论文部分内容阅读
Grain security
Han Jun, Deputy Director of the Development Research Center of the State Council
China has reaped bumper grain harvests for seven consecutive years. In 2010, the country’s grain output reached 545.8 million tons. Despite the success, China still faces daunting challenges to ensure grain security for the following three reasons.
First, natural conditions for harvesting grain are fragile. Second, farmers have fewer incentives to plant more grain since the benefits are low, and, without government intervention, the balance of supply and demand will be shattered. Third, supplies of rice and wheat are being stretched thin.
Four major factors are posing a huge threat to China’s grain security: land shortages, water scarcity, weak seed businesses and a capital bottleneck.
China only has 16 billion mu (1.07 billion hectares) of arable land for grain, and the area is shrinking while the population continues growing. Worse still, China has to deal with a serious quality problem of the farmland in some regions.
China has made significant progress in harnessing large rivers and their irrigated areas, but the inputs in rural areas are limited. The government’s investments are insufficient, and farmers are less motivated to improve local irrigation systems. That is one of the major causes for the floods and drought disasters that have troubled China in recent years.
China’s seed industry is highly fragmented. There are more than 8,000 seed companies in the country, but most of them lack the capability for independent research and development. In China, the top 10 seed firms only take up 13 percent of the market share, while the largest two U.S. seed companies—Monsanto and Pioneer—control 60 percent of the U.S. market, and these two gi- ants have expanded their footprint in China.
The biggest challenge is soaring costs of planting. As labor cost grows, it is difficult for farmers to increase output and productivity. To deal with this, the government must hand out generous subsidies, otherwise grain shortages would occur.
As global grain supplies tighten, China will be less able to rely on imports to soothe domestic pressures. The country now accounts for more than 20 percent of the world’s grain consumption and at least 25 percent of global grain imports. But the global grain market is experiencing increasing volatility and high prices, as well as short supplies. In 2008, an acute grain crisis struck the world, pushing up prices. The global povertystricken population has hit a record high since the 1970s because grain prices have become unaffordable for the poor.
The goal for China is to rely on domestic production to meet 90 percent of its demands for grain. Achieving this will require China to take the following solid steps:
First, reinforce support to agriculture and protect grain production. The government’s finance on public welfare has yet to benefit all farmers, and efforts are still needed to bump up investments in rural areas.
Second, the country must step up direct subsidies to farmers to boost their interest in farming.
Third, the household contract responsibility system must be strengthened. China has allowed contracted households to transfer the right of land use to other households or organizations. But the government must prevent enterprises from massively scooping up farmland.
Financial safety
Liu Ya, Vice President of the University of International Business and Economics
Financial safety has four aspects: financial stability, financial sovereignty, financial independence and financial innovation. Financial innovation is a double-edged sword—it is a driving force for the development of the financial industry and also a threat to the present regulation system. Before the new regulation system is estab-
lished, the innovations might have enormous negative impacts on financial stability.
For China, it is imperative to keep tight control over financial risks. Financial risks may lead to insolvency of financial institutions, a banking crisis or even a deeper credit meltdown.
In addition, the country needs to safeguard its financial sovereignty. In the past decades, China has been gradually opening up its financial industry to the rest of the world. A number of foreign institutions are pouring in, and many have enjoyed a growing market presence and influence.
Once foreign financial institutions and investors dominate a country’s financial industry, it will severely affect the independence of the country’s financial regulation, monetary policies and even financial sovereignty. Greece, for example, is reeling from limited financial independence as its sovereign government debts were massively purchased by foreign investors.
At the international level, it is important for China to have a greater say in both the global financial system and the global financial market, and have greater pricing power in financial derivatives.
The International Monetary Fund (IMF) and the World Bank have played a leading role in the world’s financial affairs. As a result, representation in the two organizations is key to a country’s international financial influence.
Since the overwhelming financial crisis in 2008, China’s status in the international financial system has been growing. For instance, Zhu Min has recently taken office as deputy managing director of the IMF, and Justin Lin Yifu has become senior vice president of the World Bank.
Meanwhile, during the internationalization process of the renminbi, China should take control of the pricing power of renminbi-denominated financial derivatives. Some countries like the United States and Singapore have staged offshore renminbi derivative products, but China has yet to gain any influence in the pricing of those products.
China is making stiff efforts to build an effective regulatory mechanism to guard against possible risks. But the problem is how to strengthen coordination between the four major regulators in the country’s financial sector: China Securities Regulatory Commission, China Banking Regulatory Commission, China Insurance Regulatory Commission and the central bank.
