The Challenges for Economic
Development in the Future
LI Shantong
Development Research Center
the State Council, P.R.China
October 2004
1
Presentation Outline
z Economic
Growth and Structure
z Challenges
for Future Economic
Development
2004-10-20
2
China’s economy has been growing at a rate
of 9.3% annually since 1978
16.0%
50%
40%
12.0%
30%
8.0%
20%
4.0%
GDP Gr owt h Rat e
I nvest ment Rat e
0.0%
10%
0%
1978
1980
1982
1984
2004-10-20
1986
1988
1990
1992
1994
1996
1998
2000
2002
3
Economic and Social Development
z
Since 1978, China’s economy has been growing
at a rate of 9.3% annually
z
GDP reached 11669.4 Billion Yuan in 2003
z
Per capita GDP is $1000 according the official
exchange rate in 2003
2004-10-20
4
Economic Structure
100%
21.4%
80%
60%
48.5%
29.3%
43.9%
40%
20%
31.9%
33.7%
47.8%
51.7%
30.1%
26.8%
20.2%
14.5%
1980
1987
1994
2002
0%
Primary Industry
2004-10-20
Secondary Industry
Tertiary Industry
5
Employment Structure
100%
13.06
2.34
80%
17.80
4.52
21.02
4.74
15.85
17.70
28.60
5.28
16.03
60%
21.40
40%
68.75
59.99
49.68
20%
50.00
0%
1980
Primary
Industry
2004-10-20
1987
1994
Construction
2002
Teritary
6
China’s Economic Structure
z Share
of agriculture is decline since
1978
z Agricultural
sector account for 50% of
China’s labor employment
z Development
service sector lags behind
other countries
2004-10-20
7
Service sector lags behind
Comparison with Selected Developing Countries (2001)
Per capita GDP
Per Capita
GDP (US$, PPP)
(US$ ，official exchange
rate)
India
460
2450
Indonesia
680
2940
1750
4080
Jordan
Albania
1230
3880
Sri- Lanka
830
3560
Ukraine
720
4150
Morocco
1180
3690
2720
3650
Jamaica
Egypt
1530
3790
1050
4360
Philippines
China
890
4260
Source：
《World Development Report 2003 》, World Bank.
2004-10-20
Service share in
GDP（%）
48
37
73
24
55
45
53
63
49
54
33
8
Undeveloped China’s services sector
z
The relative slow growth since 1990
z
Much below compared with other countries at
same development level
z
The rising price indicates Supply Constraints
– Institutional drawback and government
regulation
– Human capital
2004-10-20
9
Low Urbanization Rate
1978
1980
1985
1990
1995
1998
1999
2000
2001
2002
Total Population
（million ）
962.59
987.05
1058.51
1143.33
1211.21
1247.61
1257.86
1267.43
1276.27
1284.53
2004-10-20
Urban Population
（ million ）
172.45
191.40
250.94
301.95
351.74
416.08
437.48
459.06
480.64
502.12
Urbanization Rate
（ %）
17.9
19.4
23.7
26.4
29.0
33.3
34.7
36.2
37.7
39.1
10
Low Urbanization Rate
Share of Urban Population in the Total（％）
World Average
Low Income Country
Middle Income Country
Low-Middle Income Country
High-Middle Income Country
High Income Country
China
United States
Japan
Germany
Malaysia
Indonesia
Philippine
2004-10-20
1980
39
24
38
31
64
75
20
74
76
83
42
22
38
1999
46
31
50
43
75
77
32
77
79
87
57
40
58
11
Regional Income disparity－－GINI coefficient
0.4
人均GDP
0.35
0.3
消费水平
0.25
0.2
人均收入
0.15
0.1
0.05
0
1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
2004-10-20
12
The Inequality in Household Income
Gini coefficient
Rural Gini
Urban Gini
National
CLD=0
National
CLD=10%[note]
1990
29.87
23.42
34.84
33.34
1993
33.70
27.18
41.96
40.18
1996
32.98
28.52
39.80
38.16
1997
33.12
29.35
39.79
38.21
1998
33.07
29.94
40.30
38.70
1999
33.91
29.71
41.64
39.97
Source: The World Bank staff estimation.
