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Will China Fall into a Middle Income Trap? Growth, Inequality and Future Instability

The Center for East Asian Studies at Stanford University presents a conference on the Chinese middle class.

December 6, 2011 8:30am to 5:30pm

** Please note the event is only open to Stanford affiliates. RSVPs are necessary to attend. RSVP required by 5PM December 2 **

Jean C. Oi
(moderator) - Stanford University
Nicholas Hope - Stanford University
Scott Rozelle - Stanford University
T. Sicular - Professor, University of Western Ohio
Li Hongbin - Professor, Tsinghua University
Liu Shouying - Development Research Center, State Council
Xueguang Zhou - Professor, Stanford University
Thilo Hanemann - Peterson Institute for International Economics
Cai Fang - Development Research Center, State Council
Beatriz Magaloni - Associate Professor, Stanford University
J. Edward Taylor - Professor, UC Davis
Martin Carnoy - Stanford University
Francisco Ferriera - World Bank
Gi-Wook Shin - Stanford University
Kwon Daebong
- Professor, Korea University
Andrew G. Walder - Stanford University

The problem: Despite the recent robust growth, there is concern that as China moves up the income ladder that its high level of inequality may be a breeding ground for future instability. We are not merely talking about the current (today’s) inequality: the 3:1 one urban to rural inequality in per capita income. More importantly, we are concerned about the implications of today’s human capital inequality between China’s cities and its poor rural areas. There are inequality gaps of 30:1 (matriculation into college); and 8:1 (early childhood education gap; and 4:1 (matriculation into fast-tracked academic high schools).

Is this a concern of development economists from the West? Or, is this something in which China’s policy making, academic and business communities are interested. In fact, China’s leaders—including those at the very top—have recently become extremely interested in understanding if anything in the nature of its economy is setting up the country to be headed on a road that could end up in a middle income growth trap.

China knows a lot about its own economy today. There are two questions that are outstanding and which this conference hopes to answer:

ONE: We are interested in what if, anything the implications of the human capital gaps on the economy and political stability (wending) of one to two decades from now.

TWO: Are there lessons from the rest of the world—yesterday, today and tomorrow—that can help formulate policy solutions to potential barriers to rapid and sustained growth?

Approach: In a one day conference at Stanford, sponsored by FSI and SCID, experts from growth, inequality, development and political economy, academics and policy people from inside and outside of China (and from inside and outside of Stanford) will contribute their knowledge.

Output: A monograph that distills the lessons from the conference, the target audience being China’s top leadership and its academic elite (who act as advisors to China’s top leadership).

This document will seek to put the current economic development process through which China is moving into international perspective. The monograph will be coauthored by Scott Rozelle, Nick Hope, Hongbin Li, Liu Shouying, Cai Fang and others.

7:45 – 8:30 Breakfast
8:30 – 8:45 Welcome: Nicholas Hope, Director, SCID, and Scott  Rozelle, Senior Fellow, APARC, Stanford University
8:45 – 10:15 Panel One

Chinese Growth and Inequality: Past and Present
Moderator: Jean Oi (Stanford)
Presenters:  Growth and Income Inequality: T. sicular, Professor, U. Western Ontario

Human Capital Inequality: Li Hongbin, Professor, Tsinghua University
Plenary Discussant:   Liu Shouying, Development Research Center, State Council

10:15 – 10:30 Coffee Break
10:30 – 12:30 Panel Two 

Chinese Growth and Inequality: Future
Moderator: Xueguang Zhou, Professor, Stanford
Presenters: Emerging Growth Patterns: TBD

Status and Outlook for FDI
Thilo Hanemann, Peterson Institute for International Economics
The Collapse of Rural Education: Scott Rozelle, Stanford
Plenary Discussant: Cai Fang, Development Research Center, State Council

12:30 – 2:00 Lunch Break
2:00 – 3:00 Panel Three, Session I

Lessons from Outside of China for China
Inequality and Stagnation: Mexico
Moderator/Discussant: Beatriz Magaloni, Stanford

Human Capital and Mexico’s Labor Markets:
J. Edward Taylor, Professor, UC Davis

Avoiding Collapse: Brazil
Moderator/Discussant:  Martin Carnoy, Stanford

Growth, Equity and Stability: Francisco Ferriera, World Bank

3:00 – 3:15 Coffee Break
3:15 – 5:15 Panel Three, Session II

Growth through Restructuring: South Korea:
Moderator/Discussant: Gi-wook Shin, Professor, Stanford University
Presenter: The Education Hedge and Recovery from Crisis:  Kwon Daebong, Professor, Korea University

What lessons should be learned? What policies adopted?
Moderator: Nicholas Hope, Stanford
Discussants: Andrew Walder, Stanford, Paul Cavey, MacQuarrie Securities     

5:30 – 6:00 Reception
6:00 – 7:30 Dinner, Vidilakas Room, Schwab Center, 680 Serra Street, Stanford