The per capita gross national income exceeds 10000 US dollars: how to break the middle income trap?

category:Finance
 The per capita gross national income exceeds 10000 US dollars: how to break the middle income trap?


When it comes to the economic structure of catch-up countries, the difference between GNI and GDP is worth analyzing. Gross national income (GNI) is equal to gross domestic product (GDP) plus net income from foreign factors. From historical data, Chinas GDP and GNI have little difference. It is worth observing this gap under the background of internal circulation and external circulation.

The GNI per capita is given by the National Bureau of statistics. There is no precise figure of dollar pricing. We only know that the per capita GDP has broken the $10000 barrier. According to the report of the International Monetary Fund (IMF), it is US $10098. As soon as we calculate, our per capita overseas income is 312 US dollars, which means that 3% of our income comes from overseas, which is almost our foreign trade surplus.

In recent years, the proportion of import and export in GDP has decreased year by year, from more than half of 10 years ago to 31.8% in 2019. The economys immunity to overseas risks is improving, but it is impossible to get rid of the external market in an all-round way. We should know that even if one third of the national economy is related to overseas markets, it also means that a large number of people are engaged in work related to overseas markets. Although the trade surplus accounts for only 3% of GDP, it is a solid backing for the stability of the RMB. According to statistics, there are about 330000 enterprises with import and export performance in China, and foreign trade directly and indirectly promotes employment of over 200 million, accounting for about 1 / 4 of the total employment population. In particular, the overseas market is more related to the survival of the industry. For example, the national output of mobile phones will reach 1.7 billion units in 2019, while the domestic market will only absorb nearly 400 million units.

The total trade volume of China and India in 2019 is 639.5 billion yuan, including 515.6 billion yuan of exports to India and 123.9 billion yuan of imports from India, with a trade surplus of 391.7 billion yuan; with the United States, the trade surplus in 2019 is 295.8 billion US dollars, about 2 trillion yuan. The total trade surplus is close to 2.9 trillion yuan. Of course, even in the context of the increasingly fierce trade war, Sino US trade has not been completely frozen. The annual export decline was 12.5%, and the United States is still Chinas third largest trading partner. If we have to recycle the economy, it means that the per capita GNI will be reduced by 312 US dollars.

The problem is not just the $312. We know that the reason why South Korea has effectively overcome the middle-income trap without the support of natural resources and suffering from the Asian financial crisis is the breakthrough of semiconductor technology represented by Samsung. One Samsung contributes one fifth of the countrys GDP. The same is true of Japan, where automobiles, household appliances and electronic products were all top-notch products in the world at that time. In Taiwan, a TSMC contributes 5% of Taiwans GDP. In the process of leading economic breakthrough, high technology is not only indispensable, but also indispensable. Without the high profit and added value of high technology, how can we talk about the high income of the people.

Compared with tiktok, there are not so many overseas users of wechat, and it seems that the prospect is not so dim. However, I have seen reports that some Indians, living in a difficult situation in the epidemic, borrowed money from their friends in China, but now they are lost because of the suspension of wechat. On the day when the U.S. government decided to prohibit Americans from transacting on wechat, the market value of wechat plummeted by up to 10%, and its market value of HK $5 trillion was suddenly reduced by 500 billion yuan. There are not many American users in wechat. Why is the market reaction so fierce? Because the capital market has valued wechat based on its future business, it is supposed to be able to sow and harvest among the worlds 7 billion people, but now its business boundary has shrunk. Its rival, Facebook, has one less powerful rival.

Chinas app is banned. For India and even the United States, although it is criticized as a open fire robbery, but from the perspective of interests, it is a business with no loss. The core asset of the software industry is creativity and opportunity, and the cost of followers is small. When tiktok was banned in India, hundreds of fake products appeared all of a sudden, some of which were plagiarized to pixel level, and some were just stealing source code bought from hackers for tens of dollars. Of course, any application without continuous upgrading and improvement will be eliminated sooner or later, but if the market opportunity is seized by local enterprises with certain strength, it is another matter.

