THERE is room for Manila and Beijing to work together in many areas no matter that local output in the world’s second-biggest economy has slowed in recent months, China’s top economist said.
According to the Dr. Zhang Yuyan, Director at the Institute of World Economics and Politics at the China Academy of Social Science (CASS), despite the slow down in China’s economy, its continued growth has proven higher compared to other countries and China it can work with neighbor economies like the Philippines.
“[We share a] common interest. There are opportunities” ahead, Yuyan said at a forum hosted by the Asian Institute of Management (AIM) in Makati City.
The area of cooperation between China and the Philippines is particularly large in the infrastructure sphere.
“There is room for cooperation. China is good at constructing seaports, airports, railways and roads. We are good at it. At the same time, we also have resources, like steel, cement and coal. At the same time, the Philippines needs to improve its infrastructure,” Yuyan said.
Such cooperation is particularly attractive for both, since the Philippines has embarked on a multiyear infrastructure buildup program and has boosted its allocation for the construction of public infrastructures in the nation’s annual budget of expenditures.
Yuyang said China has established a record for constructing huge projects, like seaports and airports, for instance.
The decline in China’s economic expansion was seen to have been pushed lower by a dramatic decrease in the Chinese labor supply, according to Yuyan.
“China’s growth rate is slowing down, but, compared to other parts of the world, it remains [some] the highest,” he said.
Based on data presented by Yuyan, China’s real gross domestic product (GDP) was seen to decline in the coming years. China’s real GDP was seen to decrease to 5.9 percent in 2020, from 6 percent for both 2019 and 2018, 6.2 percent in 2017 and 6.6 percent in 2016.
China’s real GDP in 2015 averaged 6.9 percent and 7.3 percent in 2014 or comparatively higher than earlier forecasts.
The World Bank projected growth in China averaging 7 percent from 2016 to 2020, representing a decline from forecast growth averaging 8.6 percent from 2011 to 2015.
The International Monetary Fund forecasts growth in China averaging 6.1 percent from 2016 to 2020, a decrease from forecast growth of 7.8 percent from 2011 to 2015.
Also, the United States National Intelligence Council forecasted growth in China ranging from 5 percent to 6.7 percent throughout the period.
Yuyan further said that for China to bounce back from the decline, it must focus on supply-side driven reform, which includes the liberalization of its labor market, an improvement in its educational system, building an innovation-driven economic system, pursue and strengthen a market-augmented government, cut excess production capacities and undergo a reform on its fiscal and taxation system.
“There are many estimates about China’s economic growth trends and there are many reasons why the growth and decline are as such. To bring the Chinese economy to medium to high growth, it must liberalize its labor market, among others,” Yuyang said.