Wang Wen: Russia should pay attention to understanding China


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Wang Wen: Russia should pay attention to understanding China


VEO of Russia: At the end of October the 20th Congress of the Communist Party of China was held. Congress set the priorities for the socio-economic development of the country.

Dear Pr. Wang Wen, please comment on the economic results of the Congress. How do you see thedevelopment prospects of China in the light of the decisions made at the Congress?

Wang Wen: The 20th National Congress of the Communist Party of China is of great significance to China's development. The most important point is to propose the central task of the Communist Party of China in the next 30 years, until 2049. That is to comprehensively build a powerful modern socialist country, and to achieve this goal by promoting the great rejuvenation of the Chinese nation through Chinese-style modernization.

So, what is Chinese-style modernization? There are 5 features. Chinese-style modernization is the modernization of a huge population, the modernization of common prosperity for all people, the modernization of harmonious material civilization and spiritual civilization, the modernization of harmonious coexistence between man and nature, and the modernization of peaceful development.

This establishes the prospect of China's development, which is to enable 1.4 billion people to realize modernization together and become richer and richer. This is not only rich on the material level, but also rich on the spiritual level. More importantly, it is necessary to achieve low-carbon and green development without repeating the path of so-called 'rising by wars' in the world.

In other words, the Communist Party of China will lead China to achieve its rise in the next 30 years, which is a process of rising with a huge population, balanced development, green environmental protection, and peaceful cooperation.

VEO of Russia:China is one of the world leaders in the field of innovative development, and this is the key to the rapid growth of the Chinese economy. However, the innovation process always has a cyclic nature. At what stage of the innovation cycle is China at the moment? In other words, what is the share of the fifth technological mode, and how much does it take "high technologies" – i.e. the sixth technological mode?

Wang Wen: The innovation cycle theory was invented by the famous economist Schumpeter in 1939. It summarizes the law of technological innovation based on the comprehensive analysis of production factors and production conditions.

From China's perspective, the innovation cycle is on the rise in terms of investment, policy, population, enterprises, market and many other conditions. China adopts a development strategy of technological innovation and encourages more and more funds to be invested in innovation. In China, in the next 30 years, there will be another 300 million middle class, supporting a huge consumer market for innovative products. More importantly, world markets are opening up to Chinese innovative products.

For example, taking chips and semiconductors as an example, China needs to pay 380 billion US dollars to import chips and semiconductors in 2020, which is higher than energy imports. If China adopts local substitution, it will save a lot of cost, which will form a huge innovation stimulus.

In the past 30 years, from household appliances to aerospace technology, to large aircraft, and 5G products, China's next round of local innovative products will be chips and semiconductors. On the other hand, China's 5G products and new energy products are also rapidly expanding in the global market. From these perspectives, China's innovative development still has a lot of room for improvement.

VEO of Russia:President Xi Jinping, speaking at the 20th Congress of the Communist Party of China, called defeating total poverty – one of China's most important achievements in the past 10 years. How will the task of further increasing the country's standard of living will be solved in the light of the decisions made at the Congress? How do you see the potential for economic growth of the country by increasing the income level of the Chinese population?

Wang Wen: Over the past 10 years, 100 million people in China have been lifted out of poverty, fulfilling the UN SDG2030 target 10 years ahead of schedule, accounting for more than 70% of the world's people out of poverty.

But at the same time, in the report of the 20th National Congress of the Communist Party of China, we acknowledged that there is still a large gap in urban-rural development and income distribution; China's per capita GDP is US$13,000, which is still less than one-fifth of that of the United States. From this perspective, China's development tasks are still heavy.

Therefore, by 2035, one of the overall goals of China's development is: economic strength, scientific and technological strength, and comprehensive national strength jump significantly, and the per capita GDP reach a new level and reach the level of a moderately developed country. People's lives are happier and better, residents' per capita disposable income has reached a new level, the proportion of middle-income groups has increased significantly, and so on.

From the perspective of income level, as long as the current basis is increased by 40%, China's economic aggregate can be equal to that of the United States. If it can maintain an average annual growth rate of 4.7%, in 2035, China's GDP will double to $36 trillion, which is 1.5 times that of the current United States. This goal is fully achievable.

VEO of Russia:If we're talking about Russian-Chinese relations, what's limiting the opportunities of the economic cooperation between our two countries? What solutions could contribute to its development?

Wang Wen: As you know, I stayed in Russia for 2 months this autumn and visited 21 cities. All Russian friends are very friendly to me, but their understanding of China is limited. China-Russian economic cooperation has developed rapidly in recent years. In 2021, China-Russian trade reached 145 billion U.S. dollars, a record high, and in 2022 it will be close to 200 billion U.S. dollars. This is pretty amazing progress.

But in my opinion, $300 billion or even higher is also possible. There are at least three conditions here: First, stimulate trade. In 2023, China will be the largest consumer market in the world, importing 2.5 trillion U.S. dollars to the world every year, but only 3% comes from Russia. Even oil and natural gas, Russia is not China's largest import destination.

Second, open investment. China has become the world's largest foreign investor, with an annual foreign investment of more than 150 billion U.S. dollars, but only 1% of it flows to Russia. If Russia opens its market and improves its business environment, it can attract more investment from China.

The last is to enhance personnel exchanges. In the post-pandemic era, both China and Russia should strengthen their understanding, and strengthen cooperation in art, film, culture, science and technology, and academics, so as to create a permanent model of major-country relations.

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