China's Reform in International Context
Author： Source： Date：2017-09-01
Editor’s notes: In Mr. Morrison’s account, the Asia-Pacific region is going to be the core at the level of global leadership. Therefore, countries within the region have unique leadership, responsibilities, and we need to think and act with broader global, systematic interest in mind. Increasingly economic integration and social innovations that not only need governmental efforts but also social contributions, are essential in restore faith in today’s world.
I want to thank the sponsors and organizers for inviting me to this very important meeting, the very informative. I also want to thank so many students here. That’s a Saturday morning. It’s very impressive that you are here. You are the future of China. Now I’m not an economist, but I understand that China is going through a very critical period, in terms of its renovation and innovation, the highly successful model of economic growth in the last three decades, dominated by the export, manufacturing industry, massive government investment in infrastructure. It’s nearly at the end of its life cycle, just like earlier in Japan and in Korea. China is seeking a new model in which consumer, consumer spending, services, market forces, greater innovation, and higher value-added activities, all play a much larger role. And this isnt’s just hope, as I understand that China can continue the new normal growth rate for some time, despite some serious demographic and other hindrances. Even though china’s growth rate has slowed to the 6 to 7% range, there’s still a lot of scope for growth, and it’s still in an impressive figure, and China remains a big locomotive for the word economic. And since growth in the present time is staggering in Japan, in Korea, in Europe, and since the United States, growth rate is still less robust than it should be. The rest of all has enormous stake in China success.
Now my field is international relation and I’d like to think about the long term. So what I will present a little more initially is the lager structure of global power and relations. China is soon poised to become the word largest economy, maybe already, depending on the measurement. Within a medium term, China may become the word most powerful country, when non-economic factors are also brought into the consideration. This slide is a protection from the US national intelligent council of comprehensive power of major countries, and of the European Union, It takes into account economic power, military power, technology, health, education and good governance. This slide is from a public document. It is not revealed by wiki leaks. These are only projections. Obviously some of these elements could not be measured easily or aggregately, but still I think it’s like a useful approximation of what the world may look like in 20, 30, 40 years. It shows a couple of things. First, it shows that China will surpass the United State as the world’s most power nation. That’s not a given but it’s quite likely. But it also shows it’s even more likely the world power is increasingly fragmented. No one country, not even China, will be as powerful relative to the rest of the world as the United States has been over the last 70 years. This means that we will need for just going to address a couple of issues, even more international cooperation.
Now one can asks, as US is only 20% of the world power, is US still important? And I think it is, for four reasons. Fist is immigration which is undoubtedly going to continue despite our election. It’s an enormous source of social change and innovation in the United States. For 325 million Americans, 1/6 of those, almost 50 million Americans are born overseas. This is the highest figure in the United States in over a century. China is a little different. China has a lot of internal diversity, but of its 1.4 billion people, only one million are born somewhere else. So it’s a very different kind of society. Both have their strength and weaknesses. But I think, for the United States, the continuing immigration is an enormous source of social dynamism and also a factor of composition of our labor force. Because immigrants are young; immigrants have a higher fertility rate than the general population. And it means the United States remains a younger society and labor force than what we would have otherwise. As you can see from these projections, assuming current immigration patterns, the US labor force will rise, unlike China, Japan, Korea or Europe. China’s labor force and also its total population has already started to decrease. And the United States also remains relevant because the fluidity between its government, academia, finance and business, typified by Silicon Valley. This is almost unique and it favors innovation. The US federal system also allows a lot of experimentation. If you will, we have 50 systems in one country. Another reason for US relevance is that its education and research institutions will undoubtedly continue to attract the best talents from all over the world. Finally, I think will be a continuous willingness on the part of Americans to provide some important public goods. And that’s why I think the core of global power and influence in this century would not be just Asia, but also would be in the Asia-Pacific region. Both sides of the Pacific, China and United States will constitute the core of the core.
This does not mean that these two countries or that the Asia-Pacific region as a whole including Japan, India, Southeast Asia, can determine or force their will upon others. But it means that we have unique leadership, responsibilities, and we need to think and act with broader global, systematic interest in mind. Now, what is needed to really be effective core in the global core and provide global leadership? Well, I think first of all, you need to have stable, predicable units because countries cannot not make commitments or those commitments are changed and they cannot be an affective partner in the international system. They need to have good relationships with each other. And that’s why the relationships between China, Japan, United States, Southeast Asia, and India remain very important. They need to have open, connected, and integrating economies, and hopefully if we get TPP or RCEP, that process will continue. They need to have supportive and informed publics to understand the issues at stake. They need to draw out talents from the whole society, not just the elites. They need to take into account the interests and sensitivities of other regions of the world, and other perspectives. They need to be effective in addressing the region’s own issues. They also need to, as President de Klerk emphasized yesterday, a strong cadre of leaders, not just at the very top, but individuals aware of issues, capable of innovation, sensitive to each others’ interest and traditions, and with visions, but also a vision of how to get to the vision, in other word, road plans. The point of public policy and of all international cooperation is not to help specific industries but help the industries as a whole to lead prosperous, peaceful and secured lives. As mentioned several times in previous parts of this meeting, the picture of this region has been on a whole very positive. But there are huge challenges, demographic, environmental, inequality, challenges to health care system, conflicting territorial claims and so forth. There are also a lot of stresses at the individual level. This is very hard to measure it but one possible measurement is suicide rates and those are increasing rather dramatically in Asia. Japan has always had a high rate. But in Korea, China, suicide rates are increasing. And the question is why and these are the stuffs that we need to think about and understand how the stresses in modern economy and modern society affect the individuals?
