1 Lecture Two and Three Industrial Development in China Prof. Xingmin Yin China Center for Economic...
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- Slide 1
- 1 Lecture Two and Three Industrial Development in China Prof.
Xingmin Yin China Center for Economic Studies Fudan University
- Slide 2
- 2 Contents 1. Introduction 2. Industrial Structure in General
3. Industrial Development Strategy 4. Growth of Manufacturing
Exports 5. Industrial Restructuring 6. The Future of China s
Industry Questions
- Slide 3
- 3 1.Introduction China is a developing country with huge
population. Its GDP per capita in 2000 was only $950 at official
exchange rate, and increased to about $3200 in 2008. During past 30
years, the big change in Chinese industry and economy was taken
place and had an extraordinary influence on the world economy. It
increased its share of world merchandise exports from 0.95% in 1980
to 4.12% in 2002, to 5.8% in 2003, and further to 8.7% in 2008
respectively. China s success at exporting has led to account
surpluses since 1994. The volume of foreign exchange reserves has
accumulated into US$ 1.95 trillion up to early 2009.
- Slide 4
- 4 Historical Experience Three Stages for Structure Changes
Agriculture dominance in economy The sector transformation from
agriculture to manufacturing industry, and 1000 USD per capita as
indicator. The contribution of science and technology to industry
is increased, and service sector will expand its scale to society.
Market demand is the major driving force for structural
changes
- Slide 5
- 5 Market Demand for Industrial Development The household income
has increased greatly in the past decade. The changes of consumer
behavior have a strong influence on firm s production What kind of
products and service will be preferred by households?
- Slide 6
- 6 Walt W. Rostow View It is possible to identity all societies,
in their economic dimensions, as lying within one of five
categories: the traditional society, the pre-conditions for
take-off into self-sustaining growth, the take-off, the drive to
maturity, and the age of high mass consumption Can we apply this
point of view to analyze China?
- Slide 7
- 7 2. Industrial Structure in General Industry accounts for 43
percent of total GDP; and 91 percent of exports. Industrial
capacity, especially new technology- intensive sectors, has
expanded rapidly and also based on huge investments. The rise of
China as a major trade player and industrial power raises many
issues for China as well as developing countries.
- Slide 8
- 8 Development Issues The importance of macro-management in
economic development. The success of export-orientation strategy or
import liberalization strategy. The development targets for
labor-intensive or technology-intensive industries. The role of
industrial sophistication to China s integration into the world
economy. Changes of industrial structure in China.
- Slide 9
- 9 Growth Rates of China s GNP, Industry, Service and CPI
(1978-2008)
- Slide 10
- 10 Comments The industry made a great contribution to China s
economy progress. The growth rate of industry was 14.8% in 2007.
How to understand the lower growth rate of service sector that was
taken place in the last decade? Is it sustainable for China s
economy growth? Can the central government control the growth rate
in development?
- Slide 11
- 11 Macroeconomic Management The macro scorecard for China is
remarkably strong on an absolute as well as on a relative scale.
Three aspects of China s performance are especially worthy to note.
Its GDP growth rate over 30 years is among the highest one on
record. Although the pace of expansion was unusually rapid,
inflationary pressure was largely absent in the most years.
Industry has remained the leading sector since 1984. During the
past two decades, industry has grown by above 12 percent per
annum.
- Slide 12
- 12 Composition of GDP and Employment by Sectors in China
YearAgricultureIndustryConstructionServices Composition of GDP
197828.444.73.923.0 199027.137.04.631.3 200312.840.55.541.2
200711.343.05.640.1 Composition of Employment 197870.715.42.211.7
199060.017.14.318.6 200349.116.15.529.3 200740.826.8 32.4
- Slide 13
- 13 Industry is the largest sector in terms of GDP. The role of
agriculture to GDP has decreased from 27.1% in 1990 to 11.3% in
2007. The rural labor force still accounts for 40.8% of the
national employment, by decreasing 30 percentage points in the past
30 years, and will further to reduce under a new urbanization
policy.
- Slide 14
- 14 Discussion At present, the contribution of employment
provided by service sector is very limited due to its support share
in GDP, showing the absolute underdevelopment. There exists a huge
gap between China s capacity to produce goods and its ability to
provide economic and social services. Aside from the economic
development, the raising of people s standard of living should be
the main way to expand the employment in services sector in the
coming decades.
