In Beijing, the “China Development Forum 2021 Annual Meeting” was held from Saturday to Monday (March 20 to 22). Economist Justin Yifu Lin threatened at the conference that China will be the world’s largest economy in 10 years and a high-income country in 15 years. However, expert Song Xiaowu said that there are still 720 million people in China with monthly income below 2,000 yuan, especially the gap in income distribution is still relatively large in the world, while economic growth is driven by consumption.
Song Xiaowu said that China’s Gini coefficient, which reflects the gap between the rich and the poor in China, has been hovering at 0.46 or 0.47 for a long Time, reaching about 0.50 at high times. He also believes that in the low-income group, the migrant workers group has a very big impact on consumption.
Song Xiaowu said: “After China’s per capita GDP exceeded 10,000 US dollars, it entered a new stage. According to international experience, after the per capita income stepped over 10,000 U.S. dollars, the growth rate of investment are lower than the growth rate of GDP, to rely on consumption to drive economic growth.”
From the perspective of 2019, 290 million migrant workers account for about 66% of the 440 million urban employed people, such a large low-income group, which has a very big impact on consumption.
“There are 720 million people with a monthly income of less than 2,000, and the majority of migrant workers are among this group. A farmworker Family is counted as three people, and the group of migrant workers affects the consumption of 700 or 800 million people.”
Song Xiaowu said that consumption is not only constrained by primary distribution, but also secondary distribution. Developed countries can generally shrink 20-25 percentage points, while China shrinks the figure between 8 percentage points and 12 percentage points.
Some Chinese netizens praised Song Xiaowu’s remarks, saying that “finally, an expert has told the truth”.
Lin Yifu, professor and director of Peking University’s Institute of New Structural Economics and honorary director of Peking University’s National Development Institute, said at the forum that China could achieve high growth from 2020 to 2035, and that by 2035, China’s GDP per capita should cross 12345, which would become a historic milestone. If such a threshold is crossed, China will enter the group of higher income countries.
According to Justin Lin, if China can achieve 5%-6% growth per year in the next decade until 2030, China will be the world’s number one economy in terms of volume. If China can achieve 5%-6% economic growth in the next 15 years, by 2035, China will achieve the growth target set up to double its GDP per capita in 2035 compared to 2020, and that will be a level of $23,000 per capita.
A netizen once wrote an article on Zhihu website that “perhaps it is the master’s task, Professor Lin takes great pains to argue the development achievements of the second thirty years by explaining the history of the first thirty years and concludes from that – we have an incomparably bright future”, in Professor Lin’s In Professor Lin’s mouth, “five years later” we will be among the high-income countries, but, five years after five years, as time passes, Professor Lin’s “beautiful” prophecy is constantly overdue.
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