Edmund Phelps, winner of the 2006 Nobel Prize in Economics, yesterday said the Chinese economy will grow more independent from the West over the next 10 years, driven by enterprise innovations and domestic consumption.
“China is surely moving toward less export-dependent and [is becoming] more dependent on domestic investment activities,” he told a Taipei forum titled “A vision of possible developments in the global economy.”
By then, its economic prowess — in terms of unemployment rate and workers’ productivity — will mirror the US in its best days, he said.
The Columbia University academic also pointed out that China will not fail in efforts to step up domestic innovations — a pivotal element he said US enterprises have been lacking, and that this will propel its investment activities to a greater height.
One of the reasons was rising Asian currencies against the greenback because of the sluggish US economy, which has seen enterprises investing less in commercial activities and productivity slumping in the past decade, Phelps said.
In Phelps’ view, the US is far from seeing a full recovery to pre-financial crisis levels, with unemployment hovering between 7 percent and 8 percent as the best case scenario.
This compares with a 4.6 percent US jobless rate during former US president George H.W. Bush’s administration and 5.6 percent in the mid-1990s, he said.
In contrast, Asia, especially China, and other emerging markets like Brazil will catch up with the US in economic growth.
This is because the US is in “the midst of a long structural slump,” obvious from the fact that more investors are shortsighted instead of looking far ahead with their investment portfolios, he added.
The Nobel laureate said US stocks are now closely linked to company quarterly -earnings, which strays from the fact that share prices should reflect investors’ anticipation of a company’s worth over the next five years.
“CEOs are now more concerned with hiding their quarterly earnings targets, rather than thinking about the company’s innovations for the next five years,” the 78-year-old Phelps said.
Phelps last year took up the position of president-dean of the New Huadu Business School at Minjiang University in Fuzhou, China.
He said this position offers him the proximity to study the impact of the Chinese economy.
Phelps yesterday also witnessed the signing of a memorandum of understanding between New Huadu and Taiwan’s National Chengchi University, which co-launched a program to develop entrepreneurship among their students.
A total of 60 students will be selected from both schools and sent for courses in Singapore.
They will be offered employment at New Huadu Industrial Group Co (新華都集團), a conglomerate based in Fujian Province that is engaged in the property, retail, tourism, mining and machinery sectors.
‘SHORT-TERM ECONOMIC PAIN’: A military takeover would only temporarily weigh on wafer production on both sides of the Taiwan Strait, IC Insights said Taiwan has more chip manufacturing capacity than any other economy in the world, US-based market information advisory firm IC Insights said in a research paper last week, cautioning that the nation’s strength could prompt China to attempt to take over Taiwan. Taiwan commanded 21.4 percent of global installed IC capacity, ahead of South Korea’s 20.4 percent, Japan’s 15.8 percent and China’s 15.3 percent, North America’s 12.6 percent and Europe’s 5.7 percent, IC Insights said. Taiwan is one of two countries that uses 10-nanometer technology or better to produce wafers, holding 62.8 percent of global capacity, with South Korea holding the remaining 37.2
SELF-SUFFICIENCY: Alibaba is one of a number of Chinese firms that has answered Beijing’s call to invest in the development of cutting-edge technologies Alibaba Group Holding Ltd (阿里巴巴) yesterday unveiled a new server chip that is based on advanced 5-nanometer technology, marking a milestone in China’s pursuit of semiconductor self-sufficiency. The Chinese tech giant’s newest chip is based on micro-architecture provided by the SoftBank Group Corp-owned Arm Ltd, it said. Alibaba, which is holding its annual cloud summit in Hangzhou, China, said that the chip is to be used in its own data centers in the “near future” and would not, for the time being, be sold commercially. “Customizing our own server chips is consistent with our ongoing efforts toward boosting our computing capabilities with better
AGGRESSIVE STEP: With the new processors, Apple is aiming at the high-end chips Intel has provided for the MacBook Pro and other top-end Macs for about 15 years Apple Inc on Monday took the most aggressive step yet to strip Intel Corp chips from its computers, announcing more powerful homegrown Mac processors alongside a total revamp of its MacBook Pro laptop computers. The company showcased the chips at an event called “Unleashed,” which also included its latest audio products. The new components, called the M1 Pro and M1 Max chips, are 70 percent faster than its M1 predecessors, Apple said. It also unveiled a redesigned MacBook Pro, adding larger screens, MagSafe charging and better resolution. With the new processors and devices, Apple is aiming squarely at the high-end chips that Intel has
PRICE SPREAD: Oil trading under the Brent futures contract is giving the US a hefty edge in pricing, increasing the rush to secure cheap fuel as winter approaches Asian demand for US oil is rising as the energy crisis boosts prices for other crudes that are priced against the global Brent futures contract. China and other Asian buyers have been snapping up supertankers of US oil for delivery next month and seeking more for December, some traders have said. Most buyers are seeking US grades that had recently slumped to the lowest levels in more than a year, with an added incentive after Beijing awarded millions of tonnes of crude oil import quotas. A wide spread between Brent and West Texas Intermediate (WTI) oil futures is accommodating higher US crude
RSS