On January 20, 2024, the China Entrepreneur Summit (Beijing) and the first anniversary celebration of Peking University Entrepreneurship Training Camp was held at Peking University, the summit being one of the most important parts of the training camp’s activities. Professor Wang Bo, member of the Standing Committee of Peking University CPC Committee and Vice President and Professor Ye Jingyi, Deputy Director of the School Affairs Committee attended the event. Yu Minhong, general tutor of Peking University Entrepreneur Training Camp and Chairman of New Oriental Education and Technology Group, Liu Qiao, a famous economist and Dean of Guanghua School of Management of Peking University, and Li Wei, Vice President of Peking University Alumni Association and founding partner of Green Pine Capital Partners attended the event and gave keynote speeches.
The event was also joined by dialogue guests Su Wei, former Deputy Secretary-general of the National Development and Reform Commission and Chief Representative of China Climate Negotiations, Xuan Hong, General Manager of Zhongguancun Development Group, Hou Songrong, Chairman of Shenzhen Xiechuang Technology Group and member of the Shenzhen Committee of the CPPCC, Ma Bin, Vice President of Tencent Group and Feng Quanpu, Vice President of JD Group and head of Retail and Public Affairs Department.
Professor Yu Miaojie, a famous economist, deputy to the National People's Congress, member of the Standing Committee of the 14th National People’s Congress of Liaoning Province, Deputy Secretary of the CPC Committee and President of Liaoning University attended the event and gave a keynote speech.
“Dear President Wang Bo, Dear Secretary Ye Jingyi, Leaders, Teachers and Students, Good afternoon, everyone!
First, I would like to thank Peking University Entrepreneurship Training Camp for giving me the opportunity to return to my alma mater, so I am particularly happy today. This afternoon, I feel particularly rewarded. One of the biggest gains was listening to Mr. Yu Minhong's speech. I enjoyed it so much that I forgot what I should say. Fortunately, after listening to our Liu Qiao's speech full of rationality, that helped me gradually return to my rationality. So today I would like to share my views on China's economy.
Of two things I would like to talk about, one is how to look at China's economy. We know that the total economic output of China this year is 126 trillion RMB, an economic growth rate of 5.2%. The total foreign trade is 41.76 trillion RMB, and China’s foreign trade surplus is six trillion RMB, being the second largest economy in the world and the first in the world in terms of foreign trade. Those are the achievements we have made. Our question is how will China's economy behave in 2024? I would like to present my prediction and I hope it is right. I think China’s economic growth rate in 2024 has a potential of 5.3% -5.4%. So, I mean if China’s economy is doing well, the potential of 5.3%-5.4% is very possible. This is the first point. The second figure is that I think for China's foreign trade growth in 2024, the foreign trade surplus must be around six trillion RMB in 2024. How can we achieve that? In fact, the Central Economic Work Conference has given very clear instructions. I personally learned a lot from the report. So, I take this opportunity to share with you my understanding of the measures released at the Central Economic Work Conference this year. Everyone is free to make comments on what I say.
Five ‘adhere-tos’ are mentioned at the conference, and each one is equally important. The first is to adhere to the good relationship between overall development and security. Why does it matter? We know that as we are in a shifting period unseen within a century, the international environment is volatile and domestic reform and development tasks are arduous. Therefore, to achieve our economic goals this year, it is very important to properly handle the relationship between development and security. For security, we generally talk about five major securities, including food security, ecological security, energy security, industrial security, and even national defense security. At the same time, according to the information released at the Central Economic Work Conference, it is necessary to promote stability through progress. In other words, security is the premise of development while development is the guarantee of security. Only high-quality development can offer a high level of security. So how can we achieve stability through progress? The way is to establish new things first and break old ones later. In the Party's Report to the 20th CPC National Congress, we mentioned green development. There were two different ways to green development. One is to break old things first and then to establish new ones and the other is to establish new things first and break old ones later. By choosing the first way, if you phase out traditional energies without new energies provided, it will lead to insufficient supply. So, in that case, we should establish new things first and break old ones later. Specifically, our goal is to increase the proportion of non-fossil energies in primary energies.
That thinking in fact is not only applied in green development, but also in four other areas, including innovation, coordination, openness and sharing. For example, let me talk about how that concept is reflected in innovation. In fact, two very important things are mentioned in Dean Liu Qiao’s speech. One is to increase the proportion of innovation in GDP. We call it the proportion of R&D in GDP, namely the R&D intensity. Data showed that this year's figure is about 2.66%, almost equal to the level of OECD countries. More importantly, R&D consists of two parts, one being research and the other development. What we must do is to increase the proportion of research in R&D, that is, fundamental research, not applied research. Currently it is about 6.6% and our goal is to raise it to 7% in the 14th Five-Year Plan period. So, in innovation, what we are trying to establish is fundamental research. That explains why we emphasize the integration of production, education, research, and application.
Next let’s talk about how that thinking happens in coordination. Coordination matters in two aspects, namely urbanization and industrialization, which should be developed in harmony. For example, if urbanization develops rapidly but industrialization lags, what will the consequences be? South Africa is such a country with a rapid urbanization where many people come to work in the city, but where industrialization develops slowly without many jobs, leading to the presence of slums and affecting the stable development of the city and the country. Conversely, if industrialization develops too fast and urbanization goes slowly, many job opportunities will be offered but the labor force is in shortage. In this case, wages will rise and profits of enterprises will fall, which is bad for enterprises and affects sustainable development. So, what is China’s situation in this respect? At present, our industrialization is relatively fast, but urbanization is relatively slow. Therefore, using the principle of establishing new things first and breaking old ones later, we work to accelerate the construction of urbanization.
