Session summary
Closing plenary: LONG-TERM POTENTIAL FOR EXPORT-LED GROWTH
11 SEPTEMBER 2010, 15:30 – 17:00
SPEAKERS
- Mr. Long Yongtu, Secretary-General, Center for the Study of G20
- Mr. Ghulam Hussain, Secretary of Commerce, Bangladesh
- Mr. Yang Hexiong, Senior Vice President, Huawei Technologies
- Mr. Gregory May, Acting Consul General, US Consular Office, Chengdu, China
- Mr. John McCarthy, CEO, Leisure Partners, Mexico
MODERATOR
- Mr. Akrum Bastawi, Head of International Cooperation, Office of the Minister, Ministry of Trade and Industry, Egypt
VIDEO
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SUMMARY
The final plenary session of WEDF 2010 examined the long-term potential for export-led growth and was opened by Mr. Long who said that China had used exports as an important engine not only for economic growth but also for poverty reduction.
Although during the crisis there had been some criticism of the policy and talk of imbalances, giving a bad name to exports, it should be understood that it was China’s intention gradually to shift from an export-led growth pattern to one led by domestic consumption. But this would take time.
China had the pressing problem of hundreds of millions of people living in poverty in rural areas. Its policy was to solve this through urbanization, moving 10 million people annually from the rural areas to the cities, and these people needed jobs that could only be provided by export industries. Therefore, the reliance on exports would continue.
Mr Yang illustrated the potential for long-term export-led growth with the experience of Huawei Technologies, a company that has evolved since its foundation in 1988 within the context of China’s “opening up” policies, to being a multinational enterprise present in 100 countries and an important investor in Africa, where it has created 14,000 jobs, transferred new and environmentally friendly technologies and provided training for 12,000 future African ICT professionals annually through its six training center.
He said the company had embraced green technologies and was developing environmentally friendly approaches. It had set up six training centre in Africa and was turning out 12,000 information and communications technologies (ICT) professionals annually to support the growing industry.
Mr. May highlighted three key trends in the relationship between the United States (US) and China that, he said, would impact the ability of the developing and least developed countries to expand their exports.
The first trend was the recovery of the US economy, which was under way, even if more slowly than desirable, coupled with the launch of an ambitious plan to expand exports, particularly to China. The second trend was the rise of the Chinese consumer, which was closely related to the rise in Chinese wages.
Higher wages in China would help alleviate the gap between rich and poor and encourage China’s exporters to move up the value chain, at the same time as helping China to rebalance its economy by increasing domestic consumption.
This led to the third trend, which was the shifting of some export jobs out of China as costs rose. Some jobs on the coast were already starting to move inland to lower cost areas, others would undoubtedly move overseas. Now that costs in China were rising, other countries were seeing increased investment in export industries.
Mr. May said countries seeking to follow China’s export-led growth path, should look beyond the well known factors of low wages, large population and favourable policies to note the important role played by infrastructure development and education. In raising examples of labor rights, health care and pensions he concluded that countries need to judge export strategies not on the size of the trade surplus but on how society benefits.
Mr. McCarthy said that any country looking for an industry that linked trade and development should consider the tourism industry. Infrastructure that served tourism, also served the people. Free trade equalled free travel. Hotels built for local markets could serve international tourism. Mr. McCarthy concluded with a cautionary note about the potential pitfalls of hasty resource exploitation. He stressed the importance of long term planning and public-private partnership to ensure the sustainability of tourism strategies and positive spillovers to the economy and society.
The industry accounted for 10% of the world economy and this was predicted to increase in the next 10 years. Today 1 in 12 jobs globally were related to travel tourism, and by 2020 it would be 1 in 10. Tourism could thus play a significant role in poverty alleviation, since it was labour intensive and it was easy to bring people into the sector. It also employed more women than men.
Mr. Hussain described Bangladesh’s decision to adopt an export-led growth strategy in 1991 following a period of focusing on import-substitution. Exports had risen from US$ 1.7 billion that year to about US$ 7 billion in 2001 and more than US$ 16 billion last year, although there was still a trade deficit.
Challenges faced by the country included reliance on a few products and markets. There was a need to diversify both, and the country was looking to expand its neighbouring markets in South and South-East Asia. In addition, there was a need to develop the domestic market.
Much of the ensuing debate focused on China’s urbanization programme, and how to avoid the creation of urban slums as had happened in many developing country through uncontrolled rural-urban migration.
Mr. Long clarified the controlled nature of China’s process, which required the creation of jobs and development of social safety nets, as well as guaranteeing the rights of workers to return to their villages if they lost their jobs in the cities.