- Slide 15
- 15 3. Industrial Development Strategy Most Latin America
countries posses more advanced industrial sectors. But in the 1970s
and 1980s, economies like Singapore and Republic of Korea greatly
accelerated the growth of their manufacturing output. Does China
follow this strategy? In terms of sheer size, China has the largest
manufacturing sector in the developing countries, but this sector
is nevertheless relatively small in relation to the nation s
enormous rural population.
- Slide 16
- 16 Industrialization strategy in China Can you define the major
features of China s industrialization strategy?
- Slide 17
- 17 A. Growth of Industrial Output Industry has been the most
important driver for China s economic growth. The value of
industrial output was only RMB160.7 billion in 1978 and RMB685.8
billion in 1990. Industrial output increased 3.24 times over the
period 2001-2007. By the first quarter 2009, industry output
(including construction) reached RMB3.2 trillion, accounting for
48.62% of GDP.
- Slide 18
- 18 Growth of Industrial Value-added Billion RMB
- Slide 19
- 19 Discussion The higher growth rate of manufacturing industry,
the higher of GDP growth rate emerges in China s industrializing
process. Do you have any comments on China s industrial development
in the past decades? How do you understand the role of
industrialization to developing countries?
- Slide 20
- 20 Recent Case Discussion: Industrial Output and Labor
Growth
- Slide 21
- 21 Business Cycle and Industrial Growth Will Chinese economy be
recovery through traditional industrialization during the global
downturn caused by the US financial crisis? Discussion on
historical case.
- Slide 22
- 22 B. Growth of Industrial Assets The growth rate of industrial
assets has been lower than that of industrial output. The growth of
industrial assets was not as high as expected in comparison to
industrial output. Industrial assets increased 1.15 times, from
RMB7923.4 billion to RMB13540.3 billion over the period 1995-2001.
However, industrial asset has increased its growth rate since 2003,
which shows the new feature of industrial fixed-asset
investment.
- Slide 23
- 23 Growth of Industrial Assets RMB Billion
- Slide 24
- 24 More fixed-asset investments have been flowed into steel
production, machinery, electronics, and transportation equipment
industries. General trends for manufacturing investment booming in
the past eight years.
- Slide 25
- 25 C. Growth of Labor Productivity Explanation on productivity
The rising of industrial competitiveness is strongly related with
the growth of labor productivity in manufacturing sector. Different
growth rates for industrial output and labor
- Slide 26
- 26 Growth of Labor and Output in Some Manufacturing Industries
Industry or Products19952000 2007 Textile labor, 0000
persons673.00327.00626.26 Yarn (10,000 tons)542.20657.002068.17
Apparel labor, 0000 persons175.00120.00414.19 Steel industry labor,
0000 persons346.00222.00304.43 Rolled steel (10,000
tons)8979.801314656561 Transportation equipment
industry370.00244.00408.59 Passenger cars33.7060.70479.78
Electronics& Telecommunication172.00138.00587.92 Integrated
circuit (trillion units)5.5175.88041.12 Micro-computer (10,000
sets)83.57672.0012073.38 General machinery labor, 0000
persons405.00222.00420.71 Metal-cutting machine tool (10,000
units)20.3417.6664.7 Manufacturing labor, 0000
persons5439.003240.007875.20
- Slide 27
- 27 Discussion Industrial products increased more rapidly than
labor force in all manufacturing industries over the surveyed
period. Comparison on industrial output and labor productivity
between China and US over the period 1998-2007.
- Slide 28
- 28 Growth of Industrial Outputs 19982005 Changes (fold) US
China US,% China Manufacturing 3987 708 3993 2659 0.16 2.76
Textiles 91 53 61 155-33.45 1.93 Chemicals 422 82 478 283 13.45
2.44 Base metals 172 67 172 359 -0.25 4.39 Machinery 279 54 255 204
-8.58 2.75 IT products 443 59 338 330-23.74 4.58 Transportation 637
51 599 192 -6.97 2.77 US$ billion.
