Cspan. Org slash impeachment. President trump holds a Campaign Rally in wimilwaukee, wisconsin live this evening. Its online at cspan. Org or you can listen on the free cspan radio app. Next, a look at chinas economy and economic trends. This is two and a half hours. Please be seated. Good morning. Im director and senior fellow of the china center here at brookings. Its my pleasure to welcome you to this important event on chinas longterm Economic Outlook and its global implications. This event is unusual in presentday washington for at least three reasons. First, as it has been widely perceived, people here have been preoccupied with Current Issues and immediate challenges, as the year 2020 has barely gun, there are already several pressing geopolitical dilemmas on which our policymakers must focus. As we cast into the new decade, it will be important to look ahead toward chinas economic progress and the challenges it will present, both for china and for the world. Chinas Rapid Economic Development has arguably been and will continue to be the most consequential global story of the 21st century, and its ramifications surely go far beyond the economic domain. It is also important to note that traditionally, and perhaps even today, china tends to take a longterm perspective and to outline its objectives. As the famous chinese saying goes, those who do not plan for the distant future will find trouble at their doorstep. Second, in recent years, washingtons course regarding china tends to look at the country in a monolithic way, and therefore overlook the internal debate and the multi dimensional assessments within the chinese community. Of course the same observation may also be valid when it comes to the other side of the pacific. It is truly in valuable as we are going to hear from our chinese colleagues from beijing to have a comprehensive understanding of how they perceive the demographic, economic and administrative challenges that china confronts in its drive for a fully developed country by 2049. A discussion of these challenges, chinas aging population, growing economic disparity, potential middle class income trap, social dislocation due to rapid urbanization, and environment degradation. The list actually is quite long. This discussion will help us grasp the policy choices and social political restraints in beijing in the years and decades to come. The third and final reason that this is an unusual event is the fact that this Conference Today and soon to be released book reflects an impressive example of u. S. China scholarly collaboration. The book, which began in 2018, is an Indepth Research and intel le intellectual partnership. It presents outcomes of two workshops in december 2018 and may 2019. I would like to extend my congratulations to the editors of the book, as well as the other contributors from both sides for their excellent scholarly work and the spirit of teamwork. Especially at a time when some believe that the United States and china should decouple, even in the area of scholarly and educational exchanges. We are fortunate to have so many distinguished economists and experts in other academic fields to speak to us this morning, especially our colleagues from the National School of development out of peking university, one of chinas think tanks affiliated with one of chinas most prestigious universities. Bei will first present the Main Findings of this study and then be followed by two panels moderated by my esteemed colleagues. Without further adieu, please join me in welcoming him to this stage and giving our participant a warm round of applause. Thank you very much. Thank you, dr. Li, for the introduction. My name is yoyung of the National School of government in peking university. As dr. Li introduced, we have done a joint project, a book project with brookings, and finally at this stage were happy to present the results of the project to the american audience. This actually, before we have done this in china. So before my colleagues, and also friends in brookings to prevent the main results of the book, let me take this opportunity to say a few words about the National School of government. National school of development was first created in 1994 with the name of china center for economic research. We were quite unique at that time, because all of us were trained abroad. But now it is more than 25 years ago. And then by 2008 we changed our name to the National School of development. We did that because the center was expanded and had a much wider range of issues in china. So now the National School of development, of course we do teaching, we do research, but as dr. Li said, we are also a major think tank in china. We do policy for the government, and this book project is the results of policy advising. So with that, i would also say a few words about our intention to work with brookings on this project. China has an ambitious plan to make the country one of the rich country in 2049. Its socalled a second goal. So my take on becoming a rich country is that countries that have a gdp is going to be at least 45 of american level in real terms. Today chinas income is about 27 of american level in real terms. So this is going to mean that china will have to almost double the ratio in the next 30 years. Thats a greater challenge because china is already a huge economy. The size of the economy is 14 trillion u. S. Dollars, so in order to grow, even by 3 , thats going to be hard because that means almost a medium sized country. So in this book project we looked at two sets of challenges facing china. One is domestic, the other one is international. Domestically, for china to have further growth is going to be aging. Aging is a major subject in our book project. My colleagues are going to present to me i think encouraging results, because most of the problems are aging, will be overcome