FT Chief Economist believes that how China resolves this trade dispute will determine whether China's rise can continue.Taking Argentina as an example, he warned the reversal of the national movement that was closed and the possible national movement.
FT chief economist Martin Bull; Martin Wolf recently talked in depth with FT Chinese website during his visit to China, sharing how his trade dispute over China and the United States, and how this great country game will affect China's developmentResearch and judgment of trajectory.The following is a record of editorial interviews.
FT Chinese website: China and the United States have released signals that are about to reach a trade agreement.What uncertainty do you think the last Linmen is facing?
Wolf: both China and the United States have the willingness to reach a strong agreement. This is very obvious. The key lies in the content of the agreement.According to what we learned before, the United States not only asked the Chinese economy to be more liberalized, but also put forward many other requirements, such as requiring China to abandon some of the rights of some WTOs and not to be revealed to the US's investment in the US sensitive technology department.In my opinion, this is an unequal treaty, which is difficult to accept China.To reach an agreement, the United States must give up some of the requirements.
Within the U.S. government, President Trump and his cabinet leaders have obvious differences in their positions.President Trump is more concerned about narrowing the trade deficit with China, while some of his subordinates have other tougher requirements for China.Can they unify their positions?Of course, President Trump said.So if China can convince him, this agreement is good enough for the United States, and the number of trade in China will become very beautiful, which may be enough to satisfy him.
Just like the North American Free Trade Agreement signed by the US Mexico -Canada Three Kingdoms, it is actually very beneficial to Canada, but as long as Trump feels good, he will sign it, and his supporters will not study the figures carefully, and he is not sincerely.Pay attention to issues such as intellectual property protection.
For Chinese negotiators, the tricky problem is that they cannot bypass Trump's men, and these men, such as trade negotiating representatives, Littichizer, should be much tough.Even at this level, the agreement may have to wait until the heads of state of the two countries have signed them in person.
So for ... Chairman, another risk is that Trump is an extremely unpredictable person. If there is a thing like the Hanoi Special Economy Mdash; mdash; he leaves without signing an agreement, and then ChinaIt will be a very big humiliation.Therefore, the current consultation, coordination and detail arrangements for negotiating officials on both sides are essential for the final signing of the agreement.
FT Chinese website: Many people in Chinese intellectuals hope that the United States will continue to put continuous pressure on China.They believe that the motivation of China's internal reform has been exhausted, so the pressure from the United States can promote further changes in China.Do they look forward to reality like this?
Wolf: I have recently heard many people expressing such desires in China.However, I think that President Trump is different from his predecessor. He is not interested in China's political system reform. He does not care about human rights and does not care about the democratic system. ThereforeAmerican government.
At the economic system, some reform requirements put forward by Americans, I think that the Chinese government should try its best to promote it because they are good for China.For example, tariff liberalization can improve the competitiveness of the Chinese economy; for example, the treatment of nationals of foreign -funded enterprises will not only improve foreign enterprises, but also improve the survival treatment of Chinese private enterprises;Local enterprises.Of course, Americans have some requirements, such as China does not engage in cyber spy to reduce the role of the Communist Party in enterprises.In these more difficult requirements, I don't know if China will make concessions in the end.
As for the reform of these economic system, whether it will ultimately guide the reform of the political system. This is a problem that Western has been very interested for many years and has become more pessimistic in recent years.I personally do not know this issue.On the one hand, China is a very unique ancient civilization.In the long history, it has always emphasized the unification and no tradition of democracy and freedom. This makes many people doubt whether it can really transform into a democratic country.
But on the other hand, looking at the surroundings of China, there are indeed many countries and regions that also pursue Confucian culture. After the economic development to a certain degree, it has achieved democratic transformation.I think it is certain that China's transformation process will not be a straight line, and it can even be said that at this moment, China is consciously deviating from this path.