- Slide 29
- 29 Labor Productivity 19982005 Changes (Fold) US China US, %
China Manufacturing 80868 3786 95524 12779 18.2 2.78 Textiles 42219
2123 56252 6693 33.3 2.12 Chemicals 164561 3414215297 15769 30.8
3.62 Base metals 81964 3975117990 24530 44.0 5.17 Machinery 78124
2476 85824 10199 9.86 3.12 IT products 93788 7300 92603 15889 -1.26
1.18 Transportation 86590 3866 83822 13269 -3.20 2.43 US$ per
person/year.
- Slide 30
- 30 Discussion Difference of growth rates in manufacturing
sectors. China s labor productivity in manufacturing increased 2.78
folds, while that of US increased 18.2% over the period 1998-2005.
Furthermore, labor productivity in China s manufacturing increased
52.71% from 2005 to 2007.
- Slide 31
- 31 However, the productivity of the US has much higher than
that of China in manufacturing industries. Thus, the productivity
gap between USA and China is still very large.
- Slide 32
- 32 D. Output of Major Industrial Products Assessments on the
achievement of industrialization in China. Analysis of industrial
products.
- Slide 33
- 33 a. Energy Product 197819922007Growth (times) 78-92, 92-2007
Coal, billion tones 0.621.122.53 0.81 1.26 Crude Petro-oil Million
tones 104142186 37% 31% Electricity Billion kwh 25.6675.39328.16
1.94 3.35
- Slide 34
- 34 b. Intermediate Products 197819922007Growth (times) 78-92,
92-2007 Chemical fiber, million tones 0.292.1324.14 6.49 10.33
Yarn, million tones 2.385.0220.68 1.11 3.12 Cloth, billion meters
11.0319.0767.53 0.73 2.54 Paperboard, mil tones 4.3917.2577.92 2.93
3.52 Sulfuric acid, mil. tones 6.6114.0954.13 1.13 2.84 Aluminum,
mil. tones 0.400.8512.28 1.13 13.45 Steel, million tones
22.0866.97565.6 2.03 7.45
- Slide 35
- 35 Growth of Steel Products 10,000 tones
- Slide 36
- 36 Growth of Aluminum 10,000 tones
- Slide 37
- 37 c. Capital Products Products197819922007 Growth (times)
78-92, 92-2007 Metal-cutting machine tools, 000 18.322.964.7 0.25
1.83 Motor vehicles, mil. units0.151.078.89 6.15 7.33 Passenger
cars, mil. units0.050.164.80 28.94 28.67 Air-conditioners, mil.
sets /1.5880.14 / 49.71 Micro-computers, mil. units /0.13120.7 /
956.00
- Slide 38
- 38 Growth of Automobiles 10,000 units
- Slide 39
- 39 Discussion Industrial output in China has been experiencing
a rapid wave of increases since 1992. What we can learn from the
expansion of industrial capacities in the developed countries?
- Slide 40
- 40 d. International Comparison on Industrial Products The
potential demand for industrial products will be larger than our
expectation today. The case of Japan may be useful for the
estimation of China s industrial capacity. Value of per capita: to
estimate China s industrial capacity in the coming decades.
- Slide 41
- 41 Electricity, % of the World (Billion kwh)
19781991/9220052005, per capita World768812034181842824.6 kwh
USA29.125.623.314301.1 Japan7.37.46.28875.3 EU15.816.615.17506.0
Soviet/Russia15.614.76.34944.9 India0.152.43.7620.3
Brazil0.152.02.22172.2 China3.345.613.61879.1
- Slide 42
- 42 Steel, % of the World (Million tones) 19781991/9220052005,
per capita World, mil. tones 7136871132176 kg USA17.412.78.3315
Japan14.316.09.9877 EU18.719.814.4537 Soviet/Russia21.220.45.8462
India1.42.42.628 Brazil1.73.32.8171 China3.110.331.2270
- Slide 43
- 43 Motor Vehicles, % of the World 19781991/922005 unit/10,000
persons World: mil. units43.5847.2066.53103 USA29.5520.6117.92402
Japan21.2026.6316.23845 Germany9.6411.108.65698
Soviet/Russia4.764.061.9189 India/0.722.0913 Brazil/2.073.49125
China0.342.268.5844
- Slide 44
- Discussion A growing economy is real good news for industrial
growth. Growth of affordable income: GDP per capita in China will
increase from US$3,200 in 2008 to US$5,000 in 2015. By 2020, China
will continue to drive the global demand and possibly produce 25
million vehicles, accounting for 20% of global production.
