China Economic Development

Question 1

According to IMF, how big will be China real GDP growth by 2022?

Answer 1

It will continue to slow to 5,7% by 2022

Question 2

SOEs represent 7% of all industrial companies in China but how much of the liabilities in industrial sector do they account for?

Answer 2

More than 50%

Question 3

How much of China GDP growth for the last 15 years has been accounted for fixed investment spending?

Answer 3

More than 40 percentof Chinese GDP for nearly 15 years

Question 4

What was the growth of housing prices in 4 largest cities in China for the last 2 years?

Answer 4

It was over 60%

Question 5

What will happen to China work-age population within the next 20 years?

Answer 5

It will decline by 10% according to UN

Question 6

How many of 10 largest container ports in the world are Chinese?

Answer 6

China has 6 of the 10 largest container ports in the world

Question 7

What was the benefit of having pilot development projects on a local government level in China

Answer 7

Chinese government could observe different initiatives and see what was working and then roll it out on a national level.

Question 8

What were the key KPIs for local governments for the last 2 decades?

Answer 8

Key KPIs for local governments were: growth, FDI, employment and social stability

Question 9

How big will be the world’s middle class by 2030? Where will these people be located?

Answer 9

By 2030 the world’s middle class will grow from 1.8bn to 5bn people. 2/3 of these new middle class citizens will come from Asia.

Question 10

What is the correlation between the share of services and productivity growth?

Answer 10

Productivity growth is normally slower in services than in manufacturing.

Question 11

What is the fastest-growing segment of the international trade?

Answer 11

Trade in services. Services such as health and education will be traded similar to manufactured goods of today.

Question 12

Will USD keep its role as the #1 international trade currency?

Answer 12

USD will keep its role as a major international currency, however but it will be more expensive to use USD for international trade.

Question 13

Which technologies are said to bring huge potential competitive advantage to China?

Answer 13

Clean coal energy technologies

Question 14

Will developed countries keep leadership in key technological breakthroughs?

Answer 14

They probably will, but not in all areas

Question 15

From 2025 China GDP growth is expected to be around 5%, what are the main reasons for this slowdown?

Answer 15

This is because much of the the growth contribution from shifting from agriculture to industry has already occurred. Besides China is facing tremendous demographic turnover.

Question 16

Why is total factor productivity growth is going to slowdown in China?

Answer 16

Because major foreign technologies have been implemented and the results of first generation of reforms have been exhausted.

Question 17

What will be the role of consumption and services compared to the role of exports, savings and investment in China?

Answer 17

The role of consumption and services in the economy will grow and the role of exports, savings and investment will decline

Question 18

Will inequality grow in China with the time?

Answer 18

Inequality will gradually flatten and decline due to the development of western regions and rising salaries for migrant workers into cities

Question 19

Will China keep its existing competitiveness in labor costs?

Answer 19

China’s existing competitive advantage in labor costs will decline.

Question 20

Does China produce more energy than US?

Answer 20

China produces more energy than US but on per capita basis Americans consume 5 times more energy than Chinese.

Question 21

How many college graduates will China have in 20 years?

Answer 21

In 20 years the amount of college graduate in China may become over 200 million people - larger than the whole labor force in United States.

Question 22

What will happen to the costs of logistics from West to East in China?

Answer 22

Due to improvements in transport network the costs of logistics from West to East will decline.

Question 23

What are the five features of countries that could sustain high economic growth for a long time

Answer 23

a) Maintaining trade and investment policies, b) macro-economic stability, c) high savings and investment rates, d) markets are allowed to allocate resources, e) competent and committed governments.

Question 24

If China achieves the purpose to become a high-income society by 2030 what per capita GDP will it have?

Answer 24

China per capita GDP will be about 16000 USD (close to the level of modern Slovakia and a third of today’s USA).

Question 25

Except for the high R&D expenditures, what are some other key drivers behind the development of a competitive R&D network in China?

Answer 25

Sustaining connections with world’s R&D centres, nurturing open innovation, encouraging competition both in state and especially in private sector.

Question 26

How many Chinese universities made it to the top 500 universities list in 2016?

Answer 26

In the list of top 500 universities China used to have only 12 in 2003. In 2016 the number grew to 22.

Question 27

What was the difference in total factor of productivity in China between SOES and private enterprises during the period from 1978 to 2007?

Answer 27

From 1978 to 2007 a total factor of productivity growth in state sector was a third of that in the private sector

Question 28

What are China major strategic industries?

Answer 28

China strategic industries: defence, electricity generation and distribution, petroleum and petrochemicals, telecommunications, coal, civil aviation and waterway transport

Question 29

What are the key areas of internal demand that will be boosted by growing economy in China?

