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Keyu Jin

Keyu Jin (Chinese: 金刻羽; born 13 November 1982) is a Chinese economist. She is a Harvard-educated economist serving as associate professor of economics at the London School of Economics. She is one of the World Economic Forum's Young Global Leaders, specialising in international macroeconomics and the Chinese economy. Her research focuses on global trade imbalances, global asset prices and China's economic growth model. She is the author of The New China Playbook: Beyond Socialism and Capitalism (2023).

Keyu Jin 2018
World Economic Forum

Quotes

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China in the New Era (Jan 24, 2018)

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World Economic Forum channel. A Creative Commons video.
  • We are focused too much on a financial story of yesterday. Now the dollar is the reserve currency. The U.S. financial crisis is an aftermath. The financial history or... story of today and tomorrow is going to be about... China's financial integration. ...[W]hat is new, and I'm not sure the world is... prepared for it, is... a few firsts of an emerging country. 1) It is the first time a country with only 25% of GDP of the U.S. is leading in many core areas of technology. 2) It is the first time ever that the second largest economy is a middle-income superpower. That has enormous consequences for the... global financial arena. As we encourage China to open up more, are we prepared for, potentially the greater volatility, exchange rate volatility, capital controls... [W]hat... is lacking... even though we've heard so many positive aspects... and I'm completely in agreement, is that China still lacks the micro-foundations in the financial industry, with many more speculators than institutional investors, and in that kind of situation, when China opens up completely, is the world ready to absorb the kind of shocks and volatility that even a little tremor of China can send shock waves to... the global economy. So I would pose it as, China's ready for opening up, but is the rest of the world?
  • Lots of people talk about the One Road One Belt, but... we lack... communication with the world. This is the main reason behind the one road one belt initiative, for many reasons, including political pressure. Lots of countries need our support, so... from political perspectives there is a real need. ...[T]here is also economic need behind this initiative ...[T]his initiative is about a network [which] has an impact like the internet. If you have more participation in the network, you can have more effect. If you have infrastructure in Kenya but if Angola cannot be connected to Kenya you cannot do more, and often lots of projects in small countries and similar countries which have not enough capacity to [build] their infrastructure... China, with this initiative tries to create a platform with the participation of all other countries... like when the United States helped Europe, the country tried to create a platform with the participation of other countries like... China [is doing now].
    • As interpreted by the English translation from Chinese.

The Remaking of Global Finance (Jan 25, 2018)

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World Economic Forum channel. A Creative Commons video.
  • China... wants to embrace... trade integration... globalization and more trade and... the pressure is on for more reciprocal... trade protectionist pressures, but... China's also trying to shift its trade... production away from these lower end manufacturing sectors, excess capacity in solar, but that is not necessarily a good signal for the kind of trade tensions that might come about. Also because there's going to be a lot of domestic pressure coming from the Chinese businesses, and the Chinese people to pressure the government to react. So they [the Chinese government] will have to take a stance.
  • China wants to shift its production structure, but imbalances in... trade is not just a commercial policy. It's... an imbalance between savings and investment, and it's not just due to the currency or trade policies that will solve these imbalances.
  • The conversation is missing some fundamental trends, the new paradigm. Larry talked about financial inclusion... about China. The New Paradigm is that it's the first time that a middle-income country is the second largest economy. We're asking it... from IMF, from international pressures for capital account liberalization, exchange rate... flexibility. ...[W]e are not prepared for the volatility that China will bring to the world economy if it does open up. Micro-foundations of the financial infrastructure is very weak, ...dominated by speculators rather than institutional investors. So we need to think about this dilemma. We want it to open up. It has a massive amount of saving, connect with the rest of the world for investment, and yet it's going to introduce so much extra volatility typical of a developing country, and the world is not prepared for that yet... I think that is the number one challenge that we need to think about because that is the financial story written today. We also did not mention the dollar challenge, which is the confidence in the dollar. Now, we have emerging markets growing. There's a huge demand for dollars. That is rising, but on the other hand, what is backing the dollar or the liquidity is the fiscal capacity. We just talked about the fiscal stimulus. ...The share of GDP of the US is going down. We have geopolitical issues, which is a very strong determinant to how much a country wants to hold US treasuries. All this push up to a... multipolar paradigm, and we're not discussing that either. The US maintains the status of the dollar predominantly because [of] a lack of present alternatives.
    • Steven Mnuchin responded, "I disagree with that completely. There's plenty of... alternatives. Investors vote on their alternatives every day. ...I would say people have the dollar as the reserve currency because of the confidence in the U.S. financial system... the U.S. political system, the fact that we have an open society and... that's why people hold dollars."
  • Safety, liquidity, trade, denomination, financial services, I think that it's hard to match up with your words, but...
    • Jin's interrupted comment on Mnuchin's above response.
  • That requires global coordination and the role of the US.
    • In response to Christine Lagarde's statement, "I don't think anybody's asking the opening of the capital account... overnight. ...I don't think anybody's asking financial stability to be questioned by this eruption under unguarded conditions ...of China. So we all have a vested interest in keeping the system stable and solid, and that process to be gradual, as long as the rules are respected."