But imagine that if the Chinese economy continues to grow, the level of urbanization continues to improve, and the people's education level continues to improve, then decades, such as the 2060s, can the Chinese government continue to rule the country like today?If it is really possible, I will be very surprised.In my opinion, China will eventually be closer to the West free democratic camp, but it is not as fast as the West has conceived.But it is also possible that China will become a huge special case.It is even possible that the West is going closer to China in turn, and this is what I don't want to see.
FT Chinese website: The rise of China and the extraordinary ability of China in trade are not new.But in the past one or two years, the Western world seems to be alert and is not so friendly to China.Why did Western feelings suddenly change?
Wolf: First of all, the West lost confidence in himself.Back to the intercourse of the century, the entire West, especially the United States, is still immersed in the so -called single -pole moment.We won the Cold War, and the democratic model seemed to be invincible.At that time, China's economy was relatively small, and it can be said that the US policy schedule was still backward.Then, the West began to be busy with counter -terrorism and other internal problems, and then the financial crisis occurred.
With the slowdown of economic growth and the stagnation of real income, the West has suffered a lot of self -confidence in its own system and technical advantages.In this process, Western politics began to appear populist, and more and more leaders who raised nationalism appeared. They looked around and said that China was becoming stronger and it weakened us.
China's rise is indeed not a new thing. It has happened for many years. In fact, the Chinese economy has slowed down in the past five or six years.But people's perceptions are always lagging behind reality, because ordinary people do not pay attention to economic news every day.But after accumulation, China is already very strong, and finally entered the consciousness of enough people. People influence each other, deepen each other's impression and the fear it brings.
In my opinion, four people in the West are particularly concerned about the rise of China.The first is workers. They think that China has snatched their rice bowls; the second is the business people. They think that China is increasingly unfriendly to invest in them. They have to face cyber spy, forced to transfer technology, earn in China, earn in China to earn in China.Money is becoming more and more difficult; the third is the national security department. They believe that China has risen into a real military country and has a strong maritime ambition.Care about things at the level of values and worry that China's democratic transformation has stalled.
These four groups have come together recently.People realize that China, which adheres to a completely different value system, formed a real all -round challenge to the world pattern in 500 years, and the grim of challenges far exceeds the Soviet Union of the year, because the Soviet Union is far inferior to today's economic strength than today than todayChina.Perhaps the last factor is added, which is an increasing sense of urgency.The West generally feels that if we are no longer right todayIn China, it would be impossible after 20 years, because China would be too strong at that time.All the above factors are superimposed, which has caused sharp changes in the West to China.
FT Chinese website: The United States and other Western countries have claimed that many of their requirements are to correct China's unfair practices in trade and investment.But these requirements have been interpreted by many Chinese as the West who don't want us to be strong, and even they don't want to let us live a good life.Where is the boundary between reasonable demands and irrational inhibitory development?
Wolf: I think that the West does hope that China's development will slow down, especially not that Chinese companies will become the power of the world in some important areas.This can be seen in the Huawei case.These are not the demands on the bright side during the war of trade in the West and China, but it is a secret demand.
There are many precedents for leading countries in history to try to prevent the latecomers from surpassing.A less known example is that Britain had worked very hard to prevent technology from transferring technology in the 19th century, but Americans still got British technology.Similarly, in the face of China this time, the West will not succeed.Chinese people can develop their own technology. China has not only huge domestic markets, but also enters many huge and rapidly growing emerging markets.Can the West successfully curb China's rise?cannot.But the West can increase the difficulty of China's rise and slow down this process.
FT Chinese website: Western fear of China is largely based on a hypothesis that China will continue to grow rapidly for two or three decades at the current speed, replacing the United States as the world's largest economy.But do you seem to be less optimistic about China's economic prospects?
Wolf: It is dangerous to predict the Chinese economy at any time, because there are too many variables.I think there are two extreme possibilities in China's economic prospects, and now it seems that they have the possibility of happening.
