John Ross: China Grows more Quickly than Anybody Else in the Economic Development

John Ross, senior fellow with Chongyang Institute for Financial Studies, Renmin University of China and former director of Economic and Business Policy for the Mayor of London, interviewed by China Matters during the Seventh World Forum on China Studies in Shanghai on Sunday. He talked about his opinions of China’s politics, economic development and international relations.

China Matters: Can you share some of the things that impressed you most about the 19th CPC National Congress?

John Ross: It’ s not about a part. It’ s all. It’ s about connection and union. China is the second largest economy in the world. In some respects, it is the largest. Some economists in Europe and USA estimate that in ten to fifteen years China can be the largest economy in the world.

China Matters: How do you think Sino-British relations will develop in the post-Brexit world?

John Ross: On Brexit, nobody knows what is the result of the relation between Britain and China, because nobody knows the relation between European Unions and Britain. That expresses my personal feeling that Brexit is a stupid decision and that stupidity nobody knows what it means.

Before the Brexit, the relation between China and Britain is very clear and it is a win-win situation. That is London was the most important financial center in Europe and China wishes to extend its financial investment roads into London and Britain was the entry to the European Union. Everything is satisfactory and the relationship between Cameron and Xi Jinping was excellent. The European Union is an extremely important economic unit. In fact, the GDP of the European Union is bigger than that of the United States. So relation with the European Union is extremely important. But relationship between China and small islands off the coast in Britain and off the coast in Europe are not terribly important.

It is not generally understood in China that the European Union has two structures. One is political structure and one is economic structure, the single market of the European Union. If withdrawing from the political structure from the European Union, the economic structure, the single market of the European Union won’t make much difference. In that case, it will still be an important place for China to invest. If Britain withdraws from the economic structure, that is the single market of the European Union, then Britain will not become a very important market.

The British government doesn’t know what it wants from the relationship to the European Union. The first discussion of the British government on its final relations with the European Union is on December 19th . It’s not clear even if the government decides what it wants, whether it has a majority parliament for it and by British Institution, parliament makes the law not the government. Therefore, at the present time, nobody knows what is going to be the relation between Britain and the European Union and nobody really knows what is the relation between China and Britain.

So, that is a very irrational decision. So sorry, I can’t give you a clear answer. It’s not because of the lack of clarity in my thought, but it’s because of the lack of clarity in that situation.

China Matters: What do you think of Socialism with Chinese Characteristics for a New Era?

John Ross: I think there are two aspects in this era, one there is too much emphasis in the domestic transition of China, high income economy if I can use the international standards.

In 1978, China was still a very poor country, the important matter is taking people out of poverty. As was put in one of my previous speeches, this movement just stopped China from being a survival economy. This has been an incredibly successful achievement. But this also creates a new situation because human beings have very complex needs. This includes having enough to eat which remains a problem for many people in the world, through the highest science, the highest culture, the highest demands, so the hopes and the demands of Chinese people have enormously expanded because of technological success. This is what I think that is made by the change of the main contradiction in China’s society from an uneven development to satisfy the needs of people.

But I think there is a second aspect based on my specialist on the international economy, which was not enough understood in China.

In previous periods of economic development, China was aided by the quite rapid growth of the international economy. It grows more quickly than anybody else. We may say that all of the ships has wind behind them but the Chinese ship went faster than others but all of the ships go quite quickly. Since the international financial crisis, there is a new situation. The wind is not behind the ships of the international economy. The wind blows against the ships of international economy, which means that the growth of the international economy by the end of this year will be slower than the 1929. In the ten years after the 1929, the growth G7 economies were 16%, but 10 years after the 2007, the international financial crisis, the growth of G7 is only 11%. So western economic growth is actually slower than that of 1929.

So from my perspective, the new era has two aspects. On the domestic aspect, I don’t have much to add to what was said at the 19th congress meeting which is right. But the question which stays underestimated is the very slow of economic growth in the west. So there is also a new era in the international economy as well as the domestic economy. That means China has to make transition to high income economy, despite very slow growth in western economies. I think the most important is that it continues to follow its economic course which was outlined originally by Deng Xiaoping.

I strongly agree with the statement made by one of China’s most important economist Lin Yifu that Chinese economic thinking is one of the most important in the world. I think it’s absolutely stupid for western economic institutions such as IMF, or the OECD whose policies have been 1.7 % growth in the western economies, to be telling China whose growth rate is 6.7 % what to do. It is much more important for the western economies to learn from China, rather than for the western institutions to be telling China to copy western failures. If you have two companies, one company grows very quickly, and one company grows very slowly. Everybody says to copy the company which grows quickly. Nobody proposes to copy the company which grows slowly.

Therefore, it is ridiculous to propose China which is growing quickly should copy western economies which grows very slowly. This is completely stupid. This is why I think the speeches made by Lin Yifu about that the centers of world economic thought are moving to China are extremely important and extremely correct. I completely agree with it.

I have a phrase which some people in China likes very much. It says that China can’t be murdered, therefore China has to be persuaded to commit suicide. That is China’s fate is in its hands that its success is leading to the success of China’s economy. But Some people want to persuade China to abandon its course which brought such success and commit suicide. This is a tragedy not only for china but also for the humanity.

China Matters: What do you think of the path of China’s economic development?

John Ross: Let’s take the three big tests of the last 40 years of the world’s economy.

First is the rate of the economic growth. China’s economic growth is far faster than the western economy. The second was the test of shock therapy that is the western economic theory in the Soviet Union compared with Chinese economic reform. Chinese economic reform brought the fastest economic growth in the world whereas the shock theory in Russia produced the biggest economic lapse in the world. And the third one was the international financial crisis, in which China continued to grow very quickly and the west had a very deep economic crisis.

There was a very wise Chinese saying which says “seek truth from the facts”. The facts show that China’ s economic thinking in the last 40 years has been the most advanced in the world.

John Ross is a British academic, journalist, blogger, and economic commentator who has been a left-wing political activist and worked as an economic advisor to Ken Livingstone when he was Mayor of London. He wrote the books Thatcher and Friends – the Anatomy of the Tory Party (1983) and The Great Chess Game- A New Perspective on China’s Destiny (2016). He is a columnist in English at China.org.cn and is translated into Chinese at Guancha.cn and Sina Finance Opinion Leaders. He is a senior fellow at Chongyang Institute for Financial Studies at Renmin University of China.

Interviewer: Zhang Jing

Editor: Cai Hairuo