Pearls and Irritations

Zhang Ming: China must not sacrifice development for security. For a large developing country like China, development is the greatest security.

Today’s episode is short but worth reading. It’s a closing speech from the annual meeting of the China Society of World Economics (CSWE, 中国世界经济学会) delivered by Dr. Zhang Ming, Deputy Director of the Institute of Finance and Banking at the Chinese Academy of Social Sciences. It is worth noticing that on Oct.8th, Zhang Ming participated in the symposium on economic conditions, chaired by Premier Li Qiang, with experts and entrepreneurs.

Some Background info:

CSWE is an academic society comprised of China’s leading economists. Its President, Zhang Yuyan, is a member of the Chinese Academy of Social Sciences and served as a delegate to the 18th National Congress of the Communist Party of China, as well as a member of the 13th and 14th Chinese People’s Political Consultative Conference (CPPCC). Its academic advisory board includes renowned economists such as Yao Yang, professor and former Dean of the National School of Development at Peking University, and Li Daokui, Founding Dean of Schwarzman College at Tsinghua University.

Dr.Zhang Ming currently serving as Deputy Director and Research Fellow at the Institute of Finance and Banking, Chinese Academy of Social Sciences. Previously held positions as Deputy Director of the International Finance Division (2009-2012) and Director of the International Investment Division (2012-2020) at the Institute of World Economics and Politics (Both in CASS), Chinese Academy of Social Sciences. His professional experience includes roles as Chief Economist at Ping An Securities (2017-2020), Standing Committee Member and Deputy Mayor of Mianyang City, Sichuan Province (2021.11-2022.11, temporary assignment), Auditor at KPMG (2002-2003), and Fund Manager at Asset Managers Private Equity (2005-2007). His research experience includes visiting scholar positions at Harvard Kennedy School (2011-2012) and the Hong Kong Monetary Authority (2008).

Below is part of the transcript of his speech. Source: https://mp.weixin.qq.com/s/ey4Ty9vRZygizNiyS_nUAg

Currently, the international landscape is complex and unpredictable, and China’s economic growth faces new dynamics and challenges both domestically and internationally. On this matter, I would like to address four issues, starting with the first:

We must avoid falling into the trap of “pan-securitization.” In the course of the U.S.-China competition, we should be vigilant about this possibility: whenever we focus on development, the U.S. government may deliberately create geopolitical tensions to shift our focus from development to security. This “pan-securitization” trap is somewhat similar to the U.S. government’s “Star Wars” program against the Soviet Union in the last century. While security issues are important, we must not sacrifice development for security. For a large developing country like China, development is the greatest security – without development, there can be no security. It is crucial for us to achieve positive interaction between high-quality development and high-level security.

Second, we should implement a more flexible and strategic economic diplomacy. In international relations, we must abandon black-and-white thinking. We shouldn’t hastily assume that all developed countries seek to suppress and contain us. The U.S. and Europe are not monolithic; neither are the U.S. and Japan-Korea relations nor is the U.S. itself internally unified. We should explore all possibilities to maintain good relations with other countries, including implementing a high-quality opening-up strategy. Although the late-mover advantage in technological progress has significantly diminished, we should still enhance technological cooperation with other countries, striving to find opportunities where they present themselves. As Chairman Mao said, politics is about maximizing our friends.

Third, China’s economy currently needs both further expansion of macroeconomic policies and intensified reform and opening-up. One of the major challenges is achieving consumption expansion and upgrading through structural reform. I believe the key lies in focusing on two groups: First, small and medium-sized private enterprises must rediscover room for growth and development, with opening the service sector to them being perhaps the top priority. The growth of private enterprises can boost consumption by creating employment and increasing income. Second, through sustained fiscal transfer payment policies, we need to help low and middle-income households increase their income, access training opportunities, and enhance their possibilities for social mobility.

Fourth, building a unified national market will likely be one of the most crucial tasks of the Chinese government in the next phase. By breaking down regional and market barriers to allow various factors of production to flow freely nationwide, we can fully unleash the potential of China’s vast domestic market, facilitate industrial transfer from eastern regions to central and western regions, and ultimately achieve coordinated regional development and common prosperity. The construction of a unified market can bridge supply and demand, connect east-west and north-south, and revitalize economic dynamism and growth efficiency.

At this conference, we heard many high-quality research presentations. Looking ahead, I believe several types of research will become increasingly important: First, original theoretical and empirical studies based on China’s distinct characteristics can provide valuable policy recommendations for the next phase of China’s economic development. Second, reports and case studies are based on in-depth field research. Third, interdisciplinary research combines economics with artificial intelligence, politics, or social studies.

Looking forward, I believe that under the current unprecedented changes in the world economy and the strategic context of China’s national rejuvenation, our mission as scholars of world economics is to explore how China’s economy can navigate these new dynamics and engage economically with other nations. Let us hope we can fulfill this important mission.

Republished from Inside China, 21 November,2024

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