Answer 29

Growing economy will increase internal demand for consumer durables, leisure activities, housing, health, eduction products.

Question 30

How big is China social mobility compared to that of South Korea?

Answer 30

In South Korea 45% of population migrated across provinces, in China it is 19.5% - more social mobility would improve appropriate allocation of talent across geographies

Question 31

Who does most of applied research in developed countries?

Answer 31

Most applied research in developed countries is done by large private sector firms.

Question 32

As China approaches the technological frontier, what should be the role of the government?

Answer 32

The innovation at the technology frontier is very different from catching up technologically. The success becomes highly uncertain and the government cannot plan for it. Instead its role will be more of support and facilitation (May be controversial, take e.g. DARPA)

Question 33

How many millionaires are there in China?

Answer 33

China is home to 1 million millionaires, yet 170 million of people live here at less than 2 USD per day

Question 34

What will combination of development and green tech bring to China in terms of development?

Answer 34

China does not want to get rich and then clean up later like all the developed countries did

Question 35

What are the benefits of higher density of population in terms of public and private investements?

Answer 35

A higher density of population in cities results in better allocation and higher yields from public and private investments

Question 36

How to tackle poverty in China

Answer 36

a) By sustaining rapid economic growth, b) by helping the poor to mitigate unassured risks and providing addressed help, c) by improving access to education, healthcare and providing a better rural infrastructure, d) by providing better access to education and social services to migrant workers through reform of the Hukou system, e) by fiscal reform

Question 37

What will happen with Chinese competitiveness if China fails to move up the value chain?

Answer 37

Unless China moves up the value chain, the competitiveness of its exports will keep falling. a) its share of imports in the world is already very high, b) its production costs will keep rising, c) the amount of antidumping cases against China will increase

Question 38

What is middle-income trap?

Answer 38

This means that several developing (low-income) economies were able to transition to a middle income economy, butbecause they were unable to sustain high levels of productivity gains (in part because they couldnot address structural inefficiencies in the economy), they were unable to transition to a high-income economy.

Question 39

What was China GDP in nominal dollars in 2016?

Answer 39

China’s GDP in 2016 in nominal dollars was $11.2 trillion,about 60% the size of the U.S. economy

Question 40

What was China’s per capita GDP in 2016? How does it compare to the US per capita GDP?

Answer 40

China’s percapita GDP in 2016 was $8,113, which was 14.1% of the U.S. level.

Question 41

How big is China GDP on PPP basis?

Answer 41

Adjusting for this price differential raises the value of China’s 2016 GDP from $11.2 trillion(nominal dollars) to $21.3 trillion (on a PPP basis)

Question 42

How big was China GDP in 1820?

Answer 42

According to a study by economist Angus Maddison, China was the world’s largest economy in 1820, accounting foran estimated 32.9% of global GDP

Question 43

What is China gross value added? How does it compare to that of US?

Answer 43

In 2014, China’s gross valued added manufacturing was equalto 27.7% of its GDP, compared to 12.1% for the United States.

Question 44

What is a substantial amount of China’s imports comprised of?

Answer 44

A substantial amount of China’s imports is comprised of parts and components that are assembled into finished products, such as consumer electronic products and computers, and then exported.

Question 45

Which countries have free trade agreements with China?

Answer 45

China currently has free trade agreements (FTAs) with 23 partners, including with the 10 countries that make up the ASEAN, Australia, Chile, Costa Rica, Hong Kong, Macau, Iceland, New Zealand, Pakistan, Peru,Singapore, Switzerland, Australia, South Korea, and Georgia.

Question 46

How much of non-agricultural GDP is made by SOEs in China?

Answer 46

China’s SOE (all 150 000 of them) s may account for up of 50% of non-agriculture GDP

Question 47

What was the largest contributor of China’s real GDP growth during the last several decade? What changed during the last two years?

Answer 47

For the past several years, gross fixed investment has been thelargest contributor to China’s real GDP growth
However, in both2015 and 2016, private consumption was the largest contributor to GDP growth

Question 48

Has China become more reliant on exports during the last few years?

Answer 48

No. Its exports of goods and services as a percent of GDP dropped from a peak of 38.3% in 2006 to 20.5% in 2016

Question 49

What is the dynamics of China’s fertility rate from 1964 to 2012?

Answer 49

China’s fertility rate fell from about 5.8 births per woman in 1964 to 1.6 in 2012.

Question 50

What are the estimations of China GDP growth for the next two years?

Answer 50

Infrastructure investment is expected to keep GDP growth around 61⁄2 per cent this year and next