- Slide 45
- 45 e. International Comparison on Sectoral Employment Is it
possible for China to create more jobs for its huge population?
What lessons can be learned from the developed countries?
- Slide 46
- 46 Employment Structure by Industry (Labor force, 1999)
IndustryChinaUSAJapanGermany Employment, 10,000 705861334964623642
Primary33493341335102 Mining66756616 Manufacturing810920071345853
Public utility2851473831 Construction3412899657315
Service24620989940812325
- Slide 47
- 47 Employment Structure by Industry (%,1999)
IndustryChinaUSAJapanGermany Employment, %100.00
Primary47.452.565.182.80 Mining0.940.420.090.44
Manufacturing11.4915.0320.8223.42 Public utility0.411.100.590.85
Construction4.836.7310.178.65 Service34.8874.1663.1563.84
- Slide 48
- 48 Observations In view of percentage, Germany and Japan
provides more jobs in manufacturing industry in comparison with
that of the USA. China still needs to create more jobs for rural
labor force in non-primary sector. The USA is a service-oriented
economy. In which year, will China enter into the middle- income
country with GDP 10,000(USD) per capita?
- Slide 49
- 49 4. Growth of Manufacturing Exports China s sudden rise as a
global trading power has been greeted with a curious mixture of
both admiration and fear. As an open economy and a large importing
country, China has opened its door for foreign firms to develop new
markets for their goods and services, especially high-value-added
products such as aircraft, software, industrial design, advanced
machinery, and components such as semiconductors and integrated
circuits.
- Slide 50
- 50 It is estimated that China would be the largest exporter
within a short period such as ten years, even five years in the
world market, both developing and developed economies. If it is
true, what is a real effect on the global pattern? What can we
learn from the past experience? Brief discussion on trade
strategy
- Slide 51
- 51 A. Trade Liberalization China s trade liberalization was
part of a wider strategy of achieving stability and efficient
resource allocation in the past 30 years, especially in the last 10
years. The pursuit of a policy of industrialization took a gradual
liberalization in tariffs and import quota controls as a means of
integrating into the world economy. China s import/GDP ratio back
in 1978 was 5.17 percent. Since 1978 or so, the figure has been in
excess of 35 percent (in 2007). Trade has been substantially
liberalized in the 1990s. The average tariff has been brought down
from 55.6 percent in 1982 to 44.1 percent in 1991, and further to
13 percent for industrial products in 2001. The average tariff has
been lowered to 5.4 percent in 2007.
- Slide 52
- 52 The Timetable of Trade Liberalizations
Tariff1982199119982005 2007 Categories1721 22
Maximum104.9%90.8%28.7% Average55.6%44.1%17.1%9.4% 5.4%
- Slide 53
- 53 Discussion It is well-known proposition that reducing
certain tariffs, as opposed to eliminating all of them, is a more
practical way for China to join the world trade system. The above
table gives an impression of the openness of the Chinese economy.
The import tariffs on various categories has been decreased in the
China s entry of WTO, such as the tariffs on vehicles and its parts
had been reduced to 25% and 10% respectively by 2005. After joining
the WTO, China decreased the tariffs on IT products to zero.
- Slide 54
- 54 B. Trade as Powerful Driving Force By reducing tariffs and
increasing industrial competitiveness, China has converted itself
from an importer to an exporter of certain technological products,
for example, until the middle of the 1990s, China imported
household electric appliances, but it is gradually turning into an
exporter of these products since around of the late 1990s. From
1992 to 2000, China s trade grew by 12 percent per annum, since
overall growth in GDP was about 9 percent per year, this implies
that trade became substantially more important to the Chinese
economy. During the period 2002-2008, China s exports grew by about
20 percent, while economic growth was 12 percent per annum.
- Slide 55
- 55 External Trade Performance in China (1978-2008) US$
Billion
- Slide 56
- 56 C. Contribution of FDI to Trade The high level of FDI
created numerous manufacturing joint venture. These enterprises
expected their products to the global market very rapidly. Amid
China s industrialization under the support of FDI, products are
diversified, becoming more value-added, and technology- oriented so
quickly that the composition as exports is about to undergo a major
change as the share in world trade is significantly raised.