One thing that we know for sure is that innovation is closely associated with openness. Product innovation is driven by access to a big market. China has a big market, so China has been quite successful in consumer-oriented product innovation, and science-based innovation for instance, whether it is free or rapid exchange of ideas. China is still in this area largely accepting innovations from elsewhere but it will increasingly be a contributor.
Social innovation also benefits from the collaboration of governments and the rest of the society. So we need not just openness to go across national borders but openness to across the borders that we create in our own society. The social issues, as emphasized in the presentation on PPP, are too big for governments to solve on their own. In general, governments, in particular bureaucracies are much better at reform that is making incremental changes in the existing policy institutions than into social innovation that is creating something new. And that’s why in an age of inequity and when we have individuals of enormous wealth, we also need philanthropists working in partnership with government. China’s philanthropy has grown less quickly than its economic power. But today China has probably the largest number, or maybe the second largest number of individuals of enormous wealth, billionaires. Philanthropy can innovate, experiment in a way that is almost impossible for governments. This is why my institution at the East West Center has been working with Beijing, and Shenzhen-based China global philanthropy institute. They build ties, share techniques, and establish cooperative projects between Chinese, American and other philanthropists. International philanthropy could build good wills across borders. It can help us understand each others’ innovative practices and it can make a difference between a world of turmoil, fear, degradation, and a better future for China and for the world.
Thank you.
Charles Morrison has been the president of the East West Center since 1998. His area of expertise lie in the APEC forum, Asia Pacific international relations, economic issues, and security issues, as well as U.S.-Asia policy and trade policy.
Speech delivered at the Global Views and China’s Economy session during the 3rd Dameisha Forum. Opinions expressed belong to the author and do not necessarily represent the position of SZIDI.
I want to thank the sponsors and organizers for inviting me to this very important meeting, the very informative. I also want to thank so many students here. That’s a Saturday morning. It’s very impressive that you are here. You are the future of China. Now I’m not an economist, but I understand that China is going through a very critical period, in terms of its renovation and innovation, the highly successful model of economic growth in the last three decades, dominated by the export, manufacturing industry, massive government investment in infrastructure. It’s nearly at the end of its life cycle, just like earlier in Japan and in Korea. China is seeking a new model in which consumer, consumer spending, services, market forces, greater innovation, and higher value-added activities, all play a much larger role. And this isnt’s just hope, as I understand that China can continue the new normal growth rate for some time, despite some serious demographic and other hindrances. Even though china’s growth rate has slowed to the 6 to 7% range, there’s still a lot of scope for growth, and it’s still in an impressive figure, and China remains a big locomotive for the word economic. And since growth in the present time is staggering in Japan, in Korea, in Europe, and since the United States, growth rate is still less robust than it should be. The rest of all has enormous stake in China success.
Now my field is international relation and I’d like to think about the long term. So what I will present a little more initially is the lager structure of global power and relations. China is soon poised to become the word largest economy, maybe already, depending on the measurement. Within a medium term, China may become the word most powerful country, when non-economic factors are also brought into the consideration. This slide is a protection from the US national intelligent council of comprehensive power of major countries, and of the European Union, It takes into account economic power, military power, technology, health, education and good governance. This slide is from a public document. It is not revealed by wiki leaks. These are only projections. Obviously some of these elements could not be measured easily or aggregately, but still I think it’s like a useful approximation of what the world may look like in 20, 30, 40 years. It shows a couple of things. First, it shows that China will surpass the United State as the world’s most power nation. That’s not a given but it’s quite likely. But it also shows it’s even more likely the world power is increasingly fragmented. No one country, not even China, will be as powerful relative to the rest of the world as the United States has been over the last 70 years. This means that we will need for just going to address a couple of issues, even more international cooperation.
