Ten Ten Trends of China's Economic Development in the Next Decade

- May 08, 2019 -

[Economic Experts'Prospects for China's Economic Development in the Next Decade]

Henan Microwave Equipment Network: On October 1, New China ushered in its sixtieth birthday. Standing at a new historical starting point and looking forward to the future trend of China's economy, the economic analysts of Xinhua Net have made extensive and in-depth research on the internationalization process of RMB, the impact of new energy on China's automobile industry, the future pattern of China's energy consumption, the future development trend of China's banking industry, the prospects of China's textile industry, the prosperity of cultural and creative industries, the new stage of network life, and food supply. The balance of demand, the deepening of capital market and the level of urbanization development have made an all-round forecast. It is not difficult to see that economic internationalization, industrial upgrading and market deepening will run through the whole process of China's future economic development. One of the trends of

is that the pace of RMB internationalization is accelerating

RMB is difficult to become a freely convertible currency. Steady appreciation is the general trend of the times

The next 10 years will be the 10 years for RMB to accelerate its internationalization. In 2020, RMB will account for more than 10% of international trade settlement, and even 15% of international reserves and foreign exchange transactions. By 2020, with no collapse of the US dollar depreciation, the exchange rate of RMB against the US dollar will be around 4.2:1, with an average annual appreciation of about 4.5%. Over the next 10 years, the process of RMB internationalization will be more driven by the sustained and rapid growth of China's economy and foreign trade. The accelerated internationalization of RMB will promote the reform of interest rate and exchange rate, the expansion of capital market and the improvement of the level of monetary regulation and control.

Compared with China's economic scale and the proportion of foreign trade in the global total, China's RMB's international status has lagged behind, but the improvement of RMB's internationalization level has been constrained by China's economic growth mode and financial supervision level. The impact of the financial crisis on the global economy and the major international currencies, especially the US dollar, has provided a rare opportunity for accelerating the internationalization of RMB.

It is estimated that in the next 10 years, China's GDP will increase by 8% annually. By 2020, China's total economic output will reach about 75.7 trillion yuan, equivalent to about 11 trillion US dollars at the current exchange rate. Considering the appreciation of RMB, China's economy will probably be close to the level of the United States, more than twice that of Japan, equivalent to 20% of the global GDP. In terms of trade, China's import and export will also increase by 8% annually, which will still be faster than the global average growth rate of 5%. As a result, China's total foreign trade will reach 6.4 trillion US dollars by 2020, surpassing the United States to rank first in the world, accounting for 13% of the total global trade at that time. And China's foreign trade will change from surplus to deficit. In 2020, the proportion of RMB in international trade settlement will be roughly equal to that of foreign trade in global trade, while the proportion of RMB in reserve assets may be higher. [next]

< P> The fetters of RMB internationalization still exist. First, China's economic growth depends too much on exports and investment. The double surplus of trade and investment hinders the export of RMB, which is the first condition for the internationalization of the currency. Even if all foreign trade and investment are settled in RMB, the double surplus of export and investment will absorb the RMB outflow through import payment and foreign investment, resulting in the shortage of RMB circulation abroad, or can only support the need of RMB international circulation by increasing foreign exchange reserves substantially, that is, exchange the inflow of foreign exchange such as US dollar for the export of RMB. The process of RMB going out will be accompanied by the further opening up and expansion of China's capital market, providing overseas RMB holders with a more adequate "asset pool" for investment. The formation mechanism of RMB interest rate and exchange rate will also be more market-oriented, which will reduce the risk of holding RMB. Capital access control will be relaxed to meet the liquidity requirements of RMB asset investors for investment security and profitability. These trends will promote the perfection of monetary and financial control means in China. Within 10 years of

, it is still difficult for RMB to become a freely convertible currency. However, the steady appreciation of the RMB is the general trend. The cumulative appreciation against the US dollar is expected to exceed 60% by 2020, first slowly and then quickly, with an average annual appreciation of about 4.5%. Trend 2

: New energy will help China become a powerful automobile country

and a number of world-renowned popular brands will be bred in the middle and low-end automobile market

by 2020, China's car ownership will still lag behind that of the United States, and the car ownership of thousands of people will still lag behind the world average level. The pressure of energy and environmental protection brought about by the rapid growth of automobile market will promote the development of new energy automobiles in China, and will probably become an opportunity for China's automobile industry to narrow the gap with the automobile powers. Over the past 10 years, China's automobile production and market have grown at a speed nearly double the GDP growth rate. Private consumption has become the biggest driving force for the rapid growth of China's automobile market. Ten years later, the popularity of automobiles in our cities will become a necessity for the daily life of urban residents, just like today's color TV sets. It will be very common for families in big cities to own two or more automobiles, and automobiles will enter rural areas on a large scale. Some models, such as light trucks, pickups and off-road vehicles, which can be used as a means of production, will open up a broad market in rural areas.

China's new car consumption market may exceed the size of the United States faster than expected, and this day will come in 2015. In 2020, the annual output of automobiles in China will exceed 20 million, double that of this year. At that time, China's car ownership will reach at least 185 million vehicles, becoming the world's largest car consumer market after the United States. The rapid growth of China's automobile market will bring tremendous pressure on energy and environmental protection, forcing China to accelerate the pace of development of new energy vehicles, while continuing to improve energy-saving and emission reduction technologies of traditional automobiles. Technological progress will help China's automotive industry narrow the gap with the world's automotive powers.