In addition, China faces the task of improving the currency exchange rate regime and foreign exchange management system, in a bid to avoid external shocks and international hot money inflows.
Manufacturing strength
Huo Jianguo, President of the Chinese Academy of International Trade and Economic Cooperation China’s economic competitiveness mainly stems from its advantages in the manufacturing industry, exports and foreign exchange reserves. But even the competitive manufacturing industry and foreign trade sector are struggling with many deep-rooted ailments.
China is currently in the middle and later stage of industrialization, and its manufacturing industry is likely to overtake that of the United States as the world’s largest. However, many industries of the country are still engaged in lower-end production. The country suffers from the weak ability to produce some key components and parts, and relies on imports to meet the needs of most higher-end equipment.
In China, foreign companies have dominated the middle and high-end manufacturing sector. That means core technologies and innovations are not in the hands of China.
In terms of foreign trade, Chinese companies are large in size and boast big market shares, but their weakness lies in the capability for value creation. China seems to have been caught in a “manufacturing trap.”Upgrading the manufacturing industry and moving up the value chain have become a top priority for the national economy during the 12th Five-Year Plan (2011-15) period.
Governments at all levels in China are supposed to take swift and solid actions to propel economic rebalancing. The current world economic situation has provided a sound opportunity for China to adjust its economy toward more sustainable growth.
A significant step is to attach great importance to the strategic emerging industries including those engaged in new energies, environment protection and bio-pharmaceutics. If China had pumped heavier investments in those industries in 2008, it would have been easier for the country to push forward industrial restructuring. Better late than never. China still has an opportunity to sharpen the core competitive edge of the manufacturers.
The country could increase imports of advanced equipment or lower import tariffs for Chinese companies to lay a solid foundation for a boom in strategic emerging industries. Moreover, increased imports would also help cure the acute problem of trade imbalance.
Meanwhile, it is necessary to encourage Chinese firms to broaden their footprint overseas. The country is supposed to smooth the way for private firms to go global. Efforts are also needed to heighten financing support for state-owned enterprises’ overseas mergers and acquisitions. But these companies must keep alert over possible risks.
Generally, multinationals are defined as those firms sourcing at least 40 percent of profits from overseas markets. So China has very few real multinationals. The country needs to support Chinese firms building overseas sales networks. Only when China owns a number of multinationals can it become a powerful economy.
Han Jun, Deputy Director of the Development Research Center of the State Council
China has reaped bumper grain harvests for seven consecutive years. In 2010, the country’s grain output reached 545.8 million tons. Despite the success, China still faces daunting challenges to ensure grain security for the following three reasons.
First, natural conditions for harvesting grain are fragile. Second, farmers have fewer incentives to plant more grain since the benefits are low, and, without government intervention, the balance of supply and demand will be shattered. Third, supplies of rice and wheat are being stretched thin.
Four major factors are posing a huge threat to China’s grain security: land shortages, water scarcity, weak seed businesses and a capital bottleneck.
China only has 16 billion mu (1.07 billion hectares) of arable land for grain, and the area is shrinking while the population continues growing. Worse still, China has to deal with a serious quality problem of the farmland in some regions.
China has made significant progress in harnessing large rivers and their irrigated areas, but the inputs in rural areas are limited. The government’s investments are insufficient, and farmers are less motivated to improve local irrigation systems. That is one of the major causes for the floods and drought disasters that have troubled China in recent years.
China’s seed industry is highly fragmented. There are more than 8,000 seed companies in the country, but most of them lack the capability for independent research and development. In China, the top 10 seed firms only take up 13 percent of the market share, while the largest two U.S. seed companies—Monsanto and Pioneer—control 60 percent of the U.S. market, and these two gi- ants have expanded their footprint in China.
The biggest challenge is soaring costs of planting. As labor cost grows, it is difficult for farmers to increase output and productivity. To deal with this, the government must hand out generous subsidies, otherwise grain shortages would occur.
As global grain supplies tighten, China will be less able to rely on imports to soothe domestic pressures. The country now accounts for more than 20 percent of the world’s grain consumption and at least 25 percent of global grain imports. But the global grain market is experiencing increasing volatility and high prices, as well as short supplies. In 2008, an acute grain crisis struck the world, pushing up prices. The global povertystricken population has hit a record high since the 1970s because grain prices have become unaffordable for the poor.
The goal for China is to rely on domestic production to meet 90 percent of its demands for grain. Achieving this will require China to take the following solid steps:
First, reinforce support to agriculture and protect grain production. The government’s finance on public welfare has yet to benefit all farmers, and efforts are still needed to bump up investments in rural areas.
