Prof. Yao Yang: Understanding Chinese-Style Modernization
Nov 06-2022
Interviewed by China Entrepreneur magazine, Prof. Yao Yang commented on some key aspects of the report of the 20th CCP National Congress and said he was most impressed by its emphasis on development. He also highlighted some parts of the report that are bound to have far-reaching impacts. He’s Dean of the NSD and Interim Dean of BiMBA.
He fully agrees with the central message that development remains the foremost task as it’s indispensable for the great rejuvenation of the Chinese nation. For it to double from 2020 to 2035, the per capita income needs to increase by no less than 4.8% annually, which is not an easy task and underlines the importance of development, said Prof. Yao.
The report also provides a framework and direction for understanding and realizing Chinese-style modernization. The idiosyncrasy of China’s modernization lies in its outstanding traditional cultures, e.g., meritocracy, pragmatism and even the market. In North Song Dynasty, China saw the birth of the market economy and the invention of financial, several hundred years ahead of Western Europe. At the same time, China’s modernization drive is connected with that of the world and will continue to contribute to human civilization, said Prof. Yao.
He also clarified some expressions and terms in the report. The focus on developing the real economy doesn’t mean that other industries like finance or the virtual economy should be neglected. As for the term ‘high-growth development’, he argued it could be misleading as people might only equate it with high tech. A better term could be ‘innovate through technology and upgrade industries’ since any industry, including food and clothes, can be upgraded along value chains.
Regarding the economic prospects, Prof. Yao had full confidence in the fundamentals of the Chinese economy and believed that proper adjustments have been made over the last decade. Potential growth rate will stay at around 5.5% for some time to come, given the country’s 45% savings rate. The risks, though, might stem from wavering policies that are rolled out without sound research and judgement. A case in point was the ones concerning de-leveraging and asset management, which caused shocks to the market. Stable, precise and efficient policies are what’s needed to ensure good economic performance, said Prof. Yao.