- Slide 57
- 57 A close look at the breakdown of China s economic rise in
perspective. Foreign-funded enterprises accounted for 55 percent of
China s exports last year. In this respect, China diverges from the
typical Asian success story. George F.Gilboy. The Myth Behind China
s Miracle Foreign Affairs July/August 2004, Volume 83, No.4 Can we
agree with this statement? If yes, what is our reason?, If not, how
can we explain it?
- Slide 58
- 58 The Flow of FDI into Manufacturing Industry Until the 1980s
China received the small amount of foreign direct investment (FDI)
The dominant sector invested by foreign capital has been Chinese
manufacture industry, by accounting for about 60%- 70% in the last
decade. Major international makers of high-technology products are
accelerating the shift of production to China since the second half
of the 1990s. The movements of foreign capital and technology into
China are making China s industry towards the sophistication of
structure and increasing technological competitiveness in the world
market.
- Slide 59
- 59 The Growth of Foreign Direct Investment in China (1984-2008)
US$ Billion
- Slide 60
- 60 Comments on FDI FDI is one method of resolving technology
gap issue in economic development. Major technology source comes
from the developed countries. The establishment of new industries
must get outside supports for developing countries. With the
emergence of new technological products and industries, FDI may
continue to play the important role in the global economy. If the
decline of FDI inflow into China, what will be happened to China s
industry?
- Slide 61
- 61 Major international makers of high-technology products are
accelerating the shift of production base into China since the
second half of the 1990s. The movements of foreign capital and
technology into China are making China s industry towards the
sophistication of structure and increasing technological
competitiveness in the world market. New industries, new
players
- Slide 62
- 62 D. The Change of Export Competitiveness in Different Sectors
The share of manufactured products increased from 37% of
merchandise exports in 1985 to 91% in 2002, and within manufactured
goods the composition shifted toward capital goods, which are
usually more technology intensive than light manufactures such as
textiles, food processing and garments. The implications of China s
entry into the WTO suggest that China can benefit from the
expansion of labor- intensive industries such as textiles and
garments, in which its global market share is expected to increase
significantly. The export of textiles increased from $49.83 billion
in 2000 to $165.80 billion in 2007, increasing by 3.3 times;
however, the export of machinery and electronic goods increased by
nearly 6 times, from $82.60 billion to $698.61 billion, at the same
period.
- Slide 63
- 63 In 2002 the ranking of machinery and electronic products
grew to the top with $126.98 billion, higher than that of
miscellaneous products (such as garments and footwear) with $101.15
billion. This statistics shows just how rapidly the exports
expanded in the machinery and electronics sectors in China. In
2007, the machinery and electronics accounted for 47.39 percent of
the total exports. Learning through importing and exporting
activities in China s technological industries
- Slide 64
- 64 Trade in Major Products US$ Billion
- Slide 65
- 65 Technology Diffusion through Trading It is clear that the
international diffusion of technology provides a crucial ingredient
in the debate on technological locking out of under development.
Through the use of imported technologies, China can acquire some
comparative advantages in low-tech mature products and related
industries.
- Slide 66
- 66 Learning Effects Technological catching up will only be
achieved through acquiring the capacity for creating and improving
as opposed to the simple use of technology. This means being able
at some stage to enter either as imitator or as innovators of new
products or processes. Learning effects in trade of manufacturing
products.
- Slide 67
- 67 Technology Deepening The structure of China s external trade
has been undergoing a significant change with the broadening boom
of investment in China from overseas during the last decade. It is
distinguished feature that the export of machinery and electronic
goods increased dramatically from $0.84 billion in 1980 to $7.15
billion in 1991, and to $187.77 billion in 2003, $268.26 billion in
2004. At the same period, the import of these industrial products
also increased from $5.12 billion to $19.6 billion, and to $192.83
billion and $252.83 billion. Obviously, the gap between exports and
imports in the machinery and electronic goods is getting narrowed
bit by bit. It is learning effects
- Slide 68
- 68 Changes of Machinery & Electronics Trade Structure
- Slide 69
- 69 The Case of Machinery & Electronics It is a
distinguished feature that exports of machinery and electronics
goods increased dramatically in the last 18 years: US$5.59 billion
in 1990 US$82.60 billion in 2000 US$268.26 billion in 2004
US$352.23 billion in 2005 US$577.05 billion in 2007 Changes of
China s comparative advantages.
