Foreign scholars positive about China's economic growth prospects

A number of foreign scholars and experts have said they are positive about China's economic growth prospects during interviews with the South China Morning Post.

"China is so far doing a pretty good job of retaining its competitiveness and maintaining a fairly stable share of global trade and manufacturing," said Arthur Kroeber, founding partner of Gavekal Dragonomics, a China-focused economic research firm.

When asked about China's status in the global supply chain in the long run, Kroeber said the country is broadly competitive across low-value sectors and high-value sectors. "They have such an enormous labor pool and such effective infrastructure that they are able to be competitive across a wide range of goods."

He said China has a ton of comparative advantages in terms of size, the productivity of its workforce, the quality of its infrastructure, and the industrial ecosystem it has created in many sectors.

China is still a non-optional market for many international companies, Kroeber said, adding that the country is still a big source of incremental growth.

He said China will continue, for quite a few years, to have a very robust position in global manufactured trade, including in the developed markets.

"It's going to be very difficult to fully decouple the markets of developed countries from China because China is just too important in too many supply chains," he said.

When asked about his assessment of China's economic development in the next five years, Jeffrey Sachs, an economics professor and director of the Center for Sustainable Development at Columbia University, said China is already at the cutting edge of many of the key global technologies needed for the coming 25 years including photovoltaics, wind power, modular nuclear power, long-distance power transmission, 5G (now 5.5G), batteries, and electric vehicles (EVs).

"These will keep the Chinese economy moving forward," he said.

The Belt and Road Initiative and related policies will play a larger role as the world invests in new energy and digital systems, he said, adding that China's trade and financial relations will turn increasingly towards emerging and developing countries.

'The accusation is absurd'

Addressing the concerns about China's so-called overcapacity in the new energy sector, Stephen Roach, former chairman of Morgan Stanley Asia and now a senior research scholar at the Paul Tsai China Center at Yale Law School, said the accusation that any nation has excess capacity in green technologies at a time when the world is suffering horrific climate change is absurd.

"Politicians who want to restrict a nation like China, which provides green technology at low cost and high quality in areas like EVs and solar batteries, that is purely a political agenda that makes no sense from an economic comparative advantage point of view," Roach said.

Responding to the same issue, Sachs said, "there is no overcapacity in EVs."

However, there is a need to build out EV markets in emerging and developing countries, Sachs added.