Economics Research: Pivoting to China
Dec 12-2020
Prof. Justin Lin Yifu, Honorary Dean of the NSD, was presented with the 2020 Contemporary Economics Award by the 20th edition of the China Economics Annual Conference, recently held in Shenzhen. He was saluted for outstanding contribution to theoretical innovation and the flourishing of economic research. Three other Chinese economists were also awarded.
Prof. Lin is also dean of the Institute of New Structural Economics and the Institute of South-South Cooperation and Development at PKU. In his keynote speech at the conference, he shared his conviction – in fact a prediction he made in 1992 - that China will become the global center for economics research in the 21st century and many Chinese economists will come forward and become thought leaders.
The prediction seemed outlandish about 30 years ago but was soundly based on the relationship between the development history of economics and the nature of economic theory. The UK and the US have each taken their turn as the world’s economics research center simply because of their predominant economic heft in their time. Important phenomena – economic accomplishments in this case – accord importance to the theories and economists that offer capable explanations. The same is happening in China, where economic development has made for fertile soil for theoretical innovation in economics.
In 1994, Prof. Lin founded China Center for Economic Research at PKU (CCER, later renamed the National School of Development – NSD) with some other leading economists. Committed to the teaching of modern economics in China, they published a book titled The China Miracle which posited that the gradual dual-track reform adopted by China could maintain economic stability on one hand and galvanize comparative advantages on the other, thus leading to stable and rapid development. Two decades on, in 2014 China surpassed the US in economic volume based on purchasing power parity.
Only be researching China’s practical issues will the global economics research center shift to China and influential economists be born in China. But how to undertake such research to achieve theoretical innovation? Prof. Lin suggested paying special attention to two features of China: For one, China is at a different level of development from the developed countries. The differentiations are endogenous and range from industrial to financial and legal structures. For the other, being a country in transition, China is rife with distortions that come with a cost and are endogenous, too. By approaching from these two angles, opportunities abound for theoretical innovation, said Prof. Lin.