Understanding China (May 27, 2023)

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- Face to Face with Economist Keyu Jin. A Source.
  • Unless we're making the argument of "Let's leave three quarters of the people in the world living in abject poverty." I do not see any legitimate rationale behind trying to limit China's growth or trying to oust China from the global supply chain.
  • It's important to keep open the dialogue channels, to keep on talking. That's the first thing, and second is to see each other's perspective, and understand each other, for instance, people think about China as having a centralized state model, and that it's crowding out the private sector. That's not... the case. Thirty years ago, 70% of the wealth belonged to the state. Today, 70% of the wealth belongs to the private sector, which also provides 80% of the jobs, 70% of industrial output. ...That centralized approach is more poitical centralization and setting the strategic objective, but there's a huge amount of autonomy left at the local level... to the entrepreneurs... to the local Mayors, and they have an interactive dynamic relationship.
  • The Chinese dream for me is still about getting the 600 million people who have not reached middle income by international standards... (a monthly income of... $300)... to become middle income, and getting China's average $10,000 GDP per capita to $30,000 or $50,000... That's first and foremost a priority for everyone. We still have a huge swath of the population that can't meet the needs of... dignified life and... secure a good future for their children. ...[T]he China dream ...is that you ...can be in a country with economic opportunities. When you educate, you have better opportunities, when you invest you have a good return, and people live happy and secure lives in a relatively healthy and safe environment. ...China also evolves along with its economy.
  • China has a host of very proficient engineers and... STEM students, so the mastery of high tech is something I'm cautiously optimistic about... One of the key issues apart from China's still very centralized state innovation system, the whole-of-nation system, is the impatience of the nation. ...A country with a people that have seen really remarkable growth, that... want to do things... quickly and... see fast results. ...[T]hat kind of spirit, the short, fast, flat attitude ...originally ...a winning volleyball strategy ...then used to describe winning investment strategies. ...[C]reative breakthroughs ...basic research ...people need to be intrinsically motivated by intellectual passion. That's what is needed to have that long-term knowledge economy. ...[T]he reason that China's business models are so successful is that they're very fast and these companies become successful in a very short period of time.

The New China Playbook (2023)

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: Beyond Socialism and Capitalism
  • [T]he backward homeland of my childhood has become the world’s second-largest economy... massive new cities... astonishing technological wonders. Yet... the world is... asking the same questions... comparing China to former Communist... autocratic... repressive regimes.
  • [F]or those who think that China’s all-powerful political party and numerous state-owned enterprises (SOEs) point to a state-dominated economy, consider... [T]he private sector... accounts for... 60 percent of national output, 70 percent of the nation’s wealth, and 80 percent of urban employment. Thirty years ago, it was the other way around.
 
