Innovation’s Limited Impact
Feb 18-2019
China should get used to low-speed economic growth, said NSD Dean and Professor Yao Yang in his speech at the annual meeting of Chinese Economists 50 Forum on February 16th. The Forum is an organization of top Chinese economists. Prof. Yao said China has bid farewell to export-driven economic expansion and the peak of industrialization. De-industrialization has begun and the service sector has taken over as the main growth engine while demographic dividend is subsiding. The silver lining of de-industrialization include labor’s rising share in income distribution, the increase of domestic consumption ratio and the decrease of saving ratio. What will the growth rate of the Chinese economy look like in the future? Prof Yao said that Japan could be a good reference. From 1973 to 1993, Japan accounted for almost all of the innovations in the world, but its growth rate was shy of 3%. “We keep saying that innovation will enhance our economic growth rate; yet in fact it cannot,” said Prof. Yao.