2004-10-20
13
The Inequality in Household Income
---The income gap between urban and rural households has
been widening steadily
9000.0
0.2
8000.0
0.18
7000.0
0.16
0.14
6000.0
0.12
5000.0
0.1
4000.0
0.08
3000.0
0.06
2000.0
0.04
1000.0
0.02
0.0
0
1978 1980 1985 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Value for Rural
Value for Urban
Growth for Rural
Growth for Urban
2004-10-20
14
The urban-rural income disparity has
been increased recently
￥ 9,000
3.5
3.23
￥ 8,000
3.11
2.8
￥ 7,000
2.57
￥ 6,000
2.42
2.58
2.5
2.4
2.29
2.2
￥ 5,000
2.12 2.17 2.17
1.95
2.86
2.79
2.71
2.90
3
2.65
2.51 2.47 2.51
2.5
2.2
2
1.82 1.83 1.86
￥ 4,000
1.5
￥ 3,000
1
￥ 2,000
0.5
￥ 1,000
￥0
0
1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
农村居民收入
2004-10-20
城市居民收入
城乡居民收入比（右坐标〕
15
Decomposition of regional income
disparity
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1997
1998
城乡之间差距
2004-10-20
2000
城城之间差距
2001
乡乡之间差距
2002
16
1996-2001 per capita GDP and GDP Growth
Y
0.55
闽
苏
鲁
0.50
鄂
藏
7.50
7.75
贵
冀
0.45
青
宁
皖蒙
8.00 8.25 8.50 8.75 9.00
陕
豫 湘
0.40 吉
赣 渝
黑
甘
辽
川
新
琼
晋
0.35
桂
浙
沪
津
京
粤
X
9.25
9.50
9.75
10.00 10.25
滇
0.30
2004-10-20
17
Growth of External Trade
1980-2003, external trade, export and import rose by 22.3,
24.2 and 20.6 times respectively and annual growth rates
were 14.5%、14.9% and 14.1% respectively
60.0
50.0
40.0
30.0
20.0
10.0
0.0
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
-10.0
-20.0
Export
2004-10-20
Import
Foreign Trade
18
Growth of External Trade
Export ($100 Mil. )
1978
2003
Import ($100 Mil.)
97.5
4382.3
108.9
4127.6
export
import
$100million
4500
4000
3500
3000
2500
2000
1500
1000
500
2004-10-20
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
1980
1979
1978
0
19
External Trade Dependence Ratio
0.6
0.5
0.4
0.3
0.2
0.1
0
1980
1982
1984
1986
Trade
2004-10-20
1988
1990
1992
Export
1994
1996
1998
2000
2002
Import
20
Structural Change of Chinese Exports
1980
2003
Primary goods ($100 Mil..)
91.14
348.1
Manufactured goods ($100 Mil)
90.05
4035.6
100%
90%
80%
70%
50%
66%
60%
84%
50%
91%
40%
30%
20%
50%
34%
10%
16%
9%
1994
2002
0%
1980
Primary Goods
2004-10-20
1987
Manufactured Goods
21
Structural Change of Chinese Imports
1980
2003
Primary goods ($100 Mil..)
69.59
Manufactured goods ($100 Mil)
130.6
727.8
3400.5
100%
80%
65.2%
60%
84.0%
85.7%
83.3%
16.0%
14.3%
16.7%
1987
1994
2002
40%
20%
34.8%
0%
1980
Primary Goods
2004-10-20
Manufactured Goods
22
Dualistic foreign trading regimes
100%
0.36
5.14
1.74
2.04
2.89
22.80
80%
47.36
55.27
60%
94.50
40%
75.16
50.91
20%
41.84
0%
1981
Ordinary Trade
2004-10-20
1987
1994
Processing Trade
2002
Other Trade
23
China’s economic structure and market
openness
z
China is a net exporter of labor-intensive
manufacturing products and a net importer of
capital-intensive manufactures
z
China is net importer of grain, but has trade
surplus of other agricultural products.
