By Kenny Porpora
Three experts of China’s economy participated in the fifth annual roundtable discussion of the present and future of China’s role in the global market.
Speaking to a full house Wednesday evening, host James Neelankavil, a professor of marketing and international business, introduced the first speaker, Li Cui, a senior economist at the International Monetary Fund (IMF).
Cui, aided with a slideshow, gave an overview of China’s economy. “China achieved impressive record in growth and development,” Cui said. “In the last 20 years, China has added more than $2 million to global GDP and $120 million to employment.”
According to Cui, China’s economic growth has been rapid in recent years, thanks mostly to investments and rising net exports.
“Domestic production capacity increased on the back of high investment, including Foreign Direct Investment (FDI), but our external trade structure has also changed towards more capital intensive and more technologically advanced,” Cui said.
Cui stated that concerns behind these facts include relatively weak consumption, a rising dependence on external demand and quality of growth and environmental concerns.
In response, she argued that consumption accounts for less than 40 percent of the Gross Domestic Product (GDP), and as household incomes decline, they are still saving more than 30 percent of their income.
By the end of her portion, Cui called for the rebalancing of the economy toward more consumption. “To achieve this goal, we must reduce price distortions that encourage overinvestment, reform bank and capital markets to improve financial intermediation and improve social safety, including health care, education and pension systems and support environmental conservation.”
Following the lead of Cui, Wi Saeng Kim, a professor of finance, discussed China, FDI and economic growth.
“FDI is the fountainhead of economic growth,” Kim said. “China has grown rapidly over the last 25 years from a very low income level. The average annual GDP growth from 1980 to 2002 is 9.5 percent.”
This gradual, yet significant, shift in GDP shows China as one of the world’s leading economic countries, leading the world in steel production and exporting, and boasting a higher inward FDI stock than the United States.
“In relation to the rest of the world, China is ranked third in importing, second in security and fourth in world GDP. For a low-income country, these advances are staggering,” Kim said.
Yong Zhang, a professor of marketing and international business, finished the lecture with an analysis about operating in China. Pointing to the investments of major corporations, such as Intel, Motorola and GM, as key contributors to China’s economic advances, Zhang kept his lecture short.
However, there are threats to China’s economic development still to consider. Poverty in rural areas, the imbalance in regional development and environmental deterioration all put China’s development at risk.
“Perhaps the most critical, though, have been the drastic demographic shifts we’ve seen,” Zhang said. “This is the graying of China, and taking into consideration the one-child policy that was put into effect by our government in the 1970; this shift will be a problem in the near future.”
Zhang concluded his speech after announcing China’s expectation to increase its GDP by 45 percent by 2010. Neelankavil then allowed for the three panelists to answer audience questions.
“Sometimes you don’t realize how much an impact the economy of another country can have on you,” sophomore Ashley Hughes said. “But I see now the significance of China’s growth and how we should all be aware of what’s going on in the world.”

China achieves impressive record in growth and development by adding to global GDP and employment.