by various forces in the future. On the international front, china probably faces more challenges because the International Environment has dramatically changed in the last decade. Of course in the center is u. S. China relations. So we may not want to take it, but in the end we have to look at the competition and the cooperation of those two largest economies, and in this book project we deal with that particularly like technological competition between the two countries, but we also look at issues in which the two countries can cooperate together. In the next several decades on the world stage, the big play must be u. S. China relations and manage well this relationship is going to be not just good for both countries, but also good for the whole world. So for that, i feel really thankful for Brookings Institute to work with us, and particular thanks for the team to work with us. As dr. Li just said, the two sides can still Work Together, show the world that two countries still have a strong will to come together. So competition probably is inevitable, but we still have a lot of room for collaboration and cooperation. And for that, i wish todays workshop will be successful. Thank you. [ applause ] good morning. Im david from the china center here in brookings and im going to moderate this panel. We called it domestic challenges that chinas facing as it aspires fo good morning, im david dollar from the china center here at brookings and im going to moderate this panel. And we called it domestic challenges that china is facing as aspires for these goals for 2049. Ill just remind you there are a number of important issues were not going to cover on this panel. Well get into Financial Sector reform in the next panel and issues of state enterprise reform might come up there. But what weve chosen to do here is focus on four issues that generally fall in the category of social and environmental challenges. As my colleague chung li mentioned, we have a lot of different discussions in washington concerning china. I dont think we have covered that much some of these important domestic issues. So im very happy that were going to start with professor yen and shes going to talk about this critical issue of demographics. I wa i wanted to start with that because i think thats a defining issue for china. And then the Research Fellow all of the colleagues are from the National School of development at peking university and were going to talk about the phenomenon of convergence and what are some of the paths and policies that will affect that. And then were going to talk about consumption, and that may seem like a bit of an odd topic, but thinking about the different aspirations, part of which is about per capita income, in recent years most of chinas growth on the demand side has come from consumption, investment has slowed down dramatically, there are fewer and fewer good investment opportunities. Theres not much potential for net ex sports to contribute to chinas growth in the near future for a variety of reasons, so china has been growing based on consumption. So as it develops and ages, its natural to ask whats going to happen to consumption. And in all of these we want to think about what are some of the policies that will direct outcomes in a better direction. And then last but not least, professor tao is going to talk about the environmental issues, including Climate Change. So ive asked each of them to stick to about seven minutes to start, so we should have time to interact and open up in the audience and were going to start with professor yen on demographics. Thank you. So for the demographics, in this chapter we actually find five main trends of the population aging. So number one is population aging, will deepen in the next 30 years. By 2049 the chinese population over age 55 will be close to 400 million, which accounts for more than a quarter of the population. The working age population, we will shrink. It started to shrink already and it will further shrink from 990 million to about 800 million. 990 million to 800 million, which is about 200 million reduction in this 30 years. Number two, not only the total population trend of the aging, but also the composition, we will shift from the young old to the oldest old. For young old we mean 55 to 80. For oldest old we mean age 80 and above. So by 2049 the propulsion of the oldest old in the aging population will be about 35 . Right now its about 20 . So that is a very big increase. Number three, the composition of the working age population will also change. By 2049, the propulsion of the older workforce will increase sharply from about 17 to 27 . For older workforce, we mean age 55 to 64. So the workers themselves will also become older. Number four, the total dependents ratio will increase to about 72 by 2049, and among the total dependents ratio, the major part of that will be the independence ratio. So the independence ratio will reach about 50. And the burden of care for the elderly will be much larger than the burden for child care. Number five, the family size will decrease from about 2. 9 currently to about 2. 