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Manuel Pinho Torch light conference

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Manuel Pinho Torch light conference

  1. 1. 4/14/17 Manuel Pinho China and the forces that are breaking all the trends Torch Light Conference Columbia University September, 15- 17, 2017 Manuel Pinho
  2. 2. 2018 2019 The next time that I will visit Beijing
  3. 3. My impressions of China 2007 Defending Europe´s interests 0 2 4 6 8 10 12 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Current account Imagine, for the sake of argument, that Europe's politicians sit down to debate how Europe can best defend its interests in a globalized economy. In effect, they want to draft a European foreign economic policy. Europe's basic foreign economic policy should be 10 words long. • Resist protectionism at home. • Open markets abroad. • Defend fair trade.
  4. 4. My impressions of China 2011 The good and the bad The good The bad
  5. 5. Fast forward 2017
  6. 6. The end of Western dominance: did your parents own a car when you were born? The end of western dominance
  7. 7. 1. Extremely strong political leadership of President Xi Jinping on the eve of the 19th National Congress of the Communist Party, where 5 of the 7 members of the Political Bureau Standing Committee will be replaced 2. The idea of the new normal seems to be well established and there is no major concern with lower GDP growth rates 3. U turn on the policy of encouraging or facilitating companies to make acquisitions abroad 4. The policies of the US new administration are taken seriously, however there is the feeling that a full blown trade war will not happen given that the economy of the 2 countries is very intertwined 5. The speed of adoption of digital technologies is amazing and is permitting China to leapfrog in many areas 6. Air quality is improving 2017
  8. 8. Yu´e Bao 165 billion $ Innovation
  9. 9. 0 5 10 15 20 25 30 35 19801982198419861988199019921994199619982000200220042006200820102012201420162018 China, share in world GDP, PPP, 1980- 2016 China, People's Republic of United States European Union 100 141 100 197 0 50 100 150 200 250 2017 2030 US China Imagine the G20 meeting in 2030
  10. 10. 0 2 4 6 8 10 12 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Current account -5 -4 -3 -2 -1 0 1 2 3 Net exports contribution to GDP growth p.p. 0 20 40 60 80 100 120 140 1990 2000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 REER 0 2000 4000 6000 8000 10000 12000 14000 16000 18000 20000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 US manufacturing jobs 4 misconceptions about China We are not in 2007 anymore
  11. 11. -2 0 2 4 6 8 10 12 14 16 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 2020 China, People's Republic of World 0.0 50.0 100.0 150.0 200.0 250.0 01.03.1990 01.04.1992 01.05.1994 01.06.1996 01.07.1998 01.08.2000 01.09.2002 01.10.2004 01.11.2006 01.12.2008 01.01.2011 01.02.2013 01.03.2015 Credit non financial sector- GDP Bears Goldilocks
  12. 12. Accelerating technological change Shift eastwards New globalization paradigm Rapid urbanization Cimate awarenwss Energy transition No ordinary change
  13. 13. 1. Accelerating technological change: China is one of the countries where the digital revolution is unfolding more rapidly 2. Shift eastwards of the world´s center of gravity: China is the largest economy in Asia and in the world 3. New globalization paradigm: China is the world´s n. 1 exporter and n. 2 importer and maintains a comfortable trade surplus 4. Urbanization: The growth of the urban population creates a tremendous opportunity to develop consumer spending and investment in areas such as ports, airports and buildings 5. Climate awareness: China was offered the possibility of becoming the champion of climate change 6. Energy transition: China is, by far, the largest investor in renewable energies There is a global disruption with few precedents as a result not of one but of 6 driving forces operating at the same time and China is a major contributor in all fronts:
  14. 14. Fear instigated the war, not objective reasons. This is why it is so important on the one hand to understand the true meaning of ‟making America great again‟ and on the other hand exploit the possibilities to develop cooperation between the US and China. Cooperation is the best way to create bridges and avoiding irrational behaviors.

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