- Slide 70
- 70 The ratio of export of machinery and electronic goods to its
import was 36.48 percent in 1991, and changed into 97.38 percent in
2003, and further into 139.9 percent in 2007. This comparison
clearly implies that the availability of imported intermediate
goods and of technology, whether licensed or embodied in imported
capital goods, is an important source for improving export
capability in China s manufactured products. The contribution of
imported technology to industrial restructuring has been
significant.
- Slide 71
- 71 5. Industrial Restructuring It is major task for Chinese
economies to expand its manufacturing capacity, especially in
technological industry. How to assess the technological levels for
Chinese economies? Which direction for China s industrial
restructuring has been taken?
- Slide 72
- 72 A. Big Changes of China s Manufacturing Industry Textile
& GarmentsMachinery & Electronic OutputShare of
M.(%)OutputShare of M.(%) 1992358.0714.42565.3626.43 2004 2007
1322.66 2633.37 8.10 7.45 5883.99 13515.29 36.05 38.22 Unit:
Billion yuan. Will China keep its labor intensive industries for
many years? If yes, how long? Electronic & electric industries
accounted for 19.31 percent of manufacturing output in 2004, which
is the largest share to manufacturing industries for all developed
and developing countries.
- Slide 73
- 73 What Can China Learn from International Lessons? Electronic
and communication sector has been enlarged to be the major industry
in 2003. Is it a similar phenomenon with other East Asian
economies? Clearly, electronic industry is highly globed. Is it an
international division of labor or just the reflection of
industrial competitiveness, particularly labor costs?
- Slide 74
- 74 Difference of Manufacturing Structure: Lessons from Global
Comparison IndustryDevelopedChinaDeveloping 199620071996
1.Mining7.815.7932.10 2.manufacturing83.9487.2860.99 Food.
beverage8.789.0112.69 Textile2.294.624.07 Clothing &
leather1.613.153.07 Refinery & chemicals12.1812.5912.90
Metallurgical industry5.2212.773.74 Machinery
electronics40.0533.3615.48 others13.8112.789.04 3.Public
utility8.256.976.91 Total100
- Slide 75
- 75 Discussion Different features of manufacturing industries
between China and developed countries. Case studies: The USA, the
European Union and Japan still have very powerful production
capacities in machinery, electric and electronic industries. Brief
discussion: the case of automobile industry.
- Slide 76
- 76 B. Automobile Industry China s auto industry continues to
grow, registered an average of 20 percent per annum over the period
2002-2007. China s auto sales increased 5.2 percent in 2008, and
surprisingly rose 12 percent (2.67 million vehicles) for Q1, 2009.
Why does China s auto sales keep rise in this global economic
downturn?
- Slide 77
- 77 The Global League Table 2007 Vehicles( 000) Share(%) 2000
Vehicles( 000) Share(%) 1. Japan 11596 15.851. USA 12800 21.93 2.
USA 10780 14.742. Japan 10141 17.37 3. China 8882 12.143. Germany
5527 9.49 4. Germany 6213 8.494. France 3348 5.74 5. Korea, Rep.
4086 5.595. Korea, Rep. 3115 5.34 6. France 3016 4.126. Spain 3033
5.20 7. Brazil 2971 4.067. Canada 2961 5.07 8. Spain 2890 3.958.
China 2069 3.54 9. Canada 2578 3.529. Mexico 1936 3.32 10.India
2307 3.1510.UK 1814 3.11 Others 17834 24.38Others 11630 19.89
Global Total 73153 100.00Global Total 58374 100.00
- Slide 78
- 78 China s Share of Global Auto Production %
- Slide 79
- 79 Capacity Expansion in Auto Industry A big shift in the
global auto industry While global players are turning to the
emerging markets such as China for profits they can no longer
realize in the United States, Europe and Japan, domestic
manufacturers in China are building up their own auto industry with
technology transferred by the multinationals through joint
ventures.
- Slide 80
- 80 Currently, about 65 percent of cars made in China are
manufactured by non-Chinese companies. But multinational auto
makers also face keen competition from homegrown manufacturers in
China. Can Chinese homegrown auto makers survive in their
competition with leading multinationals?