Science and technology are the primary productive forces. It is not too much to emphasize the role of science and technology in promoting economic development. The continuous driving force for the progress of science and technology comes from the huge investment. Tencent employees earn 700000 or 80000 a month, and Huawei gives the newly recruited gifted youngsters more than 2 million in annual income, which is supported by their huge profits. With the first-class profits, we can only provide the first-class salary, and then we can produce competitive products. This is a positive feedback mechanism. On the contrary, it may be wrong step by step, and the enterprise is declining.

What the United States and India are doing now is to draw a circle in the global market, just like the circle that monkey king drew for Tang monk with a golden cudgel, forcing us to stay in our own comfort circle. However, Chinas GDP accounts for only 16% of the worlds, two-thirds of that of the United States. We are still only a middle-income country, and the income that the people can freely control is relatively small. At this time, Chinas high-tech enterprises have been drawn a red line and have a ceiling. Then, how will they create technologies equivalent to those overseas?

If the United States and India succeed, their enterprises will compete and reap in a market accounting for 80% of the world, but we can only swim in a market of less than 20%. Dont think that the market of 1.4 billion people is big enough and broad enough for enterprises to gallop. It should be noted that both advanced and backward technologies are obtained by comparison, and a small gap may form a huge gap after accumulation. Once the market is opened, the backward will collapse like a mountain.

In this sense, when our per capita GNI has reached the threshold of US $10000, we should be particularly vigilant.

However, although China and the United States are decoupling and India is crowding out Chinese enterprises, under the general trend, the process is complicated, giving Chinese enterprises time to respond. Indias imports of Chinas goods are concentrated in mechanical and electrical, textile, plastic, ceramics and other industrial manufactured products, generally speaking, they are daily household goods. However, Chinas manufacturing advantages are obvious, high-quality and low-cost, which is irreplaceable for low-income consumer groups like India. Because of this, it is difficult for the Indian government to ban it. It can only choose the software that has the least impact on peoples lives. After the ban on apps, India demanded that the import of power equipment and components from China should be approved by the government on the ground that Chinese power products could remotely paralyze their power grid. In fact, they have closed their doors from government procurement channels. But the Indian government has no choice, at least for the small commodities that concern peoples lives. Being banned by India and the United States, for Internet companies, means losing the richest and most potential markets. I believe that Chinas Internet companies, as well as foreign trade enterprises, will not be willing to submit to this point, and they must be as indomitable as Huawei, and try to find a way out of the sea. Recently, the news that tiktok is going to sue the U.S. government is exciting. If any country or individual wants to step into a new realm, how can practice succeed in the comfort circle? I hope all Chinese people understand this truth. Source: Chen Hequn, editor in charge of Sanlian Life Weekly_ NB12679

However, although China and the United States are decoupling and India is crowding out Chinese enterprises, under the general trend, the process is complicated, giving Chinese enterprises time to respond. Indias imports of Chinas goods are concentrated in mechanical and electrical, textile, plastic, ceramics and other industrial manufactured products, generally speaking, they are daily household goods. However, Chinas manufacturing advantages are obvious, high-quality and low-cost, which is irreplaceable for low-income consumer groups like India. Because of this, it is difficult for the Indian government to ban it. It can only choose the software that has the least impact on peoples lives. After the ban on apps, India demanded that the import of power equipment and components from China should be approved by the government on the ground that Chinese power products could remotely paralyze their power grid. In fact, they have closed their doors from government procurement channels. But the Indian government has no choice, at least for the small commodities that concern peoples lives.

Being banned by India and the United States, for Internet companies, means losing the richest and most potential markets. I believe that Chinas Internet companies, as well as foreign trade enterprises, will not be willing to submit to this point, and they must be as indomitable as Huawei, and try to find a way out of the sea. Recently, the news that tiktok is going to sue the U.S. government is exciting.

If any country or individual wants to step into a new realm, how can practice succeed in the comfort circle? I hope all Chinese people understand this truth.