Second, the country must step up direct subsidies to farmers to boost their interest in farming.
Third, the household contract responsibility system must be strengthened. China has allowed contracted households to transfer the right of land use to other households or organizations. But the government must prevent enterprises from massively scooping up farmland.
Financial safety
Liu Ya, Vice President of the University of International Business and Economics
Financial safety has four aspects: financial stability, financial sovereignty, financial independence and financial innovation. Financial innovation is a double-edged sword—it is a driving force for the development of the financial industry and also a threat to the present regulation system. Before the new regulation system is estab-
lished, the innovations might have enormous negative impacts on financial stability.
For China, it is imperative to keep tight control over financial risks. Financial risks may lead to insolvency of financial institutions, a banking crisis or even a deeper credit meltdown.
In addition, the country needs to safeguard its financial sovereignty. In the past decades, China has been gradually opening up its financial industry to the rest of the world. A number of foreign institutions are pouring in, and many have enjoyed a growing market presence and influence.
Once foreign financial institutions and investors dominate a country’s financial industry, it will severely affect the independence of the country’s financial regulation, monetary policies and even financial sovereignty. Greece, for example, is reeling from limited financial independence as its sovereign government debts were massively purchased by foreign investors.
At the international level, it is important for China to have a greater say in both the global financial system and the global financial market, and have greater pricing power in financial derivatives.
The International Monetary Fund (IMF) and the World Bank have played a leading role in the world’s financial affairs. As a result, representation in the two organizations is key to a country’s international financial influence.
Since the overwhelming financial crisis in 2008, China’s status in the international financial system has been growing. For instance, Zhu Min has recently taken office as deputy managing director of the IMF, and Justin Lin Yifu has become senior vice president of the World Bank.
Meanwhile, during the internationalization process of the renminbi, China should take control of the pricing power of renminbi-denominated financial derivatives. Some countries like the United States and Singapore have staged offshore renminbi derivative products, but China has yet to gain any influence in the pricing of those products.
China is making stiff efforts to build an effective regulatory mechanism to guard against possible risks. But the problem is how to strengthen coordination between the four major regulators in the country’s financial sector: China Securities Regulatory Commission, China Banking Regulatory Commission, China Insurance Regulatory Commission and the central bank.
In addition, China faces the task of improving the currency exchange rate regime and foreign exchange management system, in a bid to avoid external shocks and international hot money inflows.
Manufacturing strength
Huo Jianguo, President of the Chinese Academy of International Trade and Economic Cooperation China’s economic competitiveness mainly stems from its advantages in the manufacturing industry, exports and foreign exchange reserves. But even the competitive manufacturing industry and foreign trade sector are struggling with many deep-rooted ailments.
China is currently in the middle and later stage of industrialization, and its manufacturing industry is likely to overtake that of the United States as the world’s largest. However, many industries of the country are still engaged in lower-end production. The country suffers from the weak ability to produce some key components and parts, and relies on imports to meet the needs of most higher-end equipment.
In China, foreign companies have dominated the middle and high-end manufacturing sector. That means core technologies and innovations are not in the hands of China.
In terms of foreign trade, Chinese companies are large in size and boast big market shares, but their weakness lies in the capability for value creation. China seems to have been caught in a “manufacturing trap.”Upgrading the manufacturing industry and moving up the value chain have become a top priority for the national economy during the 12th Five-Year Plan (2011-15) period.
Governments at all levels in China are supposed to take swift and solid actions to propel economic rebalancing. The current world economic situation has provided a sound opportunity for China to adjust its economy toward more sustainable growth.
A significant step is to attach great importance to the strategic emerging industries including those engaged in new energies, environment protection and bio-pharmaceutics. If China had pumped heavier investments in those industries in 2008, it would have been easier for the country to push forward industrial restructuring. Better late than never. China still has an opportunity to sharpen the core competitive edge of the manufacturers.
The country could increase imports of advanced equipment or lower import tariffs for Chinese companies to lay a solid foundation for a boom in strategic emerging industries. Moreover, increased imports would also help cure the acute problem of trade imbalance.
Meanwhile, it is necessary to encourage Chinese firms to broaden their footprint overseas. The country is supposed to smooth the way for private firms to go global. Efforts are also needed to heighten financing support for state-owned enterprises’ overseas mergers and acquisitions. But these companies must keep alert over possible risks.
Generally, multinationals are defined as those firms sourcing at least 40 percent of profits from overseas markets. So China has very few real multinationals. The country needs to support Chinese firms building overseas sales networks. Only when China owns a number of multinationals can it become a powerful economy.