  Deng Xiaoping
(1979) US visit
  • Deng Xiaoping... once remarked that it does not matter whether a cat is black or white, so long as it catches mice. He... put an end to the... debate about the superiority of socialism and capitalism...
  • [T]hat a market economy could be compatible... with capitalism... [and] socialism was a breakthrough...
  • The [West's] market economy... consumers and enterprises connected through a financial system... the state plays a minor role.
  • In China, the confluence of consumers, enterprises, and... state (which exerts significant power...) ...[is] a hybrid... of... market and "mayor" economies... [T]he Chinese state... has... more tools and instruments... mandates and objectives to mobilize collective action in service of... goals. ...[I]t can ...impose mandates and ...punishment.
  • China has strong state capacity and weak institutions... advanced countries... have strong formal institutions but state capacity is... eroding.
  • Chinese households... make decisions on a collective... basis... a rich network of intergenerational relationships and duties... often... above... self-interest.
  • Chinese state... power... [and unparalleled] instruments... can... steer, manage, and push the economy... any direction. ...Policy directives, rules, and regulations can be set with little political obstruction. The state can scrap old rules and make new ones overnight... granting or denying... approvals and licenses, or leveraging the financial system to serve a... goal. ...Internal controls and competition curb corruption. ...[C]ivic society holds ...government ...accountable ...Social media ...embodies a two-way monitoring platform ...
  • 93 percent of Chinese... value security over freedom, as compared to... 28 percent of Americans.
  • In China, an interventionist state is rooted in paternalism, a hallmark... since Confucian times... intervention by a senior... is justified if it benefits a junior... This helps explain the... government... [urge] to steer the economy rather than just... markets... [a]nd... provides a rationale... to liberalize slowly... avoiding... risks, in contrast to... former Soviet bloc economies.
  • World Values Survey... indicates... 95 percent of Chinese... had... confidence in... government, compared to 33 percent in the US and 45 percent... in the rest of the world. As of 2022... 91 percent, compared to 39 percent in the US. ...[S]atisfaction levels tend to be lower for local government officials.
  • China’s economic story... serves as a cautionary tale. [I]n 1978... it began... major reforms... people were mired in poverty. In... ensuing decades, hundreds of millions... were lifted out of poverty. ...But ...[at] a high price ...below-market wages... low... return on... savings... cheaply built housing... environmental degradation and wasted resources... based on a high-cost, high-growth model.
    A poor nation with ambitions... taking shortcuts. ...Rules and regulations ...bent ...to foster GDP growth. Unfair competition... between... insiders... and the... people... countenanced so long as capital flew in, investment grew, businesses boomed, and GDP surged.
  • China’s economy faces major challenges... Catch-up growth is... different from innovation-based growth.
  • A wise state needs to know when to recede... loosen its control and let the economy ride its... ebbs and flows. It needs to guide with a lighter hand... and greater skill, especially in this... era of knowledge and information.
  • [Y]oung people are big spenders, prodigious borrowers... the potential to unleash trillions... into the global economy... [t]hey are... more open-minded and socially conscious... However, ...less suited to Western-style democracy ...[D]eeply layered in the national psyche ...steeped in their ...culture ...traditions, and rooted in their ...communities ...ushering in an era of economic... without political liberalization...
  • But... the next generation of leaders... more educated and fluent with diverse cultures, are... equipped to bridge the gap between... worldviews. ... US education has opened their eyes to... virtues of an open... if not a wholly free society. Their desire to question... challenge... pursue the truth, and to push back against injustice will have important implications...
  • Extended skirmishes, export bans of semiconductors, and tariffs are reinforcing China’s... course... to attain self-reliance.
  • [S]elf-sufficiency without... global engagement is... dangerous... in a world where prosperity and technological proficiency are... network based and interdependent. When economic interlinkages snap, everyone loses, especially the vulnerable.
  • [W]e can... do our best to rise above... sensationalism, stereotypes, and biases. Only then can we engage with China in a measured... effective way, critique... and ask good questions. Until we do... we will... get China wrong... when... common purpose has become crucial to addressing... existential threats...
  • [Some] Latin American countries... and Asian economies... experienced rapid growth, but... [never] graduated into... high-income countries. ...[I]t could have been due to corruption, political instability, poor infrastructure, or inadequate investment in research and development ...This ...is ..."the middle-income trap." Since 1960, only 13 out of 101 middle-income economies... escape[d] it. ...China ...may follow... Japan['s]... lost decade of no growth in the 1990s. If, however, China can keep growing at 5 percent on average, and... the US continues... at... 1.5 percent... the Chinese... will overtake the US... by... 2030. China would not be as rich... for several more decades, but... more than a billion Chinese would enjoy the same living standards... However, ...China will need a new model of growth. ...5 percent ...seems overly optimistic ...275 percent ...debt to GDP ...as of 2022 points to ...painful ...deleveraging ...And threats of deglobalization make an export-oriented economy ...fragile.
  • [T]here are still... 870 million people with a monthly income below RMB 2000 (...US$300) ...yet to join the four hundred million in the middle-income group ...by Chinese standards ...RMB 2000—5000—far below the advanced-economy average. ...[A]n enlarged middle-income group ...is the only way to truly bolster China’s consumption engine.
  • Reforming the hukou system... would allow the flow of talent across regions... improve... allocation of labor... [and] reduce regional disparities.
  • China has made the... quantum leap... from US$380 to US$10,000... per capita income over... four decades. The second... is to go from US$10,000 to US$30,000... [M]uch... speed of China’s achievement can be ascribed to catching up. But unqualified success... will be... when... 1.4 billion... reach... high-income status, particularly... in a political environment... antithetical to... Western conventional wisdom. ...[H]alf of the most prosperous people in the world... living under Communist rule—not... predicted... when the Berlin Wall fell.
  • [I]nnovation has... become... one of the highest forms of... glory. And it is [China's] only... hope of becoming the foremost economic power of the twenty-first century.

