the sluggish performances of developed markets (Japan, Europe and the US) over the same period.
Thus, Lin urged China to depend more on its domestic demand–he preferred investment to consumption, in particular. “Industrial upgrade, infrastructure improvement, environmental protection…so many opportunities are of high payoff.”
“Some voices are too alarmist on China’s local government debt ‘crisis’,” the advocate of investment was not that worried about the probable budget risk, “the local debt was still under control.”
Professor Lin hoped that by avoiding the “middle-income trap,” China would forge a new path to industrialization and modernization for Asia, South Africa and other developing countries.
This path is full of obstacles, Lin recognized.
“It’s time to change, and it’s time to be able to make a change,” he pointed out, “to deepen the reform, we must adopt market economic system instead of double-track system, and follow the laws of economy as well.”
The world’s largest urbanization process within the reform, Lin predicted, will continuously prop up China’s real estate industry. But he was also cautious about its bubble, which often intrigues financial crisis.
“As for the housing price, I cannot tell whether or when it will increase–or I would be richer than Bill Gates!” he joked.
Written by: Xiao Yunman
Edited by: Zhao Xiaowei