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An Interview with Nancy Qian

Summary:
This week in Say More, PS talks with Nancy Qian, a professor at Northwestern University's Kellogg School of Management and Founding Director of China Econ Lab and Northwestern’s China Lab. Project Syndicate: You recently pointed out that economic reporting about China focuses far too much on total GDP and not enough on per capita GDP. In fact, “China remains a poor country, despite its phenomenal headline GDP growth over the past four decades.” For that to change, you say, it must “significantly boost the incomes of a population about the size of that of Sub-Saharan Africa.” Are the government’s plans for the next five years likely to increase per capita GDP? What else should China be doing to tackle domestic

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This week in Say More, PS talks with Nancy Qian, a professor at Northwestern University's Kellogg School of Management and Founding Director of China Econ Lab and Northwestern’s China Lab.

Project Syndicate: You recently pointed out that economic reporting about China focuses far too much on total GDP and not enough on per capita GDP. In fact, “China remains a poor country, despite its phenomenal headline GDP growth over the past four decades.” For that to change, you say, it must “significantly boost the incomes of a population about the size of that of Sub-Saharan Africa.” Are the government’s plans for the next five years likely to increase per capita GDP? What else should China be doing to tackle domestic poverty?

Nancy Qian: The timeline for lifting half the Chinese population out of extreme poverty needs to be longer – ten or more years. Poor rural populations need the tools and resources to become integrated into the modern economy, including better schools, better health care, a meaningful pension system, and savings instruments besides banks (which pay negligible interest rates to depositors).

The question is how to fund all this. As it stands, schools, health care, and pensions are insufficient in all but the wealthiest areas, and state banks maintain low interest rates as essentially a tax on depositors. Revenues from poor areas cannot be expected to fund the services and resources they need locally, not least because, as the China 2030 report showed, average GDP growth will decline steadily over time. This means that domestic poverty alleviation will require significant redistribution.

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Qian recommends

We ask all our Say More contributors to tell our readers about a few books that have impressed them recently. Here are Qian's picks: