The Challenges of Governance Structure, Trade Disputes and Natural Environment to China's Growth

Wing Thye Woo, University of California Davis

Viewing the Chinese economy as a speeding car, there are three types of development that could crash the car: (1) a hardware failure, which is the breakdown of an economic mechanism (analogous to the collapse of the chassis of the car), e.g. a banking crisis; (2) a software failure, which is a flaw in governance that creates social disorders (analogous to a fight among the people inside the car), e.g. the state not being able to meet the rising social expectations about its performance because many of the key regulatory institutions are absent or ineffective; and (3) a power supply failure, which is the loss of economic viability (analogous to the car running out of gas or having its ignition key pulled out) e.g. an environmental collapse or an export collapse.
The fact that China has recently declared that its most important task is to build a Harmonious Society (described as a democratic society under the rule of law and living in harmony with nature) suggests that improvements in governance and protection of the environment are among the most serious challenges to achieving sustainable development. The greatest inadequacy of the Harmonious Society vision is the absence of an objective to build a harmonious world because a harmonious society cannot endure in China unless there is also a harmonious world, and vice-versa. The large amount of structural adjustments in the developed countries generated by rapid globalization and technological innovations has made the international atmosphere ripe for trade protectionism; and environmental degradation has made conflict over the global environmental commons more likely. China's quest for a harmonious society requires it to help provide global public goods, particularly the strengthening of the multilateral free trade system, and the protection of the global environmental commons. Specifically, China should work actively for the success of the Doha Round and for an international research consortium to develop clean coal technology.

About the speaker
Wing Thye Woo is Professor in the Department of Economics, University of California at Davis. He is also Senior Fellow in the Global Economy and Development Program, and the Foreign Policy Studies Program at Brookings Institution, and the Director of the East Asia Program within the Center for Globalisation and Sustainable Development at Columbia University. His current research focuses on the economic issues of East Asia (particularly, China and Indonesia), international financial architecture, economic growth, and exchange rate economics. He has published over 100 articles in professional economic journals and books on these topics His article "The Monetary Approach to Exchange Rate Determination under Rational Expectations: The Dollar-Deutschemark Case," Journal of International Economics (JIE) , February 1985, was identified by JIE in 2000 to be one of the twenty-five most cited articles in its 30 years of history. From 1994-96, Wing Thye Woo led an international team (which included Leszek Balcerowicz, Boris Fedorov, and Jeffrey D. Sachs) to study the reform experiences of centrally-planned economies. This report was published by MIT Press as Economies in Transition: Comparing Asia and Europe, 1997. In 1998, Wing Thye Woo headed the project “Asia Competitiveness Report 1999” to analyse the Asian financial crisis for the annual meeting of the World Economic Forum in Davos, Switzerland, February 1999. The updated report was published as The Asian Financial Crisis: Lessons for a Resilient Asia, MIT Press, 2000. In 2001, Wing Thye Woo helped establish the Asian Economic Panel (AEP), now sponsored by Columbia University, Keio University, and the Korea Institute for International Economic Policy. AEP is a forum of about 50 leading specialists on Asian economies which meets twice a year to discuss economic issues that are of particular importance to Asia. Selected papers from the meetings are published in the new journal Asian Economic Papers (of which Wing Thye Woo is the editor), MIT Press. Wing Thye Woo has advised a number of governments on macroeconomic and exchange rate management, state enterprise restructuring, trade issues, and financial sector development. He was a member of Consultant Team to China's Ministry of Finance that helped to design the tax and exchange rate reforms implemented in January 1994; and the report has been published by Oxford University Press as Fiscal Management and Economic Reform in the People's Republic of China, 1995. During 1997-1998, Wing Thye Woo served as a special advisor to the U.S. Treasury; duties included accompanying Secretary Robert Rubin to meetings in China, and to the IMF-World Bank annual meeting in Hong Kong. From 2002-2005, he was the Special Advisor for East Asian Economies in the Millennium Project of the United Nations. In July 2005, he was appointed to the International Advisory Panel to the Prime Minister of Malaysia. In 2004, the University of California at Davis awarded Wing Thye Woo its Distinguished Scholarly Public Service Award, and the Institute of Strategic and International Studies in Malaysia appointed him a Distinguished ISIS Fellow. In November 2004, he delivered the Chang Chi Ming Cambridge Public Lecture on Chinese Economy at the University of Cambridge. In March 2006, he was appointed a Chang Jiang Scholar (by the Ministry of Education of China based on nation-wide competition among universities) at the Central University of Finance and Economics in Beijing, China. Wing Thye Woo was born in 1954 in Penang, Malaysia, where he was a member of the 2nd. Georgetown (S) Senior Scout Troop, out of Methodist Boys' School. He graduated from Swarthmore College in 1976 with a B.A. (High Honors) in Economics, and a B.S. in Engineering; received an M.A. in Economics from Yale in 1978, and an M.A. and a Ph.D. in Economics from Harvard in 1982.

Venue: Auditorium 0.009, Maastricht School of Governance, Kapoenstraat 2, 6211 KW Maastricht

Date: 09 September 2008

Time: 16:00 - 17:30  CEST