5. That means we will have greater propulsion of the elderly living alone. So the elderly People Living alone, we will reach about 53 million. That will be about 10 of all of the households. So thats the main trend. So we will have challenges according to that. There are three major challenges we will face. Number one, that is a challenge for Economic Growth, so the reduction in the working age population and the increase of the population aging will lead to increase the labor costs and contraction of profit margin. And also it may lower the rates of savings and investment, and of course my colleague will address the importance of consumption later. Number two challenge is the financial pressure on the pension system. We will have the risk of a funding gap between it will become more dominant with acceleration of the population aging, especially currently we talk about the individual accounts and also the burden. And with a sharp increasing of the number of pension recipients and the decreasing in the contributors, we will have more burden on pension system. Number three challenge is the rising burden of elderly care. So according to the research, there will be about 30 of the elderly people, the oldest old, we will have some sort of difficulty in activity of daily living, that means they will need elderly care, very intensive elderly care. But with the composition change, we will have more oldest old and also there will be more elderly People Living alone and a shrinking of the number of children. That will become a big challenge in the future. So thats basically the three major challenges we face, yeah. So i think i would actually like to follow up immediately with a policy question. So in your chapter, among all those statistics, the one that really grabbed me is this rising share of the older workers, the 5564yearold cohort. So the labor force is going to decline pretty claumtl decline pretty dramatically, so what are the policy implications of that . What can you do to keep that group productive and in the labor force . I think there are at least two policy suggestions for this part, the shrinking of the working age population. Number one, is the retirement system. I think we need to reform the retirement system. Currently for men, chinese men, we have a retirement, mandatory retirement age of 60, but for Chinese Women we have a retirement age of 50 for blue collar workers, and 55 for white collar workers. That is actually very young, depending on the current Life Expectancy. So we need to consider to extend the retirement age. Thats the first one. And the second one, i think we should consider the education and the Training Program. So we are talking about the shrinking of demographic dividend, but now we may actually consider how to improve the demographic bonus for that. So one way we think about that, you just mentioned we have the larger fraction of the elderly workers, the education of those elderly workers is quite low. So we may have to improve their education of them. Not the regular education level, but through the Training Program. So not only the regular education of the relatively young, but also the Training Program for the relatively older workers. Also, i think health is quite important. According to the retirement study, i am involved in, although we have longer Life Expectancy now, but the health is not so good. So we have to invest more in health in order to improve the Human Capital, i think. Thank you very much, professor. All of the topics in this panel are interrelated, so later well get to some of the air pollution issues and how thats affecting peoples health. So all of our issues are interrelated. So thank you. So now im going to talk about convergence, as dean yao mentioned, one aspect is to reach 45 per capita by 2049 and that in general is what we think of as a convergence denom non. I believe its up to 47 and the aspiration is for 2045 so lets talk about the flame work. Good morning, everyone. Glad to be here. I would like to talk about two issues. One is the gross prospects and the other thing is successful convergence. The first one is the gross prospects. Our gross projections is based on the convergence of per capita gdp in the economy. According to the gross theory and empirical evidence, its Lower Per Capita gdp worth as initial period, the faster it open up, the faster it grow in decades. Actually, i will not go into detail about the techniques and i will go directly to the results. And on the basic assumption of successful convergence, we have found the following results. Number one is that the potential gdp growth of china in the next three decades will decline gradually from around 7 in 2015 to around 3 in 2049. And number two, is that the per capita gdp of china relative to that of the United States will rise gradually from 24 in 2015 to around 65 in 2049, according to the database actually, the database actually takes account the adjustment. Number three is that the share in the World Economy approaches 24 in the year of 2049. And number four is that china is expected to surpass the u. S. In terms of gdp in the year around 2030. The second thing is the successful convergence, the following things are important. Number one was suggested that especially the trade avenues is the prerequisite for developing countries to narrow the gap with leading economies. Because it provides opportunities for developing countries to Access Technology spillover from the leading economy, and the access actually is vital for the economy to take off. And also in the process of opening up, it is also important for developing countries to have protection of intellectual Property Rights, which will help create the sort of institutional environment conducive to innovation and technology transfer. Number two is that as the professor said, aging population is increasingly becoming a drag on the system, chinas Economic Growth. And number three is that with urbanization and the accumulation is quite important for china to catch up in the following decades. And we find that these two cannot be achieved separately, because in the process of urbanization cities will become the recipients of the technology inflow and the capital actually is important for the ability of absorbing appropriate technology. But in most developing countries, the major fraction or higher fraction of the population is in the rural area. Take china as an example. At the very beginning of chinas opening up, actually 82 of the total population was concentrated in rural area. And at that time the Human Capital of china was less than half than that of the United Stat