First posted to China Resurgent Forum on June 29, 2009 at the following link:
www.network54.com/Forum/238054/thread/12...th+my+12-Guidelines.
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Wen’s call for domestic technologies in accord with my 12-Guidelines.
“Chinese Premier Wen Jiabao has encouraged domestic enterprises to make breakthroughs in science and technology development to weather the global financial crisis.”
english.people.com.cn/90001/90776/6689285.html
The above is a quote from an article published in the peopledaily.com at the link above. I’ve always said that China must develop its own domestic technologies in order to sustain rapid developments for the next 30 years until China is fully developed to give its 1.5 billion people by 2040 a per capita GNP of some $50,000 equivalent. And combined with the urbanization of the farmers China would be able to give its people the highest standard living in the world while making China the most powerful nation in the world militarily with less than 2% of GNP for military spending.
China is currently doing some 20 trillion yuan of foreign trade which is equal to some 60% or more of China’s total GDP of 30 trillion yuan or some $4.4 trillion at the current exchange rate of 6.8 yuan to the dollar. If the per capita GNP of China is to be some $50,000, then the total GNP would be some $75 trillion for a population of 1.5 billion by 2040. If China relied on exports to the extent of some 60% of its GNP, then that is some $45 trillion. In 2008 the world total output or GWP was some $62 trillion in nominal value. The total world export value was some $16.28 trillion f.o.b. China’s total export value in 2008 was less than $1.5 trillion. From this simple example it is obvious that China cannot increase its exports by $43.5 trillion in 30 years’ time. Certainly China’s exports in 2040 cannot be some 3 times more than the total world exports of 2008. Even if China could produce that much products the rest of the world cannot afford to buy them. Already the world cannot afford to buy all the goods exported by China now in 2009 which is why America and other Western countries and Japan are having serious recessions. Therefore, it is very obvious that if China is to give its people a high standard of living, the Chinese people must produce the goods and services for the consumption of the Chinese people themselves.
With this understanding, it is obvious that the Chinese government must immediately deemphasize foreign trade and concentrate on the development of the internal domestic economy. But China cannot afford to import all the high tech products that it needs which would cost tens of trillions of dollars. This means that China must develop its own high tech products which incidentally would provide hundreds of millions of jobs to fully employ all the Chinese people of working age. Please read my article, “Part 1. Technological advancement versus exchange rate manipulation.”
www.network54.com/Forum/371672/thread/11...e+rate+manipulation.
“Part 2. Technological advancement versus exchange rate manipulation.”
www.network54.com/Forum/238054/thread/11...e+rate+manipulation.
The above two articles explain how expanding domestic technologies will create hundreds of millions of jobs for the Chinese workers.
With domestic high technologies China can replace scarce resources such as oil with domestically generated replacements. For example, hydrogen can be produced from electricity generated by wind, solar, and nuclear powers. Then the hydrogen can be used to power fuel cell cars thus eliminating the need to import oil. Also, once electricity is generated by renewable sources or by nuclear energy it can be used to charge up big batteries overnight in the home garage. It is even more efficient to use electricity to power cars because 200 ampere hours of charge can drive a car for 300 miles. Electric motors are 90% or more efficient while gasoline engines are only some 30% efficient. Moreover, using electricity produced by renewable energies or nuclear energy will reduce global warming and pollution. Chinese cities are already the most polluted in the world and causing seriously deadly lung diseases to the urban residents. Replacing gasoline engines burning imported oil with electricity generated by renewable and nuclear energies will reduce diseases and improve the health and raise the quality of life for the Chinese people. Therefore, it is obvious that advancing Chinese domestic technologies will allow China to provide hundreds of millions of highly productive and highly remunerative jobs that will on the one hand make the Chinese workers rich while on the other hand will produce all the goods and services they need and want and above all improve the quality of life for the Chinese people.
And, of course, once China can produce all its own high quality high tech products it can terminate its low tech exports because China no longer need to export low tech products in order to earn the foreign exchange to pay for the high tech imports. The high tech export products can be made by high wage workers while earning higher amounts of foreign exchange per unit of labor, energy, and raw material. This will allow the workers to earn higher incomes while reducing the amounts of energy and raw materials used. This in turn means more energy and raw materials can be allocated for the benefit of the Chinese people.
Therefore, it is essential that the very first thing the Chinese people must do is to develop the domestic high technologies. In calling for more domestic development of high technologies, Wen is in accord with my 12-Guidelines. Only by adhering to my 12-Guidelines will China be able to advance rapidly. Hu’s emphasis on his “Socialist Countryside” while relying on foreign technologies and foreign trade is counterproductive and will ultimately cause catastrophic slowdown of China’s economic progress. China must advance its domestic technologies while simultaneously urbanize its unemployed and underemployed farmers if it hopes to make the Chinese people the richest in the world and the Chinese nation the most powerful in the world.
To read my 12-Guidelines for the rapid development of China, please go to the following link:
www.network54.com/Forum/thread?forumid=3...57&lp=1105667957
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