Now one can asks, as US is only 20% of the world power, is US still important? And I think it is, for four reasons. Fist is immigration which is undoubtedly going to continue despite our election. It’s an enormous source of social change and innovation in the United States. For 325 million Americans, 1/6 of those, almost 50 million Americans are born overseas. This is the highest figure in the United States in over a century. China is a little different. China has a lot of internal diversity, but of its 1.4 billion people, only one million are born somewhere else. So it’s a very different kind of society. Both have their strength and weaknesses. But I think, for the United States, the continuing immigration is an enormous source of social dynamism and also a factor of composition of our labor force. Because immigrants are young; immigrants have a higher fertility rate than the general population. And it means the United States remains a younger society and labor force than what we would have otherwise. As you can see from these projections, assuming current immigration patterns, the US labor force will rise, unlike China, Japan, Korea or Europe. China’s labor force and also its total population has already started to decrease. And the United States also remains relevant because the fluidity between its government, academia, finance and business, typified by Silicon Valley. This is almost unique and it favors innovation. The US federal system also allows a lot of experimentation. If you will, we have 50 systems in one country. Another reason for US relevance is that its education and research institutions will undoubtedly continue to attract the best talents from all over the world. Finally, I think will be a continuous willingness on the part of Americans to provide some important public goods. And that’s why I think the core of global power and influence in this century would not be just Asia, but also would be in the Asia-Pacific region. Both sides of the Pacific, China and United States will constitute the core of the core.
This does not mean that these two countries or that the Asia-Pacific region as a whole including Japan, India, Southeast Asia, can determine or force their will upon others. But it means that we have unique leadership, responsibilities, and we need to think and act with broader global, systematic interest in mind. Now, what is needed to really be effective core in the global core and provide global leadership? Well, I think first of all, you need to have stable, predicable units because countries cannot not make commitments or those commitments are changed and they cannot be an affective partner in the international system. They need to have good relationships with each other. And that’s why the relationships between China, Japan, United States, Southeast Asia, and India remain very important. They need to have open, connected, and integrating economies, and hopefully if we get TPP or RCEP, that process will continue. They need to have supportive and informed publics to understand the issues at stake. They need to draw out talents from the whole society, not just the elites. They need to take into account the interests and sensitivities of other regions of the world, and other perspectives. They need to be effective in addressing the region’s own issues. They also need to, as President de Klerk emphasized yesterday, a strong cadre of leaders, not just at the very top, but individuals aware of issues, capable of innovation, sensitive to each others’ interest and traditions, and with visions, but also a vision of how to get to the vision, in other word, road plans. The point of public policy and of all international cooperation is not to help specific industries but help the industries as a whole to lead prosperous, peaceful and secured lives. As mentioned several times in previous parts of this meeting, the picture of this region has been on a whole very positive. But there are huge challenges, demographic, environmental, inequality, challenges to health care system, conflicting territorial claims and so forth. There are also a lot of stresses at the individual level. This is very hard to measure it but one possible measurement is suicide rates and those are increasing rather dramatically in Asia. Japan has always had a high rate. But in Korea, China, suicide rates are increasing. And the question is why and these are the stuffs that we need to think about and understand how the stresses in modern economy and modern society affect the individuals?
One thing that we know for sure is that innovation is closely associated with openness. Product innovation is driven by access to a big market. China has a big market, so China has been quite successful in consumer-oriented product innovation, and science-based innovation for instance, whether it is free or rapid exchange of ideas. China is still in this area largely accepting innovations from elsewhere but it will increasingly be a contributor.
Social innovation also benefits from the collaboration of governments and the rest of the society. So we need not just openness to go across national borders but openness to across the borders that we create in our own society. The social issues, as emphasized in the presentation on PPP, are too big for governments to solve on their own. In general, governments, in particular bureaucracies are much better at reform that is making incremental changes in the existing policy institutions than into social innovation that is creating something new. And that’s why in an age of inequity and when we have individuals of enormous wealth, we also need philanthropists working in partnership with government. China’s philanthropy has grown less quickly than its economic power. But today China has probably the largest number, or maybe the second largest number of individuals of enormous wealth, billionaires. Philanthropy can innovate, experiment in a way that is almost impossible for governments. This is why my institution at the East West Center has been working with Beijing, and Shenzhen-based China global philanthropy institute. They build ties, share techniques, and establish cooperative projects between Chinese, American and other philanthropists. International philanthropy could build good wills across borders. It can help us understand each others’ innovative practices and it can make a difference between a world of turmoil, fear, degradation, and a better future for China and for the world.
Thank you.
Charles Morrison has been the president of the East West Center since 1998. His area of expertise lie in the APEC forum, Asia Pacific international relations, economic issues, and security issues, as well as U.S.-Asia policy and trade policy.
Speech delivered at the Global Views and China’s Economy session during the 3rd Dameisha Forum. Opinions expressed belong to the author and do not necessarily represent the position of SZIDI.
