«It’s time to strive to transform from the 'Made in China' to 'Created in China'»
Prof. Zhouying Jin, Chinese Academy of Social Sciences and director of the Center for Technology Innovation and Strategy Studies, about the overheating economy, environmental challenges and the chances of China's future.
Professor Zhouying Jin, next to being a professor at the Chinese Academy of Scial Sciences, you are also the director of the Center for Technology Innovation and Strategy Studies. What are these institutes working on?
CTISS (Center for Technology Innovation and Strategy Studies) is a non-governmental group that carries out independent research work under the Chinese Academy of Social Sciences (CASS). CASS is the highest academic research organization in the fields of philosophy and social sciences as well as a national center for comprehensive studies in China. CASS is now made up of 32 research institutes and more than 50 research centers, which carry out research activities covering various social and humanistic areas such as economy, society, international relationship, philosophy, politics, history, law, financial area, etc. There are 4200 staff, among which about 3200 are researchers. It gathers the important think tanks for decision making of central government in China. During the past ten years, CTISS has carried out over 20 projects asked by the central government organizations such as the minister of Science and Technology (MOST), the State Planning Commission of China (SPCC), local government and international agencies. They are related to various research areas, for instance, Long-term Strategy Integration and Sustainable Development, Knowledge based Economy and Development Strategy of China, Intellectual Property Protection in 863 project, High-Tech Strategy of China in 2001-2010, (The 863 Program is China igh-Technology Research & Development Program which started in March, 1986) , Water Resources, Environment Studies of China in 21st Century, «Soft Technology & the Strategy of Service Industry Innovation», «Social Capital and Social Community» (NGO), «Oil and Natural gas Strategy for 21st century in China». Recently, CTISS started China’s series studies on future collaborating with the Future Research Center of Beijing Academy of Soft Technology.
During the summer of 2008 Bejing was in the focus of the (sport) world's attention. For an outsider there seem to be big differences between urban and rural areas in China. In what ways does Bejing represent China? Is the capital like a beacon?
It’s true that there exist the big differences between urban and rural areas in China like many other developing countries, but we should pay more attention that China is not what it used to be and makes great effort on changing these situations and has achieved big progresses. As the capital, Beijing is the center of politics, culture, education and intellect for China, and may be representative of cities of eastern developed region but not for all China in life level.
The economical and industrial growth of China is very impressive. Where will China be in 10 years from now?
China would continue to maintain growth of economic development in the next 10 years, however, the growth rate of GDP maybe and should be reduced for various reasons. It’s better to keep the growth rate of 7-8%. The key is to improve the quality of GDP, namely to reduce the environmental & social costs of GDP.
For a long time it was very cheap for western companies to have their goods produced in China. But in the last couple of years costs like office rents, but also cost of labour have gone up in cities like Shanghai. Will this trend go on?
The rise of the manufacturing cost in China is the general trend of development. First, the price of energy and raw materials, and transportation costs continue to rise, as well as land price is markedly higher; Second, wage costs is going up (the Government raised the minimum wage standards, as well as other requirements in new labor law); Third, the tax-related issue. The Ministry of Finance intensifies tax levy, while it weakens the support to the policy of export tax rebate; Fourth, the
requirement for improvement of products quality; Fifth, the issue of intellectual property protection; Six, Chinese currency continues to strengthen; Seven, anti-pollution legislation came into effect, and so on. These factors have affected the profits of enterprises, and moreover, caused manufacturing industry, which survival depends merely on the low-cost, to lose competitiveness. However, from a long-term point of view, it’s not necessarily a bad thing – a loss may turn out to be a gain. The pattern of Blind pursuit of low-cost production and sales in low price will be broken one day. On the one hand, in the past most of the low-cost production are maintained by backward product methods, ignoring the rights of workers, the vicious price competition, and the excessive encouragement of the state for enterprises’ exportation. On the other hand, the Chinese people's material living standards and the quality of life need to be improved, the quality of production need to be enhanced, the destructed ecology & environment has to be protected, and to build a resource-saving and environment-friendly society calls for the triple bottom line of enterprises (economic, social and environmental responsibilities including the working environment of labors), which all need to increase the costs. It’s time for China to be out of the development mode which is of high consumption and low efficiency, and get rid of the miserable status that most of manufacturing industry are in the most low-end of the industrial chain, create high value-added for others, and then bear accusation of depleting world resources and polluting environment, even sweatshops. It’s time to strive to transform from the «Made in China» to «Created in China» as soon as possible, and inaugurate the domestic and foreign markets which have not yet been occupied have not been opened.
