Lin Guijun: Foreign w88 stands at the juncture of structural changes

(Source:Global NetworkDate:2016Year3month28日）

This year’s Boao Forum for Asia, everyone is generally concerned about a new issue: Has economic globalization bottomed out?

　　In the past 30 years, the economic growth of countries around the world has mainly relied on w88, exports and globalization. The ratio of w88 growth to GDP growth is basically 2:1. Now this ratio may not reach 1:1. In Asia, it is even lower. Before the financial crisis broke out in 2007, Asia's export growth rate was 17.4%. After the financial crisis broke out until 2012, w88 growth dropped to 3.6%, and GDP grew by 6.4%. In 2014, Asia's GDP growth was 4.1, and w88 only grew by 1.5%. This shows that the engine role of w88 in the world economy has disappeared, which is a very important reason for the global economic downturn.

What causes the engine of w88 to disappear? Outsiders think it’s mainly the United States's overseas processing outsourcing has decreased, and the manufacturing industry has returned to the local area or processed onshore, resulting in a decrease in orders from other countries. Of course, the actual causes require further research and excavation. However, how to evaluate this phenomenon has aroused debate in the economic circles. One view is that this is an institutional change in the world economy after the financial crisis. Long-distance travel for processing is too risky and costly, leading foreign investors to generally choose places close to the market to invest. The WTO believes that this change is both cyclical and structural. Data released by World w88 Alert believes that this is caused by countries, especially G20 countries, adopting w88 protection after the financial crisis. Chinais the biggest victim of w88 protection.

I believe that global w88 is undergoing structural changes, and its impact on the Asian economy is profound. Over the past 20 years, global value chains have been the most important driving force behind Asia's miraculous growth. However, currently global value chains are indeed facing great uncertainty, with growth facing a structural slowdown and the importance of w88 declining. The economic growth model of Asian countries has undergone significant changes. The transition from relying on external demand to being driven by domestic demand has not been very successful. Everyone is also actively exploring new markets. China's economic data also supports this conclusion. In 2015, China's GDP increased by 6.9% year-on-year, and its import and export value dropped by 7% year-on-year. This was unprecedented. The important factor that promoted the rapid growth of our w88 in the past - the reshoring of parts assembly and processing, is disappearing.

What is the secret of China maintaining import protection while expanding exports in the past 30 years? The answer is the processing w88 model. China's import protection has always been very high. The cost of imported raw materials is high, and the cost of exporting finished products must be high. What should I do if domestic finished products cannot be exported? In processing w88, imported raw materials that do not go through the domestic market enjoy preferential policies, thus creating an enclave under our system. At its peak, processing w88 could account for more than 50% of China's total w88.