Author: Peter Drysdale

Just as policy makers in Washington and Beijing are settling in for a new round in the dogfight over appreciation of the Chinese currency, the renminbi, Ross Garnaut argues in the lead essay this week that there are clear signs that the way in which we view the Chinese economy needs to change fundamentally.

The Chinese economy is facing a major turning point — or a turning ‘period’ as he calls it— through which the way in which the economy operates will change dramatically, requiring a new approach to economic policy strategies in China, and leading to a very different set of interactions with the global economy from those which have characterised the period of rapid low wage-driven, export-oriented industrialisation over the last 20 or 30 years. Read more…

Author: Ross Garnaut, ANU and Melbourne University

What are the implications of the turning period for China’s continuing economic development, for China’s interaction with the global economy and for economic policy? Here I focus on four of the most important consequences, mention a consequence that is widely anticipated and feared, but which need not eventuate, and briefly discuss one way in which perceptions of China’s growth will be affected by its having entered the turning period.

As China enters deeply into the turning period (when unlimited supplies of labour become more difficult to mobilise for industrial development), there will be large and continuing increases in real wages and in the wage share of income. Read more…