Extremely optimistic.China is still a relatively poor country with only 30%of Americans per capita GDP.You know, when the Japanese economy fell into stagnation in the 1990s, the per capita GDP of Japan had reached 80%of the United States. That is to say, it was relatively richer in Japan at that time.Based on the current low level, China should still have the potential to increase the level of wealth compared to the United States by two to three times.
Assuming that China has completed this process in the next 30 years, the annual economic increase required for each year is much lower than that of the past MDASH; MDash; we must know that 30 years from 1989, China's per capita wealth has increased by seven or eight times compared to the United States, so in the futureIt only increases by two or three times in 30 years. It should be a simpler task. It only takes about 4%to 5%of GDP growth each year.In addition, China's population growth has basically stagnated, which means that Per capita GDP will grow faster.
Of course, there will be many obstacles on the way, including whether the world market is still open to China, whether China ’s external exports can still grow rapidly, whether the political situation is stable, whether it can effectively use resources, and whether it can deal with state -owned enterprises and debt issues.However, China has performed well in management such issues in the past. If these obstacles can be overcome, it is a good extreme, that is, the economic continues to grow for a long time.
Look at the bad extreme.The Chinese economy has shown some signs of unsuccessful decline, including the degree of waste of investment, which is reflected in the rapid decline in capital returns, and the slowdown in the growth of full factor productivity that reflects the degree of economic innovation.In addition, the re -balance of the macroeconomic economy has not made much progress in the past ten years. The Chinese economy still relies heavily on investment instead of consumption, and debt levels have increased. These have been unsustainable in the long run.In history, many medium -income countries with great potential have stopped from such obstacles, and growth has since stagnated.
If the Chinese economy can increase for another 30 years, it will continue to increase for 70 years since 1978.Looking around the world, so far, there are only one country, from the starting point of extremely poor mdash; MDASH; about the wealth level of China in the 1970s. After decades of continued growth, it entered the ranks of developed countries, which is South Korea.There are only South Korea in the world.This is enough to prove that a country has maintained the rapid growth of decades.China's political system has been constrained by further reform.In the long run, the Chinese system may be rigid, stable overwhelming reforms, and stagnation of growth, which is a worse extreme.
It is difficult to say that China's actual situation will be more extreme.But it is important that we must understand that we must not continue because China's economy has developed for so many years, and we think it will continue.It depends on the global environment, and it depends on China's own choices.
FT Chinese website: Will this trade war become a major inflection point on China's development curve?
Wolf: I think this depends on how China responds and end the trade war.If China has made greater efforts in economic liberalization and is recognized by the West, and the international environment is still open to China, then I believe that China's growth will continue for a long time.
The other possibility is that the trade war has caused Chinese leaders to doubt the continued open economy, and instead believes that it can rely on the domestic market, perhaps plus some Belt and Road market mdash; mdash; in fact, the latter is difficult and developed.Compared with the market, China will abandon its comparative advantages in trade, abandon foreign investment, turn its eyes to the interior, and implement the so -called retreat locking country.
There are similar precedents in history, I only talk about one example.At the beginning of the 20th century, it ranked among the most developed countries in the world, whether you believe it, there is Argentina.Argentina was a large agricultural exporter at the time, very efficient and rich.Originally, this agricultural country should be gradually industrialized, bringing more wealth and social progress, and entering a benign development track.But at this time, the 1930s arrived, the world capital market collapsed, and the price collapsed.Argentina's response?It closed the economy, implemented a high degree of protectionist policy, and elected Belon as the president.
Belon has implemented a closed policy, which has brought a catastrophic impact on the Argentine economy. It has experienced the decline of nearly a century so far.This is not so caused by the external environment, it is better to be caused by Argentina's own choice.
Therefore, if the trade war makes China feel that the outside is a hostile world, we no longer believe it, no longer cooperate with it, and no longer open it, then China's national movement may have a major reversal.
