Ju Jiandong: The Future Ten Years is a Very Important Adjustment Period

After ten years, if we can achieve greater successin opening and reform, our society will develop along a healthy track.Therefore, these ten years are very important period adjustment. 

Reporter: Cui Mengling

Reporter:There have been 12 years since your proposition of a Chinese Community, how doyou think the Chinese Community is developing now?

JuJiandong: The construction has not started yet. I proposed the theory 12 yearsago under such a background: there are two tracks for opening of the worldeconomy. One is multilateral opening featuring the WTO’s principle, which isopening policy for one country should be applicable to all members under WTOstructure. The other way is regional economic cooperation like North AmericanFree Trade Area and Association. In fact, China faced such two different ways12 years ago, yet in 2001, we joined WTO and thus chose the multilateralopening way. Now, there have been many discussions in both academic world and thesociety arguing that there are many technical restraints of WTO while regionaleconomic cooperation is becoming more and more active. Though there-proposition comes 12 years later, it still has its practical meaning. If wewant to achieve a multipolar economic situation, we should first establish ourpole which is east Asian economy system led by China. On this meaning, it is ageneral trend to build Chinese Community.

Reporter:For now, the Greece sovereign debt crisis continuously deteriorates, and theinternational society worries that Greece may exit Euro Zone and holdspessimistic attitude toward prospect of Euro. What experience does this crisisprovide for future Chinese Community, even Asian countries’ regionalcooperation? 

JuJiandong: First of all, EU is a huge success in regional economic cooperation,just that it meets some problems. One of the problems is that currency policydoes not go with financial policy, for example, Greece debt crisis, especiallythe heated issue whether Greece will exit Euro Zone. Even though Greece exitsEuro Zone, core members of EU will stay in the union. Many experts doubtwhether the pushing forward of EU goes too fast. When I proposed the theory 12years ago, there were only 15 countries in EU, but now there are 27. For ourcountry, we have a clear goal which is to promote Chinese Communityconstruction and other regional cooperation. Also, political cooperation is animportant precondition of economic cooperation. Maybe you have not noticed thatthe Chinese Community I propose does not include Japan, because if Japan doesnot want to cooperate with China in politics, it is hardly possible to talkabout economic cooperation.

Reporter:You have mentioned in your speech that basic force of Chinese economydevelopment is promotion of human capital. The world economic crisis is stilldeepening. What problems will we face regarding economic transition in domesticeconomy? What direction should labor intensive enterprises that have made greatcontributions to our economy go? What place will our labor intensiveenterprises take in the future ten year development strategy?

JuJiandong: First of all, we need regional adjustment. Nowadays our per capitaGDP reaches $5000, and the biggest problem is structural unbalance. Theso-called structural unbalance means that national per capita GDP is relativelyhigh, but per capita GDP of eastern China such as Shanghai and coastlands isvery high while per capita GDP of midwest China is very low. Therefore, the percapita GDP $5000 means that we still have a very big increase space, yet suchspace is unbalanced in different places. In the days to come, it is very commonthat the speed of economic development in highly developed regions such asShanghai, Beijing, etc. will rapidly come down while that of midwest areasrapidly increases, and therefore, we need big adjustment in structure.   

Secondly,we also need adjustment in industry. Labor capital which we originally focusedon labor intensive enterprises may shift more to capital intensive enterprises,and industries in different regions need adjustmentsas well. On one hand,adjustment is change of opening policy in the new stage of opening, on theother hand, we need to make more efforts to construct domestic market instructural adjustment in order to build up Chinese market led by Chineseenterprises, Chinese brands and Chinese rules. By far Chinese brands have nottaken a leading place in Chinese market, mobile phones for example. If we goalong such direction, we will have a very big increase space. To build a marketled by Chinese enterprises is totally different from cutting off China from theoutside world. Only, judging from the two concepts in economics and economicadvantages, we should do what we should do, import what we should import, donot import what we should not import, and protect what we should protect. Ourtask for now is mainly to assimilate to world economic system by providing manydiscount policies for businesses which are good for export and march into theworld market, but our task in the future should more tend towards domesticmarket construction. 

Thirdly,by now our urbanization mainly focuses on large cities and metropolises, hardlyon moderate cities. Our focus of development in the future should go back ontowns and regional markets. Opening is not only for foreign markets, but forregional markets as well, especially for countryside and country regionaleconomy. If we can well adjust the above structures, we can have very bigincrease space.

Reporter:Would you please imagine China after ten years?

JuJiandong: After ten years, if we can achieve bigger success in opening policyand transition of reform policy, our society will develop along a healthytrack. Therefore, these ten years are a very important adjustment period. I amvery confident of China at that time!

Introduction of Ju Jiandong:

Professorof Economics Department, College of Economics and Business Administration,Tsinghua University, Dean of International Economy Research Center, Professorof Oklahoma University, Resident Researcher in IMF Research Department, mainlyfocuses on International Trade, International Finance and IndustrialOrganization, etc.