China can fuel high growth for another 30 years, says expert
Its imports of technology alone are enough to maintain a booming economy for quite some time, assures economist
By Larry Teo
CHINA can sustain its current annual growth of 8 to 9 per cent for up to 30 years, an economic adviser to the Chinese government said yesterday.
One factor alone - the acquisition of technology from developed countries - is enough to keep the economy humming for many years, Professor Justin Lin Yifu told a 100-strong audience at a public talk at the National University of Singapore.
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'While the United States, after the Internet boom, can only hope for growth of 2 to 3 per cent a year, China can reach 9 per cent or more as it is still at the stage of importing and learning from foreign technologies,' said Prof Lin, the founding director of the China Centre for Economic Research at Beijing University.
He believes it is more economical to borrow inventions rather than to pioneer research.
'Importation of technology is a far cheaper means of innovation compared to inventing something yourself,' he stressed.
Prof Lin was giving the Goh Keng Swee Lecture on Modern China. The talk, entitled 'Is China's growth real and sustainable?', was organised by the East Asian Institute.
The Chicago University alumnus also used socio-economic indicators to show that China today resembles Japan in the 1960s and is thus 30 years away from joining the club of elite economies.
'In terms of life expectancy, infant mortality rate and the declining share of agriculture in GDP, China now approximates Japan's records in the 1960s,' said Prof Lin.
The economist calculated that if China, as projected, leads the US in growth by 7 per cent a year, its per capita income will be 25 per cent of that of the US in real terms in 30 years.
'But as the renminbi will appreciate at the same time, China's per capita income should by then be half that of the US.'
However, such a rapid rise perturbs the US, Prof Lin said.
'Therefore, how to tackle China's trade deficit with the US is now the most important issue to the Chinese President,' he said.
Prof Lin also traced what has prompted widespread talk about China's economy overheating and heading for recession.
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