- Slide 81
- 81 Very significantly, both the production of automobiles, and
in the related auto- parts industry, China s auto makers are
pushing for influence both within China s expanding domestic market
and through exports, particularly through partnerships with foreign
companies. It is possible to judge that homegrown auto makers will
grow up in the booming markets.
- Slide 82
- 82 China s Auto Ex-Imports US$ Million
- Slide 83
- 83 Ex-Imports of Auto Parts US$ Million
- Slide 84
- 84 The export amount of vehicles from USD1.34 billion in 2000
to USD9.6 billion in 2008. It is noticed that one of the biggest
China- related shifts thus far is not in the production of
automobiles themselves, but the exports of parts and components.
China s exports of auto parts continue to increase from USD1.12
billion in 2000 to USD14.82 billion in 2008. This performance is
better than that of vehicle exports.
- Slide 85
- 85 Vehicles in Use: International Comparison CountryYearPer
capita Vehicles in fleet 000 V/P(%) Passenger Cars 000 C/P(%)
China2000840 15761 1.24 8537 0.67 20072500 43584 3.30 29617 2.24
Japan200035420 72653 57.27 62438 49.21 Korea20009010 12040 25.61
8084 17.20 Brazil20003630 28975 17.03 23242 13.66 Germany199925690
44874 54.66 42324 51.56 USA199932260214775 77.07132432 47.52
India1998440 8120 0.81 5056 0.51
- Slide 86
- 86 Discussion Possession ratio of vehicle to population
increased from 1.24% in 2000 to 3.3% in 2007. Possession ratio of
passenger cars also increased from 0.67% to 2.4% over the same
period. As for Japan, this ratio is at 49.21%, higher than that of
the US (47.52%). Will China catch up with Brazil and Korea s level
of vehicle in society use? If China s GDP per capita will be as
high as that of the developed economies, can more vehicles be sold
out in coming years?
- Slide 87
- 87 The Estimation of China s Automobiles ( 000) 200020072020
GDP per capita (USD)9502,50012,000 Auto Production
Vehicles20708888.925000 Passenger cars6074997.818000 China s share
of global (%) Vehicles3.5412.3220.00 Passenger cars1.488.5218.28
Global auto production Vehicles Passenger cars 5839.24 4098.79
7217.85 5630.11 124500 95712
- Slide 88
- 88 Can China become the largest auto producer in the world? It
is reasonably forecasted, that the China s auto production and
sales will be around 25 million units in 2020. It s going to be
much more important to see how Chinese consumers there are thinking
about or rethinking their purchases of cars and looking for the
next five years or so. The estimation of strong demand for autos
can be drawn from the growth of per capita production rate over the
past decade.
- Slide 89
- 89 6. The Future of Chinas Industry It is worth to note that
the ranking of world economic power will be changed very often due
to the different growth rates of major countries. The rise of China
as an economic giant is a new phenomenon in the 21st century, but,
China s GDP per capita is still very low. Economic growth is not a
pure economic issue, it refers to many aspects of economy as well
as society.
- Slide 90
- 90 New Global Industrial Player Chinese economy will continued
to be based on the industrialization. Industry will develop the new
technology sectors and upgrade the manufacturing industry in the
coming decades. Globalization of industry is a good way for China s
improvement of technology competitiveness: global competition. Is
it possible for China to be the largest industrialized country in
the long run?
- Slide 91
- 91 Challenges and Opportunities The world economy will be
prosperous in the coming years, which provides many opportunities
for both developed and developing countries to increase their
exports. China will continue to experience the high growth rate and
expand its industrial capacity, which may be beyond today
expectation. China is facing many challenges and issues, which may
be turned into the opportunities for development. What prospect for
the future of China s industry?
- Slide 92
- 92 Questions 1. Briefly describe the changes of economic
structure by output and employment in China. 2. Please briefly
describe the main features of China s industrialization. 3. What is
the main difference of industrial structure between developed and
developing countries?
- Slide 93
- 93 4. Can you analyze other common characteristics of
developing economies not mentioned in the lecture? List four or
five. 5. Of what relevance is the high growth rate of china s
economy in the past two decades?
- Slide 94
- 94 Thank You!