If we stick to the self-centered development thinking in the development of new energy vehicles, it is very likely that China will take the lead in breaking through in the field of new energy vehicles and realize the transformation of China's automobile industry from big to strong. In 2020, China will become one of the countries with the largest number of new energy vehicles in the world.

2020, the proportion of automobile export in China's domestic production will increase from 7.3% last year to about 20%. With a large number of automobile exports, China will nurture a number of world-renowned popular brands in the middle and low-end automobile market.

Ten years ago, there were 110 vehicle manufacturers in China, and the output of FAW, FAW and SAIC accounted for 44% of the total domestic output. In 2008, although the number of domestic vehicle production enterprises dropped to 82, the proportion of output of the three major groups in total domestic output increased by less than five percentage points, to 48.7%. In the next 10 years, the status of the three major groups in China may face the challenge of other enterprises coming to the top. [next]

< P> Trend 3: Energy consumption ranks first in the world

The gap between domestic energy output and demand is widening, and the proportion of energy import to total consumption is further increased

In the next 10 years, China will surpass the United States as the world's largest energy consumer, but the per capita energy consumption is still only half of that of Japan and Western European countries, less than one third of that of the United States, equivalent to the world's average water. Ping. The gap between domestic energy output and demand will further widen, and the proportion of energy imports in total consumption will increase from 3% at present to 20% by 2020.

China's energy policy will face tremendous pressure, and international calls for China to undertake more emission reduction obligations will gradually rise. The awareness of environmental protection of the domestic public will also be significantly strengthened. Both of them will jointly promote the transformation of China's energy structure to cleaner and economic structure to low-carbon.

In recent years, China's energy conservation and emission reduction policies have intensified, and the elasticity coefficient of energy consumption has gradually declined from 1.6 in 2004 to 0.44 in 2008, which is extremely rare in developing countries and new economies. If this super-low elasticity coefficient of energy consumption relative to developing countries can be maintained, China's GDP will increase by 8% on average in the next 10 years, and its total energy consumption will exceed 4.5 billion tons of standard coal by 2020, equivalent to 3.2 billion barrels of crude oil, close to the sum of the United States, Britain, France, Germany and Italy.

Domestic energy production will not be able to meet the growth of demand, and China's external dependence on energy will further increase. It is estimated that nearly 20% of China's energy demand will be met through imports by 2020. It is estimated that by 2020, China's net energy import will exceed 800 million tons of standard coal, equivalent to 560 million barrels of oil equivalent, accounting for about one fifth of the total global energy export.

China and other developing countries'energy demand growth brought about by rapid economic development will rapidly push up energy prices. In the case of oil, crude oil prices will soar to $200 a barrel in 10 years (unchanged in 2008), at least firmly above $150 a barrel. There is little doubt that the real prices of coal, natural gas, liquefied gas and uranium will double today. The issue of carbon dioxide emissions brought about by the growth of energy consumption is increasingly becoming the focus of global attention. In the next 10 years, global climate and environmental issues will surpass terrorism as the number one international issue. According to BP World Energy Statistics, annual global energy consumption increased by about 2 billion barrels of oil equivalent from 2000 to 2008, of which China's consumption increased by more than half.

The only way out of the energy dilemma is to vigorously develop non-carbon-based energy sources such as hydropower, nuclear power, wind power and even solar energy, and vigorously develop and promote clean energy technologies such as sulfur recovery and carbon capture. It is expected that by 2020, the proportion of coal in China's energy consumption will decrease from 70% to less than 60%, the proportion of relatively clean and efficient oil and gas will increase from 23% to nearly 27%, and the proportion of non-carbon-based energy will increase from 7% to 15% or more. [next]

Trend Four: Banks will move towards "financial Department stores"

Bank leveraged products will have a positive impact on real economic investment by improving the efficiency of capital use

In the next 10 years, China's commercial banks will change from traditional "financing intermediary" as the core to "wealth management" as the core, and retail business will become the main source of profits for future banks. The proportion of public business, which contributed the most to bank profits, will decline significantly.

In the future, banks will reduce their dependence on deposit-based fund-raising. Highly leveraged financial derivatives brought about by financial innovation will greatly improve the efficiency of fund use. The profit model of traditional bank deposit-loan spreads will gradually give way to the profit model of intermediary business.

In the future, the significance of banks to customers will no longer be "deposit tanks" and "loan wholesalers", but "financial Department stores" in many fields, such as radiation insurance, securities, funds and property rights management, centering on banking business. Wealth asset management of customers will be the core business of banks.

In the future, when banks manage their clients'finances, the investment field will expand from traditional fields such as stocks, bonds, funds to structural derivatives, commodities and even works of art.

Banks will no longer be dominated by over-the-counter services. At present, the financial terminals in bank outlets for customers to pay, deposit and withdraw money and inquire are expected to "fly into ordinary people's homes". Online banks will complete all kinds of business that can only be handled in bank outlets in the past. As the most convenient payment tool launched by banks for customers, bank cards will have a great leap in function and appearance.

With the gradual penetration of the business of non-bank financial institutions into banks, in the pursuit of economies of scale and risk diversification considerations, large

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