China will emerge from the global recession stronger and more quickly than any other economy, a University of Nottingham economist has predicted.
Professor Shujie Yao, Head of the University’s School of Contemporary Chinese Studies, said China is set to grow rapidly and may already be the world’s second largest-economy — leaving the UK and others to stagnate.
At a seminar organised by leading Chinese and UK academics, Professor Yao demonstrated how the nation is taking advantage of the worldwide financial crisis to strengthen its position.
He said: “There’s no doubt China has been hit by the global recession. Exports fell for the sixth month in succession in April, the Shanghai Stock Exchange suffered worse drops than most other leading world stock markets — down 65 per cent — in 2008, and GDP growth has slowed from double figures in 2007 to a likely eight per cent this year.
“But other countries have been much harder hit. The UK, for example, will see its economy contract this year by 4.5 per cent and may start to grow very slowly in 2010-2011.
“Two years ago I was worried that rising food and commodity prices could act as a serious drag on China’s economic progress, but the recession has brought these prices right down. That is helping China’s growth, because the country is — or will be — the biggest net importer of many raw materials and oil.
“The recession is also leading to a painful but necessary economic shake-up within the country.
“Manufacturers of cheap goods are going out of business because of the collapse of the export market, and that is leading to the demise of inefficient businesses and a drive to move Chinese manufacturers further up the technological ladder to improve their global competitiveness.
“Finally, the crisis is helping to reduce the regional inequalities that were becoming a big issue and threatening China’s long-term growth and political stability.
“The drop in exports is encouraging manufacturers to move their businesses from coastal regions to the interior to bring down costs and satisfy domestic demand, and that is helping to correct some of the regional imbalances.”
Professor Yao spoke at a seminar jointly held by the School of Contemporary Chinese Studies and the Globalisation and Economic Policy Centre (GEP), both based at The University of Nottingham. The School is widely recognised as a leader in high-quality, discipline-based degree programmes incorporating the study of China.
Regarded as one of the world’s foremost scholars specialising in China’s economy, Professor Yao is Head of the School and co-ordinator of GEP’s China and the World Economy programme. He has been a consultant to organisations including the World Bank, the European Union and the United Nations Capital Development Fund.
Professor Yao predicted that China’s recovery will be V-shaped, whereas the UK and many other major economies will see a U-shaped recovery.
He said: “The UK recession will last some years, whereas the Chinese economy will bounce back more quickly.”
Professor Yao believes China will overtake Japan this year to become the world’s second-strongest economy, after the US. His analysis has been widely published in the media, including China Daily and leading Singaporean Chinese newspaper Lianghe Zhaobao.
The seminar, entitled The World Financial Crisis and China, took place at The University of Nottingham on May 19.
— Ends —
Notes to editors: The University of Nottingham is ranked in the UK's Top 10 and the World's Top 100 universities by the Shanghai Jiao Tong (SJTU) and Times Higher (THE) World University Rankings.
More than 90 per cent of research at The University of Nottingham is of international quality, according to RAE 2008, with almost 60 per cent of all research defined as ‘world-leading’ or ‘internationally excellent’. Research Fortnight analysis of RAE 2008 ranks the University 7th in the UK by research power. In 27 subject areas, the University features in the UK Top Ten, with 14 of those in the Top Five.
The University provides innovative and top quality teaching, undertakes world-changing research, and attracts talented staff and students from 150 nations. Described by The Times as Britain's “only truly global university”, it has invested continuously in award-winning campuses in the United Kingdom, China and Malaysia. Twice since 2003 its research and teaching academics have won Nobel Prizes. The University has won the Queen's Award for Enterprise in both 2006 (International Trade) and 2007 (Innovation — School of Pharmacy), and was named ‘Entrepreneurial University of the Year’ at the Times Higher Education Awards 2008.
Nottingham was designated as a Science City in 2005 in recognition of its rich scientific heritage, industrial base and role as a leading research centre. Nottingham has since embarked on a wide range of business, property, knowledge transfer and educational initiatives (www.science-city.co.uk) in order to build on its growing reputation as an international centre of scientific excellence. The University of Nottingham is a partner in Nottingham: the Science City.