Justin Yifu Lin presents himself more confident than the Chinese government itself. At the beginning of the year, the economist predicted a six percent growth rate for the country’s economy for 2022. The government forecast only 5.5 percent. Without Covid, annual growth of as much as eight percent is possible by 2035, estimates the 69-year-old honorary dean of Peking University. Analysts from European rating agencies are rubbing their eyes in disbelief at such optimism. They see China growing by just over four percent this year.
But confidence is an essential building block for Justin Yifu Lin’s career. This was also the case in 1979, when the Taiwanese-born economist looked from the shore of Kinmen Island toward the People’s Republic and boldly climbed into the water. Legend has it that the deserting soldier used two basketballs to help him swim to Xiamen Island, two kilometers away. In a sense, Lin fled in reverse from democratic Taiwan to the authoritarian People’s Republic.
His motivation? Inner conviction: Based on his cultural, historical, political and economic understanding, he had come to the conclusion that the return to the motherland was historically inevitable, he wrote shortly after his escape. He left his family behind.
He then studied Marxist economics in Beijing. It was there that he met Theodore Schultz. The American Nobel laureate arranged a scholarship for him to pursue a doctorate in Chicago, where he researched topics such as China’s opening to a market economy.
Justin Yifu Lin sees a major reason for the country’s rise in the utilization of the comparative advantages of labor in the country. Labor is cheap in China, a fact that was long underestimated. After all, heavy industry from the time before Deng Xiaoping’s reforms in 1979 was primarily capital-intensive. From then on, however, China relied on mass production, on nimble hands that didn’t cost much.
Swift rise to government advisor
Justin Yifu Lin turned down an offer to teach in the USA after earning his PhD. Instead, he is drawn back to China. “The country was changing from a planned economy to a market economy. That was fascinating,” he told Brand eins magazine looking back. In 1986, he returned to Beijing and founded an economic policy think tank, the China Centre for Economic Research (CCER), at Peking University in 1993. He quickly rose to become one of the most important government advisors.
In 2008, he was appointed Chief Economist of the World Bank. During his four-year term, he promoted his New Structural Economics. This theory aims to help emerging and developing countries achieve greater prosperity. According to Justin Yifu Lin, successful economic development always requires the interaction of state and market.
In industries where working conditions are more favorable than abroad, the state must use intelligent strategies and investments to promote innovation in the country. That’s what China has done – successfully, in his opinion: “The world,” Lin once said during his time at the World Bank, “can learn a lot from China. And I want to help with that.”
Presumably less influence on the government
Today, the university professor and author of more than 20 books is also an advisor to the Chinese government. But recently, his influence on politics has probably waned. At least that is what China observer Angela Stanzel suspects. He is not to blame: “The Xi Jinping leadership is obviously less and less concerned with economic development and more and more with party-political control,” says the China expert at the German Institute for International and Security Affairs in Berlin.
On foreign trade, Justin Yifu Lin is in line with the government’s stance. Beijing accuses the United States of hindering its rise. Lin also laments that the US stifles the Chinese economy by imposing sanctions, such as those against the IT group Huawei.
But as is often the case, he is confident that this situation will soon change – in China’s favor. The country’s enormous growth will do the trick. “One day, our economy will be twice as strong as that of the United States.” He then expects the United States to follow China’s lead. “Only in trade with China can the US benefit,” he said at an economic forum in Beijing in May. Andreas Schulte
Prof. Justin Yifu Lin will discuss the topic “Can China achieve its 2022 GDP growth target of 5.5%?” at an event hosted by IfW Kiel as part of the Global China Conversations series on Thursday (June 16). China.Table is a media partner of the event series.