Dear Chairman Chu, President Wang, Dean Yuan, Dean Deng, Professor Qu, Colleagues, Friends, and Class of 2019, Good morning! It is my great honor to speak here at this exciting moment on behalf of faculty members at the Yenching Academy. First welcome to Yenching Academy. I believe that studies in Yenching Academy is one of the smartest choices for young brilliant scholars like you, because Yenching Academy is one of the best platforms for you to understand China, to feel China, and to learn China.
It is well known that China is a great country with long history and splendor culture. As an economist, today I instead would like to share with you my observations on the Chinese economy. Today China’s GDP is around 90 trillion RMB, or equivalently, 13.2 trillion USD. China has already become the second largest economy in the world. China’s foreign trade is 30 trillion RMB or 4.62 trillion USD, and hence registers the largest trading country in the world. Moreover, China also maintained more than 8 percent annual GDP growth rate in the last four decades.
However, before 1949 when PRC was established, China indeed was one of the poorest countries in the world. China’s per-capita GDP is even less than one-third of per-capita GDP in those sub-Saharan countries. But today, China’s per-capita GDP is close to ten thousand US dollar, and firmly becomes an upper middle-income country in the world. This is the first miracle of the Chinese economy.
Equally impressively, China also realizes its second miracle of poverty reductions. China has 1.3 billion people, but today almost no Chinese people live under the absolute poverty line with 2 dollars per day. The expected life length also increases from 40 years-old in 1949 to 77 years-old today.
So here the essential question for all of us is to understand how China make it. How China can successfully take-off within 7 decades? And precisely, how China can realize a mystery of economic development within forty years? Equally importantly, can other countries, including both developing and advanced countries, learn from China’s unprecedented experience?
Different scholars have different views. Some argue that China’s economic success is because Chinese people are diligent hard-workers. Some believe that China’s social development is due to the special Asian cultural characteristics with high marginal propensity of saving. Some even just view China’s prosperity is due to purely good luck.
These answers have their own wisdom, but still cannot tell us the most fundamental secret of China’s miracles. Chinese people were always diligent in the past 5 thousand years but why we did not see economic growth in the past hundred years? Similarly, Chinese people are precautious for long time but economic took-off mostly happens in the last 4 decades. By the same token, luck cannot be the long-run driving force of China’s economic mystery.
A plausible answer to the question is that China’s success is due to its domestic reform and foreign opening-up. Based on a system of solid and complete industrial categories established during PRC’s first 30 years, China’s government correctly engages in the global supply chain to embrace globalization since 1978. Market plays an essential role in resource allocation. Simultaneously, government also plays an effective role in facilitation of trade and investment. China keeps moving by two legs: market and government. With the assistance of these two legs, China is able to realize its comparative advantage by adopting an export-led development strategy in the late 20thcentury and fulfill its increasing returns to a large market scale since China’s access to the World Trade Organization in 2001.
Still, this should not be the whole recipes of China’s success. Because other countries also open up their domestic markets in the era of globalization. But why some nations are not so successful and even fail? Another secret of China’s miracle is China’s reform is pragmatic in a good way. China’s reform keeps a good balance between issue-driven motives and objective-driven motives. China’s reform maintains a fine trade-off between top-down design and cross-the-rivers-by-grasping-the stones.
Certainly, the interpretation above is not the whole reasons of China’s economic success and social development, because China is so big, China is so heterogeneous, and China is so diverse. But this is exactly the exciting point for your young brilliant scholars to explore. I strongly recommend you having more field-trips during your study, travelling around the whole China, investigating the farms and manufacturing plants, talking with workers, farmers, entrepreneurs, professors, students, and also government officials. Armed with such first-hand investigation and your academic research, opening your eyes and keeping independent thinking, you will have a better understanding of this vivid and dynamic land.
So Yenching Academy is the most ideal place for brilliant young scholars like you to realize such an opportunity. Here you have great chances to meet first-class professors in different disciplines who deeply understand China. Here, at Peking University, you also have plenty of time to interact with best and smartest students from the whole country. Here, you also have wonderful moments to enjoy the beautiful royal-courtyard campus. So, once again, please allow me to extend my warmest congratulations to you--dear new Yenching scholars!
Economic globalization and regional integration offer rich opportunity for people to exchange goods, service, and even ideas. On the one hand, as many other countries, China is beneficial from economic globalization. On the other hand, China also makes significant contribution to the world economic growth. China has already become one of the most important locomotives of global economic growth. Today China also works hard with other countries to support for the global free-trade system. With this system, every country gains from trade. People in the advanced countries enjoy better products at lower costs. People in the developing world find the job opportunity and eliminate poverty. Trade integration and economic globalization is one of the most fundamental mechanisms for the global prosperity and world peace.
So China’s success is unprecedented, but it can be copied by other countries. Certainly, one size does not fit all. Every country has its own culture and unique features. Different countries also face different development stages. However, since the end of the Second World War, the quests for peace, prosperity, and development have become the common dream for people in all countries. In this sense,we are in one world with one dream.
This is also the dream for all our Yenching scholars. I hope. We study here, not only for a better personal life. We study here for eliminating ignorance, for enriching our knowledge, but more importantly, for working for mankind. We study here to help people who are still in poor, who are still in ignorance, and who are still struggling in the dark side of their lives.
So, I hope that every Yenching scholars to devote yourselves to a community of shared future for mankind. If a person in this world is still poor, as we were. If a person in this globe still feel cold, as we done. Please discover your extraordinary talents, driven by passions and responsibility, to make the world a peaceful and prosperous place!
Welcome to Yenching Academy!