From the objective point of view, China's mid-west regions have still some labor force space of low-cost. However, foreign companies should also keep pace with the times, no longer come to China only for the sake of a cheap labour force, but must grow up together with China's market. And furthermore, they had to realize that in China there are richer high-quality and cheap human resources, rich cultural resources ...
Some people fear that China's economy is overheating. What is your point of view?
In China, this argument of an overheating economy has been heard for a long time (after 2003). In my opinion, China's economy is overheating now in a sense and the key is how to get rid of it or how to restrain it.
On a more general scale, where do you think the big advantages and opportunities of China lie in the future?
Big advantages: Chinese leaders set a correct direction of future development (Leadership); The domestic political situation is stable, the general populace support the government (stability); China has participated & integrated into the international community (Environment); Rich human resources, high-quality talent (Intellectual basis); There also big opportunities in developing China’s culture.
What are the risks involved with taking this path?
There are 8 risks or challenges: Social development is lagging behind economic development; Deterioration of the ecological environment system; Scarcity of natural resource and energy; Three agriculture-related issues concerning agriculture, rural areas and farmers; The population problems. From the long term perspective: Deepening the reform and opening up; The road to a harmonious society & a harmonious world; The issues on cultural traditions and moral ethic.
With growth comes a higher energy demand. According to some theories not so much the increased use of energy will be the problem in the future, but the emmissions. What steps has China taken to keep the CO2-emmissions at bay?
In June of 2007, China promulgated a National Project to «Reply to Climate Change in China», put into effect the basic national policy of saving resources and protecting environment, and moreover China will fulfill international obligations in the United Nations Framework Convention on Climate Change ( UNFCCC). China will speed up the transformation of economic development mode, actively playing the role of energy conservation and optimization of energy structure in mitigating climate change, and endeavors to reduce fossil energy consumption. China is also vigorously developing a circular economy, and promoting the comprehensive utilization of resources, enhancing the energy efficiency and reducing greenhouse gas emissions. China may promise that the annual growth rate of carbon emission would be lower than that of GDP through energy-saving & pollution emission reduction, and lower than the average growth rate of carbon emissions in the past.
In the last two decades China has evolved rapidly. What changes can we expect in the next decade?
In the last two decades China has evolved rapidly in the economic domain. The world will see in the next decade that China will change its development mode step by step, and strive for harmonious development of economy, society and environment.
What global role will China play in 2018?
1. China will play a greater role in establishing a peaceful international environment and building a harmonious world;
2. China's reform and development are still in progress, it is too early to confirm what the Chinese model is. I believe that there is still a long way to go. However, the experience and lessons obtained in this course will be significant for the majority of developing countries. Because, many problems China faced in the course of development are common to those developing countries, which can obtain instructive inspiration in accordance with their respective national conditions.
3. Chinese culture and values will have increasingly profound impact on the post-industrial era, and provide rich connotation to create a new civilization suitable for sustainable development and beyond the old industrial civilization.
What can we look forward to hearing from you at the European Futurists Conference Lucerne?
You can look forward to hearing a true and independent opinion from a Chinese scholar about China’s future – confidence, worry and hope.
Professor Zhouying Jin is a senior researcher and professor at the Chinese Academy of Social Sciences (CASS) and a Director of Center for Technology Innovation and Strategy Studies (CTISS) of CASS. She is president and founder for the Beijing Academy of Soft Technology. She is also Chairman and founder of the Future 500 (China).
Prof. Zhouying Jin
Keynote «China 2018»,
Culture and Convention Centre KKL, Lucerne, Switzerland
October 27, 2008; 9.45 h