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Overdrive
Ramping up its export juggernaut and taking full advantage of WTO entry, China’s economy in the first decade of the new millennium was “boom with no bust.” The information revolution fed more growth, as hundreds of millions of Chinese came online. But the Internet also became a forum for discontent, and the new leadership team of Hu Jintao and Wen Jiabao acknowledged growing environmental and social justice concerns with their call for a more harmonious society. Then, as the credit crisis in the US spread into a global economic crisis, China’s export-dependent growth appeared in jeopardy, and fears of a Chinese crash surfaced. But, as in 1998, China weathered the storm, and emerged in 2010 as the world’s largest exporter, largest foreign creditor, and fastest growing major economy, poised to soon surpass Japan and eventually eclipse the United States as the biggest economy on the planet. |
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China Needs to InnovatePeriod: Overdrive (2000s)
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Click to expand The first stage in China's economic development was its adopting openness. We believe that China chose the correct path for herself, this is to say that China needed to open up to the world. It provided more opportunities for Chinese people to transact freely, to do business. So, each person could give the world what they thought it needed based on their own understanding and hopes and China became the world's largest producer nation. You can say that "Made in China" also became the most important concept to people. All sorts of products, such as toys, other industrial products, were all provided by China. It was a period of catching up for China. There is a metaphor: It was like China was walking up from a valley. So actually China had a very large niche, so it was normal that China's development was booming. The second stage is the period from 1990s until today. The boom of this period relies to a large extent on the development of new technology. China's adoption of the internet provided a lot of opportunities for young people, in particular, our new generation, to create new ventures. Because they have these ventures, the youth is willing to try new things. They say, "Hey, I'm going to try to do this, I'm going to try to do that. If I fail, I still have other opportunities." This was a characteristic of the late 1990s. In reality, China wasn't just an economy based on manufacturing, but it turned into an economy that produced a lot of creations. While a lot of these creations are still just copy cats, this proves that the Chinese have learned how to learn. I think, in the first stage, we still hadn't learned how to learn from others yet, we mainly explored the world, but in the second stage, we started to learn. So, I think that the challenge of the next phase is very important. The challenge is how to innovate in China, to move away from just this concept of "Made in China." I think this is a huge challenge and this kind of economic development depends on how to increase societal diversity. People no longer tolerate the work unit control, government control, or internet restrictions that they have traditionally experienced. If people can trade freely, if they can interact freely, their focus is on, "How can I fairly take my opportunities and exercise my rights?" If they have these sorts of opportunities, I think China's economy will have a longer term booming potential. They can definitely, within 20 or 30 years, go from today's per capita income of $2,000 to a per capita income comparable to that of developed nations like $5,000, $8,000, $9,000 or more. They can truly realize a more fair distribution of wealth in the whole of society. I think this is the most important thing.
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