Recharging Growth in China (Jan 25, 2024)

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| Davos 2024 | World Economic Forum channel. A Creative Commons video.
  • [B]ooms and busts is a natural feature of market economies. In the last 40 years China has really never had a bust. ...[B]ust cycles also oust less productive firms and provides exit mechanisms, and that creative destruction... is one of the bright spots... of the situation.
  • China's suffering from a severe deficit in demand because of low wage growth, scarring effects of the pandemic and... the real estate. But... because of China's size today, growing at 3% to 4% even, is not a bad thing. If India grows 4 percentage points faster than China from now until 2030, China's still going to contribute $130 trillion dollars of additional GDP more than India... to the world.
  • I totally agree with Mr. Zhu's assessment of transitioning to a productivity, innovation driven economy. That's the only way that's going to sustain growth in the long run. So that's a good thing. But... renewables or digitization in the short term... can't possibly displace real estate as a provider for growth and employment in the way that it had in the last 10 years or so. Second, services right now... only accounts for half of GDP and only 48% of employment. That number is 80% in advanced economies, so you can imagine a whole amount of room for also absorbing the youth who are underemployed, highly educated. They account for a more educated skill force than manufacturing. And you also have almost a billion people who haven't really reached middle income by international standards, living under $300 per month. ...So I could go on and on, when even Japan and Korea leveled off their growth, their productivity as a share of... the US was already 80% and China is still very low... a lot of room for convergence. ...[W]e want to separate the cyclical problems of demand from some of the longer term challenges.
  • Confidence has to come from somewhere... There are underlying factors that alter confidence and consumption, and... we've seen the scarring effects of the pandemic. Don't forget that Chinese households did not get the support that European and American households got during the pandemic... [M]ore importantly, wage growth could be declining, and we don't really know for sure, but it's not climbing, so without that you can't possibly get consumption to be really... enthusiastic. Of course, there's real estate and the stock market. ...Retail investors account for the majority of turnover for Chinese A shares and... that has also been performing problematically. And... youth unemployment is a challenge, but is it coming from a cyclical feature which is a demand deficit, in which case policies could potentially work, but... As we'll hear from Mr. Zhu, there are also constraints... There's a debt overhang on local governments... the key implementers of economic drivers of growth, but now they are suffering from mountainous debt burdens. So these are some of the... short-term challenges.
  • Coming back to the trade challenges... We're seeing in the data that trade is simply being re-routed... from countries like Vietnam and Mexico, but... the ultimate demand and suppliers for that is... still the U.S. and China. It's... taking a longer route... that's going to increase trade cost, and... some Chinese companies... have also set up factories in Mexico and... Vietnam to... circumvent some of these... trade barriers, but it still has to come ultimately from countries like the U.S. and China.
  • In so many ways China is in transition, and... requires a bit of patience, whether it's real estate, or debt, or carbon...

Decrypting the US China Relationship (Mar 4, 2024)

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| Davos 2024 | World Economic Forum A Creative Commons video.
 