2004-10-20
24
Structure of Factor Endowments in China
China
6.7%
USA
23.3%
USA
13%
Land
China
28.8%
Capital
China
1.4%
USA
5.1%
S. Asia
17.4%
Labor
2004-10-20
25
Foreign Direct Investment
- was $53.5 Billion in 2003
600
180
160
500
140
120
400
100
300
80
60
200
40
20
100
0
0
-20
1983
1985
1987
1989
1991
FDI
2004-10-20
1993
1995
1997
1999
2001
2003
增长率
26
The Challenges of Economic Development
in the Future
z
The constrains of natural resources and
environment
−
Non tradable resources, such as land, water
−
Tradable resources
−
Environment problems
2004-10-20
27
The Challenges of Economic Development
in the Future
Popul at i on
4
Cul t i vat ed l and (10
hect are)
W
at er Resource (100
3
mil l i on m)
Forest Resource（100
3
mil l i on m）
Chi na
t ot al
Share（rel at i ve
t o t he worl d, ％）
12. 8
20. 7
13004
28255
124. 9
2004-10-20
9. 3
7. 0
2. 3
Per capi t a
Rat i o t o worl d
average（％）
0. 101
（hect are/ person）
3
2186（m/ person）
3
9. 7（m/ person）
45
25. 4
11. 1
28
The Challenges of Economic Development
in the Future
Mining Resource per capita
Ratio to the Pr oduct i Ratio to the
Ratio to the
World (%) consumption World (%)
Reserves World (%)
on
Crude Oil（kg）
1800
Natural Gas（m3） 1063
Coal (kg)
125000
Iron Ore (kg)
9880
Copper (kg)
13.2
Aluminum（kg）
283
2004-10-20
11
4.5
79
42
18
7.3
125
22
822
187
0.41
6.9
22
4.8
110
113
20
33
181
16.8
990
230
1.06
2.3
26
4.6
133
129
46
60
29
The Challenges of Economic Development
in the Future
GDP, China in the world total
4%
Crude Oil, consumed in China to the world total
7.4%
Coal, consumed in China to the world total
31%
Iron Ore, consumed in China to the world total
30%
Steel, consumed in China to the world total
21%
Aluminum, consumed in China to the world total
25%
Cement, consumed in China to the world total
40%
2004-10-20
30
The Challenges of Economic Development
in the Future
z
Aging Problem
Pressure on employment
−
New labor forces
−
Labor force transformation
z
z
Limitation of public resources
−
Basic education
−
Public health
−
Social security system
2004-10-20
31
The Challenges of Economic Development
in the Future
z
Income distribution
−
Rural and urban
−
Regional disparity
−
Different groups
−
Poverty (rural and urban)
z
Management
−
Central and local government
−
National Market integration
−
Banking System
2004-10-20
32
New Development Concept and
Five Considerations
z
z
z
z
z
Urban and Rural Development
Regional Development
Economic and Social Development
Development of Human and Natures
Opening and Domestic Development
2004-10-20
33
THANK YOU VERY MUCH!
2004-10-20
34
Table . Energy and environmental Matrix for Shijiazhuang Iron and Steel Co., Ltd
LEVEL
POLICY
SYSTEMS
AND
ORGANISING
MOTIVATION
INFORMATION
SYSTEMS
PROMOTION
INVESTMENT
4
Formal
energy
/
environmental policy
and
management
system, action plan and
regular review with
commitment of senior
management or part of
corporate strategy.
Energy / environmental
management
fully
integrated
into
management
structure.
Clear
delegation
of
responsibility for energy
use.
Formal and informal
channels of
communication
regularly exploited by
energy /environmental
manager and staff at all
levels
Comprehensive system sets
targets, monitors materials
and energy consumption and
wastes
and
emissions,
identifies faults, quantifies
costs and savings and
provides budget tracking
Marketing the value of
material and energy
efficiency and the
performance of energy
/
environmental
management
both
within the organisation
and outside it.
Positive discrimination in
favour
of
energy
/
environmental
saving
schemes with detailed
investment appraisal of all
new build and plant
improvement opportunities
3
Formal energy /
environmental policy,
but no formal
management system,
and with no active
commitment from top
management
Energy / environmental
manager accountable to
energy committee, chaired
by a member of the
management board
Energy / environmental
committee used as
main channel together
with direct contact with
major users
Monitoring and targeting
reports
for
individual
premises
based
on
sub-metering / monitoring,
but savings not reported
effectively to users
Programme of staff
training, awareness and
regular
publicity
campaigns
Same pay back criteria as
for all other investments.
Cursory appraisal of new
build
and
plant
improvement
opportunities.
2
Unadopted / informal
energyq
/
environmental policy
set by energy /
environmental
manager or senior
departmental manager
Energy / environmental
manager in post, reporting
to ad-hoc committee but
line management and
authority are unclear
Contact with major
users through ad-hoc
committee chaired by
senior
departmental
manager
Monitoring and targeting
reports based on supply
meter /measurement data and
invoices. Env. / energy staff
have ad-hoc involvement in
budget setting.
Some ad hoc staff
awareness and training
Investment using short
term pay back criteria
mostly
1
An unwritten set of
guidelines
Energy / environmental
management the part-time
responsibility of someone
with only limited influence
or authority
Informal
contacts
between engineer and a
few users
Cost reporting based on
invoice
data.
Engineer
compiles reports for internal
use
within
technical
department
Informal contacts used
to promote energy
efficiency and resource
conservation
Only low cost measures
taken
0
No explicit policy
No energy / environmental
manager or any formal
delegation of responsibility
for env / energy use.
No contact with users
No information system. No
accounting for materials and
energy consumption and
waste
No
promotion
of
energy efficiency and
resource conservation
No
investment
in
increasing environmental
performance / energy
efficiency in premises
Sintering plant
Raw ore
Purchased
coke
Mechanized
material
Purchased
fine
iron
powder
yard
Converter steel-making plant
Iron-making plant
Electric furnace steel-making
plant
No.1 rolling mill
Oxygen-making plant
No.2 rolling mill
No.3 rolling mill
Figure 1. Process flow diagram for Shijiazhuang Iron&Steel Co.Ltd
1