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Prof. Zhao Bo: Industrial Transformation under New Development Pattern

May 03-2023   



In a recent business seminar organized by the Beijing Office of Hong Kong SAR Government and Hong Kong Chamber of Commerce in China, Prof. Zhao Bo of the NSD delivered a keynote speech on industrial transformation under the new development pattern.

 

China will be passing through a high-quality development stage in the decades to come, a salient feature of which is considerably lower economic growth rate at around 3-6% annually, he noted. Even so, it is highly likely that the country will enter the ranks of high-income nations in the next two to three years, a historic feat that will mark enormous progress of humankind and bring tremendous impact on the world order, said Prof. Zhao.

 

Given regional gaps, China will have to surmount such challenges as how to achieve coordinated development among its regions and ensure common prosperity on its development path. Part of the solution lies in industrial transformation, said Prof. Zhao, adding that China can learn from the successful transition of some large countries, whose common features include high saving rate and investment rate, high-level industrialization, high-degree openness in international trade, and discipline in fiscal and monetary policies.

 

Prof. Zhao then expounded on the upgrading of industry and manufacturing. The significance of manufacturing lies in its strong externality, long value chains, high tradability, and fast all-factor productivity growth rate. To further spur the manufacturing sector, he proposed loosening the financing constraints for private firms, which have been at a considerable disadvantage borrowing from state-owned banks. Over the long-term, he advocated for wider opening of the financial industry and more participation of foreign capital in the new development pattern. He also argued for the important role of the government in setting industrial policy and improving infrastructure investment efficiency. Furthermore, he believed that a more open dual circulation should be constructed. Import and export account for 20% of China’s annual GDP; however, an open market, he said, contributes far more than what the figure might say on paper due to its outsize positive impact on added value. Lastly, he suggested that more openness should be granted to the producer service sector, whose development complements that of manufacturing.

Prof. Zhao Bo: Industrial Transformation under New Development Pattern

May 03-2023   



In a recent business seminar organized by the Beijing Office of Hong Kong SAR Government and Hong Kong Chamber of Commerce in China, Prof. Zhao Bo of the NSD delivered a keynote speech on industrial transformation under the new development pattern.

 

China will be passing through a high-quality development stage in the decades to come, a salient feature of which is considerably lower economic growth rate at around 3-6% annually, he noted. Even so, it is highly likely that the country will enter the ranks of high-income nations in the next two to three years, a historic feat that will mark enormous progress of humankind and bring tremendous impact on the world order, said Prof. Zhao.

 

Given regional gaps, China will have to surmount such challenges as how to achieve coordinated development among its regions and ensure common prosperity on its development path. Part of the solution lies in industrial transformation, said Prof. Zhao, adding that China can learn from the successful transition of some large countries, whose common features include high saving rate and investment rate, high-level industrialization, high-degree openness in international trade, and discipline in fiscal and monetary policies.

 

Prof. Zhao then expounded on the upgrading of industry and manufacturing. The significance of manufacturing lies in its strong externality, long value chains, high tradability, and fast all-factor productivity growth rate. To further spur the manufacturing sector, he proposed loosening the financing constraints for private firms, which have been at a considerable disadvantage borrowing from state-owned banks. Over the long-term, he advocated for wider opening of the financial industry and more participation of foreign capital in the new development pattern. He also argued for the important role of the government in setting industrial policy and improving infrastructure investment efficiency. Furthermore, he believed that a more open dual circulation should be constructed. Import and export account for 20% of China’s annual GDP; however, an open market, he said, contributes far more than what the figure might say on paper due to its outsize positive impact on added value. Lastly, he suggested that more openness should be granted to the producer service sector, whose development complements that of manufacturing.