   Xi Jinping & Joe Biden
Bilateral meeting (Nov 14, 2022)
Bali, Indonesia
  • President Xi recently said, We hope that America would be prosperous, and hope that the U.S. would wish China to be more prosperous as well. I think that does send a message, but I do think that the two countries are recalibrating the relationship, learning from what has happened. I don't... think there's a set, specific idea of how it's going to look...
  • [R]ecalibration comes from two important things... First... is that internal challenges for both countries, China for sure on the economic... political... military... A lot of the focus is now inward. Chinese don't think about Americans all day long. ...Second, there's a huge unintended consequence of these technological restrictions... We've seen it in history... that whenever there are restrictions or... walls, it accelerates technological development. So what we have seen in China recently is a national mobilization. Unlikely partners from the big techs, working together. Universities, industries, governments, all trying to tackle the hard and impossible... [T]hat's... accelerated some of the endeavors to leap frog... [W]e're going to see much more of that, because of these restrictions, not despite them.
  • Before, they were comfortably importing chips. ...Of course Chinese companies would love to import Nvidia chips. Now they have to turn to domestic substitution, and that's accelerating... making domestic chip companies much more profitable... in many, many different areas.
  • [I]t's leaky. You cannot really restrict technology flows... [Y]ou're basically enriching the intermediaries. ...There are a lot of third [party] countries where we're seeing a huge surge in imports of chips. I wonder what happened there.
  • The two biggest themes this year, AI and sustainability: one represents competition between the two; the second represents collaboration. There's no way we're going to get to green transition without the collaboration... So my advice would be first... start from small victories to build trust... and recalibrate and readjust to real time circumstances.
  • [T]here's one fundamental misunderstanding about the Chinese from the American side... that China's sole goal is to try to overtake the U.S. That is not the Chinese aspiration. The Chinese people, with a billion people still trying to have a better life... It's overwhelmingly pragmatic. Chinese people... still think about getting an apartment in the cities and sending their kids to school... [T]hat is the ultimate source of legitimacy, also, for the party. When we talk about war and all that, it's about peace and stability, which is the best conditions to make that happen.
  • [C]oming back to the recalibration, look at trade. Yes, U.S. and China's structural trade is declining, but... it's just being rerouted from Vietnam and Mexico, but ultimate sources of demand and supply are still coming from the two largest economies. It's just taking a much longer route and adding to the trade costs. And it's going to add to the cost of innovation... to the cost of inflation... [C]oming back to the American voters... ultimately defining this year's election is still going to be overwhelmingly pragmatic about the everyday livelihoods of these people.

Quotes about Jin

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  • Jin avoids ideology and instead frames basic economic agents in the same manner as any other country. As a result, English-language readers will come away with a more informed and empathetic picture of this still-developing country. ...[S]he addresses the ...reality that the renminbi poses no threat to the dollar... a global currency so long as the CCP’s desire for stability demands rigid capital controls. ...Jin’s skill as a communicator pays dividends as she explains the enormous consequences of seemingly arcane regulations.
    • James Herndon, "The New China Playbook: Beyond Socialism and Capitalism" by Keyu Jin, Asian Review of Books (May 14, 2023)
  • Jin... is the Harvard-educated daughter of a former deputy minister of finance who... heads up China’s ...Asian Infrastructure Investment Bank. ...She is ...less well placed ...or eager ...to deal with politically contentious questions. ...[S]he displays a ...tendency to omit unwelcome information. Jin’s book... feels... peppered with concealed rabbit holes... Jin refers to a drop in grain production between 1959 and 1961, without mentioning... harvests collapsed because of government policy, and... 30 and 50 million citizens starved... The author... praises China’s Covid policies... [as] embraced... by the population, despite evidence of protests... and... deaths ...being scrubbed from the record. ...Jin is an optimist ...she believes Beijing has a unique ...evolving model ...to grow through ...difficulties. ...Whether she is right ...remains contested. Those who disagree point to endemic corruption... repression and stalled... productivity...
    • Isabel Hilton, "The New China Playbook by Keyu Jin review–the bright side of Beijing" The Guardian (July 31, 2023)
  • Jin... doesn't adequately address the underlying ideological and political issues that have in many cases an outsize impact on China’s economic policies, performance and behaviour. ...Jin notes that Xi Jinping has “himself taken over the job of overseeing China’s technology advancement..." ...But she doesn’t ask whether having Xi — a non-technologist — in charge is the best bet ...[T]he avoidance of politically sensitive topics and analysis compromises the value of The New China Playbook.
    • Linda Jaivin, "Slapped by reality" Inside Story (Sep 1, 2023)

See also

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