Transcript: China Chat
One question theme that has come up again and again and each of you, the panelist, can address this from your particular perspective and field of expertise. And that is: The sustainability of China's dramatic growth of 8 or 9 percent. It's breathtaking, it is history making but is it sustainable both from an economic point of view and a political point of view. Let's start right now from the economic point of view and start–let's start in Beijing, first of all with Prof. Lan Xue, the School of Public Policy. You are sitting there in Beijing, when you get up in the morning or go to bed at night, do you worry about China's growth?
Xue: First of all, I would have to say that China, indeed, has had a high rate of growth for the last decade and last two decades actually. I would say, certainly, the growth rate itself I think is not the concern, but it's what this growth actually means in terms of environment, in terms of energy consumption and so on. I think both as an economists and also I think the national leaders have been really concerned about this, and so the government has began to try to advocate a so-called scientific approach to the economic growths and trying to bring the energy and environment issues into the development process.
Utley: Micheal Komesaroff in Brisbane Australia, your specialty has been energy, the question of how raw materials and resources for China's manufacturing sector, we know how it's consuming even vaster amounts of these raw materials, particularly oil. Do you see that this is being sustainable?
Komesaroff: No, I don't. And I agree with the previous speaker. I think the concern is with quality of the investment that's gone into China over the last decade. Too much of it has gone into energy and non-labor intensive industry, which are not areas that China has a natural or sustainable competitive advantage, so unless something changes, dramatically, it's not sustainable. A couple times recently, the railway system, despite the government's best wishes, has ground to a halt. Water is having to shape up as a big issue. But if the government can restructure to more labor-intensive, less energy intensive industry then the growth can be sustainable and it's better quality growth.
Utley: Well, Bill Fischer, speaking to us from Italy, but having vast experience in China, will you pick up on what Michael was saying there in terms of sustainability, can China go from heavy investments into more labor intensive activities to preserve the growth rate?
Fischer: I have to ask myself, why would the past not be a good predictor of the future? And my sense is that China has been able to overcome similar infrastructure bottlenecks. Now, as they integrate in the global economy, they become exposed to a lot more of the same concerns that we have–high oil prices, raw material prices, in fact, it's their growth that may be driving some of these prices up. But my sense is that the infrastructure problems are relaxable, they can relax them. My sense is that the real challenge is the sustainability comes from outside of the structural phenomenon and are more things like some of the rich/poor divide within the country, China's economy's ties to U.S. prosperity, the fear of yet another SARS, which is less containable, those are the things that I would look to as the interruptions in sustainability rather than the structural issues which I think can be overcome.
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