'Reform Amid Transition'
China Forum speaker discusses the future of the Chinese economy
3:49 p.m., Dec. 6, 2012--In the next eight years China’s economy will undergo significant reformation, according to Dennis O’Brien, the lecturer at the second installment of the China Forum series held Friday, Nov. 30 at the University of Delaware.
O’Brien, the current president and CEO of China Monitor Inc., provided a detailed examination of China’s economic process as part of the China Forum hosted by the Confucius Institute of UD.
Studies in Seoul
As one of the most influential executives in the founding and development of the econometrics and the applied economics industry throughout the world, O’Brien delivered an insider’s view of the forces shifting China’s economy.
“The Chinese are getting rich, fast. They are buying the things that the American middle class buys,” said O’Brien during his lecture, called “Reform Amid Transition: New Challenges For China’s Economy.”
O’Brien mentioned six “unrelenting forces” connected to China’s economy:
- Massive investment;
- Critical investment;
- Middle class boom;
- Energy independence; and
- Inland development.
These forces have turned China’s economy into one propelled largely by consumption.
“Consumption is now driving the economy and it will continue,” said O’Brien. “There is more conspicuous consumption, more services, more meat, more shopping in supermarkets, more travel and medical expenditures.”
Of course, amid periods of transition and reform, challenges arise.
A significant migration from rural areas to cities has already begun in China and will continue for the foreseeable future. By 2020, more than 850 million Chinese citizens will live in urban settings, according to O’Brien.
To afford housing and the cost of living, urban Chinese will need well-paying jobs.
“They are becoming too proud to work in a factory production setting,” said O’Brien.
In the near future, urbanization will lead to a necessity for more skilled workers, something O’Brien believes could be an issue.
“There is an incredible absence of critical skills,” said O’Brien. “You have to transform construction workers into information workers.”
Increased urbanization will also create a need for affordable housing.
“Go to Beijing and the rent prices are astronomical, twice what they are in Delaware, for sure,” said O’Brien.
A promising future
Despite the trials that a changing China will endure, O’Brien has an optimistic outlook for the next eight years.
“China’s people will be much better off economically. Its people will be much better educated and informed,” he said.
O’Brien, who served as a Marine, also made predictions about China’s government and military power. According to his predictions, China’s military power not the U.S. will dominate Asia. He also forecast that the political stability of the country will be tested but it will adapt and survive.
A possible partnership
O’Brien concluded his lecture with a plea for cooperation between the U.S. and China, two countries “destined to be partners.”
“China’s economic power will be as great as America’s. It already is but many people don’t realize it,” he said.
O’Brien also noted that it is important to facilitate understanding between China and the U.S., something the China Forum lecture series encourages.
About Dennis O’Brien
G. Dennis O’Brien is a professional economist with a wide range of knowledge in industrial economics, microeconomics and finance. Over his 40-year career, O’Brien has worked in 67 countries developing advanced economic information systems.
Over the past two decades, O’Brien has worked in China as a foreign correspondent for China Daily and China Business Weekly based in Beijing. He is now the chief American adviser to the State Information Center and president and CEO of China Monitor Inc.
Article by Kelley Bregenzer
Photos by Lane McLaughlin