Download China`s Imminent Accession to WTO

China’s Future Development and
Economic Relations with Asia
and Latin America
Justin Yifu Lin
Peking University and
Hong Kong University of Science &
Technology
China’s Growth Potential
• The current stage of China’s growth is about
that of Japan in 1960. Table 1.doc
GDP per Capita, 1950-1992
25000
20000
15000
10000
5000
0
1950
1955
1960
1965
1970
1975
1980
1985
Western Europe
Western Offshoots
Southern Europe
Eastern Europe
Latin America
Asia
Africa
1990
The FDI to Developing Countries
300000.00
Developing
countries
China
250000.00
Latin America
150000.00
Asia-
100000.00
50000.00
Year
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
-50000.00
1972
0.00
1970
Million
200000.00
Is China’s Labor Cost Low?
• China’s wage rate is about 1/50 of that
in U.S. and Japan
• Labor productivity is only 1/25 of U.S.
and 1/26 of Japan
• US wage level is only 1/3 higher than
China per dollar output
Share and Domestic Value Added
of Processed Exports
60
Share of
Processed
Product Export
50
40
30
20
10
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
0
Domestic Value
Added of
Processed
Manufactured
Export
China’s Trade Balance, 1980-2003
80
Total
60
40
20
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
0
-20
-40
-60
-80
-100
-120
-140
Asia Excl.
Hong Kong
Latin
America
North
America
Europe
Oceanic and
Pacific
Islands
Africa
China’s Trade Balances
• The pattern of China’s trade balance
changed around 1992.Table 3.doc
Sources of FDI to China
• The changes in trade pattern is related
to the relocation of labor-intensive
manufacturing industries from East
Asia to China through FDI. Table
4.doc
Concluding Remarks (1)
• China has the potential to maintain dynamic
growth in the coming decades
• To realize the growth potential, China needs to
complete the transition to market economy
• WTO accession will facilitate China’s transition to
market economy
• China will continue to attract large inflow of FDI.
However, the same will be true to other
developing countries.
Concluding Remarks (2)
• More than half of China’s exports is
processed manufacturing goods.
• The more is China export, the more China’s
import of intermediate products from Asia.
• The dynamic growth in GDP and trade will
increase China’s import of natural resources
from natural resources rich countries in Asia
Pacific and Latin American countries