The panel session “International Cooperation and Development in the New Normal: The One Belt One Road Initiative” held its second session on the morning of November 7 at the Sunlight Hall of the Yingjie Exchange Center at Peking University. Seven speakers gave speeches on topics such as China-Africa relation, international development aid, etc.
The first speaker is Professor Christine Hackenesch from German Development Institute. She studied the implication of China’s rise in Africa for reforming the European Union (EU) development policy and argued that Chinese engagement in Africa poses challenges for EU’s development policy. Professor Hackenesch first introduced three case studies of Rwanda, Mozambique and Angola to demonstrate that the ways that EU and China engages with individual African countries constitute a sharp contrast. Then she conducted field research and data analysis to show that the effects of China’s increasing engagement with individual African countries are not all negative, but rather could, in some cases, also have positive effects on EU collective action capacity. 

Professor Li Anshan from Peking University gave the speech on China Africa People-to-People (P2P) contact. He started with a vivid story of Madame Zhu and Zhu Junlong from 2000 to 2014 in Shanghai as an example of culture contact between China and Africa. Due to the numerous similarities between China and Africa, he noticed that the close interactions in between is tight at the first place and has a long tradition. In addition to official contact, P2P contact draws a lot of attentions since 2000 and is expected to be a more important part in the bilateral relations between China and Africa. One of the important contents of P2P contact is cultural offering and cultural learning, which would help make a greater contribution to a more harmonious world. Professor Li concluded that the nature of P2P contact is neither propaganda nor soft power as commonly viewed, but cultural interaction, cultural offering and cultural integration instead. 

Professor Li Xiaoyun’s speech was about international development aid. He first pointed out that it is unclear how the international development aid helps sustainable economic growth. Next he introduced the recent development, policies and new trend in the international development aid initiated by the Chinese government, including the South-South cooperation, the South-North cooperation, the triangular cooperation, etc. He emphasized that although China is becoming more social and playing a more proactive role nowadays, figuring out the most effective and efficient structure of international development aid could be difficult and challenging. He concluded that China could learn from its own experience in the past 60 years and the experience of Japan and OECD countries, and design the new structure and appropriate policies of international development aid accordingly. 

After the tea break, Professor Lee Doowon from Yonsei University gave the first speech on middle-income trap (MIT) in the second half of the morning session. He first defined MIT as the phenomenon that a country’s income ratio stays between 20% and 40% of USA real income in the long run. Using the panel data of 67 countries, he identified investment and quality of institution as the key determinants of explaining the differences in economic growth between countries that failed to escape the trap and those that succeeded. He then examined the data of China and argued that even though China does not share all the characteristics of countries that remain in the MIT, China still face some problems such as rapidly aging population, deteriorating income distribution, and inefficient capital allocation. Korea and Japan would be the most relevant countries China could learn from and draw policy implications. Resolving some major problems along with other social problems will eventually determine whether China can avoid the MIT or not.

 

Professor Li Shi from the Beijing Normal University and China Institute for Income Distribution gave the speech on the latest development of income inequality in China. His research finds that income inequality does not have too much explanatory power on the differences in economic growth. He first documented that although the Gini coefficient is experiencing a small decline in China as a whole since 2007, the income inequality in urban and rural areas is indeed increasing respectively. According to this finding, he drew the conclusion that the observed decline in income inequality stems from the decline of the income gap between urban and rural areas. Among all possible factors, the rapid rise in property income is the key for disequalization. Next he mentioned that the new normal economy in China might contribute to reduction of inequality. For instance, the rapid wage growth of migrant workers can be viewed as an income transfer between the urban and rural areas, which can facilitate income growth without increasing the degree of income inequality. He concluded by mentioning that whether income inequality can be reduced largely depends on the policy implementation in the future. 

Professor Lina Song from the University of Nottingham gave the presentation on the informality in the Chinese labour market. She first briefly defined the concept of informality as the phenomenon that workers work long hours without social protections. Then she introduced the fact that the informal economy is large in size in developing countries and raised three valuable questions based on this fact: (1) whether informal economy is always for the vulnerable? (2) whether informal economy will be reduced and finally transferred to formal? (3) whether the informality will cause political instability in a developing country like China? Next she focused on the informality problems in China and studied if informality exists in China. Her research aims to search for labour market segmentation and examine the determinants of entry of, or exit from, the “informal labour market” in China. Finally she reconceptualised “informality” in China and concluded that understanding the process of Chinese style of informality is important for addressing the threat of socio-political instability, which concerns policy-makers. Professor Song’s speech provided a thorough understanding of China’s informal economy and generated many insightful policy suggestions.

 

Professor Tulus T.H. Tambunan from the University of Trisakti was the last speaker in the morning. He argued that ASEAN’s overall economic growth and China’s own rapid expansion is contributing significantly to economic dynamism on both a regional and global scale. Both economic zones are experiencing rapid integration into the global economy, and are quickly being absorbed into the evolving global supply chains and taking on the role as factories to the world. Therefore, there is a natural gravitation towards each other as production bases with geographical proximity, historical ties and shared cultural affinity. 

After the presentation, discussants and participants proactively exchanged their thoughts on a wide range of related issues regarding the influence of technology upgrade on income growth, promoting innovations in China, the informality problems in the rural and urban areas in China, etc.