From a personal point of view, Dean Liu Qiao just talked about increasing the proportion of disposable personal income in total income, which requires the government to reduce taxes and fees. Then another thing is to expand the number of middle-income groups and increase the level of middle income. This year's Central Economic Work Conference is highlighted in three aspects, one of which is the trade of intermediate goods, which is particularly important. There was no such reference before. Then another two things highlighted are green trade and digital trade.
Another thing is to firmly stick to the primary strategic task of high-quality development and the strategic task of the new development paradigm. High-quality development means development in a high-quality manner, which includes four aspects, namely production, circulation, consumption, and distribution. Today, due to time constraints, I will only talk about one aspect. If China wants to become a big country in production, a strong country in production and manufacturing, high-quality production will be very essential. High-quality development in production also includes six aspects, such as the improvement of added value of products, quality improvement, the improvement of total factor productivity and so on. High-quality production also means industrial agglomeration. We can see that China has many industrial cities and they are famous for their own businesses. For example, Shenzhen is famous for electronics while Dongguan for machinery, right? The situation is also similar in North China because industrial clusters are very important. The sixth point of high-quality development is that the three major industries must develop reasonably and harmoniously. Now, our primary industry comprises 7.5% of the economy, the secondary industry is 39% and the tertiary industry is 53%. Why do we attach great importance to the development of the real economy in China? Because the manufacturing industry of the real economy is the carrier of innovation and is the first source of innovation. Only when we have a good real economy can we avoid the possibility of falling into the middle-income trap.
We must also grasp supply-side structural reform to solve the issue of insufficient effective demand. Currently the global economy is relatively weak, so solving insufficient effective demand is very critical. And in fact, I personally think that we have a batch of tools we can use this year to solve the problem. Now both China and the global world are in a state where the economy is relatively low and our price level is relatively low, which is very favorable for our traditional macro policy. In other words, this year, we can make progress by conducting a proactive fiscal policy and a prudent monetary policy. Economic theories tell us that if the economy is in a downturn, fiscal policy is very effective. Of course, it must be accompanied by easing monetary policy. What does our supply-side structural reform aim to do? It is to cultivate new quality productivity, which can be achieved by improving the productivity of enterprises. Some training programs, such as on-the-job training are very important.
Additionally, we must adhere to a right relationship between reform and opening up. For domestic reform, we only do one thing, which is to build a unified domestic market. In other words, the positive side of China's economy is not that China's labor costs are relatively cheap, but China can form a super-large domestic demand market. To achieve that, we basically have four things to do. The first is to build a unified factor market, which enables various factors to flow freely and in an orderly way in China, for example, capital, land, labor, energy, and data. Our goal is to form a unified domestic market with consistent quality, production lines and standards. Therefore, we must reduce all kinds of tangible or intangible costs, really improve the business environment and optimize the business environment. Local governments at all levels and market supervision departments can also play an active role to make sure that we have laws to abide by and the laws must be strictly enforced. Those who violate the laws will be accountable. For opening measures, the first thing is the diversification in export destinations. As European and American markets are relatively more mature, we can focus on markets in developing countries, such as Southeast Asian countries. The second is to expand the import scale. Import is as important as export so that more consumer goods can be imported into China, which is conducive to enhancing our sense of happiness. Thirdly, for service trade, we should expand the total volume, adjust the structure, and cultivate uniqueness. Expanding the total amount can be achieved by adjusting the structure to reduce the deficit, especially in education. After I went to work in Liaoning University, I applied the practices of discipline construction at Peking University to Liaoning University. Seeking uniqueness means that we can do a good job in promoting our traditional Chinese medicine in the service trade, for example. The fourth is foreign direct investment to make sure that Chinese enterprises can go out, go deep, and go to a higher level. We have done a good job in going out with an annual flow of 135 billion USD. Going deep means that we need to further promote what we have done in foreign countries to forge a good relationship with local people. Going to a higher level calls for Chinese enterprises to pursue markets, technologies and other advanced resources. The fifth point is about opening up to the outside world by conducting differentiated strategies under the Belt and Road Initiative. For the BRI, personally, I have always insisted that we should work in two different ways. The focus of the Land Silk Road should be given to the eastern countries rather than the western as we can see the rising tensions between Russia and Ukraine as well as the conflict between Israel and Palestine makes it unrealistic to encourage Chinese enterprises to invest on the Land Silk Road. For the Maritime Silk Road, priorities should be given to the construction of China-Japan-Korea FTA.
Lastly, I want to talk about the biggest political task of China’s modernization. As China’s modernization is extensive and profound, today I only talk about strengthening the construction of spiritual civilization. I have been saying that colleges and universities can play a greater role as an important carrier to promote spiritual civilization. Colleges and universities are designed to impart knowledge and cultivate one’s morality to make sure that what one does is in line with what one thinks. Like the work of our teachers and classmates at Peking University, even though it is not something big, gradually it exerts a huge effect.
Finally, I also want to take this opportunity to wish you all a happy New Year and all the best. I wish you success in your career and happiness in your family. Thank you all.”
The audience at the meeting said that Professor Yu Miaojie's speech was highly and level, which benefited a lot.
