On the afternoon of February 17, 2024, the 8th Taihe Civilizations Forum (TCF) kicked off its first sub-session, "LSE China Development Forum & 8th TCF Sub-Session on Economy," at the Sheikh Zayed Theatre, London School of Economics and Political Science (LSE) in London, UK. This sub-session was organized by the host, the China Development Society at LSE, and supported by Taihe Institute.
At the panel, experts from China and the UK came together to discuss post-COVID economic landscape, highlighting both the challenges and opportunities ahead. The session, a melting pot of scholars and industry leaders, delved into the complexities of fostering economic resilience and identifying new growth avenues in the wake of the pandemic.
Attendees in the discussion include: Mr. Kent Deng (Chair), Full Professor of Economic History at LSE, Fellow of the Royal Historical Society (FRHistS), and Associate Director at the Confucius Institute for Business London, Ms. Judith Shapiro, Senior Lecturer in Practice, Economics Departmental Tutor at LSE, Mr. Sun Yongfu, Senior Fellow of Taihe Institute, Director General, European Affairs Department, Ministry of Commerce of PRC (2003-2015), Mr. Einar Tangen, Senior Fellow of Taihe Institute, Founding Partner, Center for China and the World, City University of Macau, and Chairman of Asia Narratives, Ms. Shirley Yu, Senior Visiting Fellow and Director, China-Africa Initiative, LSE, Mr. Charles Liu, Senior Fellow of Taihe Institute, Founding Director, Center for China and the World, City University of Macau, and Co-Founder of Impact Asia Capital Ltd., and Mr. Ding Yifan, Senior Fellow of Taihe Institute, Vice-Director of World Development Institute of Development Research Center of the State Council of PRC (2000-2014).
Mr. Sun, taking the floor for the first time at such a round-table, pointed out that despite the tremors sent through the global economy by COVID-19, China has managed to sustain a commendable growth rate of 5.2% last year. Though slightly lower than pre-pandemic levels, this figure is a testament to the country's enduring economic momentum, cultivated over four decades of high to medium growth. Sun raised concerns over the reliance on real assets, which now constitute a third of China's GDP, and the search for new growth engines amidst challenges like the 2018 tariffs from the US.
Highlighting strategic shifts, Sun revealed plans for a significant investment of 350 billion into sectors such as low-cost housing and urban renovation, aiming to diversify exports with a keen focus on ASEAN countries, now surpassing the EU, and upgrading the supply chain to include burgeoning industries like electric vehicles, where companies like BYD have overtaken Tesla in production.
Ms. Yu offered a stark overview of the global economic shifts, noting a pivot in 2021 with the United States' reduced dominance in global markets. She underscored the quadruple dilemma of deflation, debt, decoupling, and demographics facing the global economy, with China experiencing mild deflation and a notable decrease in property values across 68 cities. The debt-to-GDP ratio in China, alarming at 291 percent, was highlighted alongside the strategic decoupling efforts and demographic challenges, suggesting a nuanced transition towards new growth drivers amidst a negative outlook from Moody's.
Mr. Tangen contrasted China's debt scenario with the US, labeling the latter's situation as akin to a "Ponzi scheme." He emphasized the inseparability of politics from economics, arguing for a digital age transition that could potentially shift the global economic center of gravity further East, benefiting from increased productivity and cost-effective digital payment systems.
Ms. Shapiro voiced concerns over the potential for economic panic, drawing parallels with the Soviet Union's collapse. She advocated for enhancing human capital and promoting gender equality, alongside critical thinking and economic freedom, as essential pillars for sustainable growth.
Mr. Liu, with his rich background in UN and US relations, confidently dismissed the narrative of China's economic collapse, citing the resilience shown in the face of trade wars and sanctions. He emphasized the role of initiatives like the Belt and Road Initiative (BRI) in fostering South-South cooperation and the importance of stability and conflict avoidance in global development.
Mr. Ding closed the panel with insights into the paradoxical nature of China's economy, marked by a thriving new technology sector alongside struggling traditional industries. He highlighted the crucial role of demand-side policies in expanding the middle class and addressing the challenges of decoupling and global supply chain fragmentation.
The Q&A session touched on practical concerns, from navigating stock market fluctuations and career prospects for overseas Chinese students to the impact of the Hukou system on economic development and the role of women in the workforce. The discussions underscored the necessity of cultural interaction, educational and healthcare facilities for migrants, and supportive policies for women, including paid maternity leave and better childcare, to ensure inclusive economic growth.
As the event concluded, the experts' dialogue painted a picture of an economy at a crossroads, with China poised to leverage its strengths while navigating the complexities of a rapidly changing global economic landscape.
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