Professor Lawrence J. Lau, Vice-Chancellor of the Chinese University of Hong Kong, delivers a speech entitled on “The Impact of the Global Financial Crisis on the Economy of China and Hong Kong”

On April 18, the world-renowned economist Professor Lawrence J. Lau (vice-chancellor of the Chinese University of Hong Kong, Ralph and Claire Landau Professor of Economics, the Kwoh-Ting Li Professor in Economic Development, Emeritus, at Stanford University) delivered a one-hour seminar, entitled “The Impact of the Global Financial Crisis on the Economy of China and Hong Kong” in the President Ikeda Auditorium of the HK-SGI Cultural Centre.

Professor Lau is an expert on economic development and growth, including the economy of China and other parts of East Asia. He is the author of five books and over 160 papers in academic journals.

Since the middle of last year, the global financial tsunami has caused an inestimable damage to the world’s economy. In his talk “The Impact of the Global Financial Crisis on the Economy of China and Hong Kong”, Professor Lau used statistical figures to show how the worst depression in the US since 1929 has tightened credit and stopped importers from placing orders. However, even when the US and Western Europe is suffering from decline and regression, the economy of China is still growing as a result of domestic demand. About 10 years ago, in the abyss of the East Asia economic crisis, Professor Lau wrote a paper entitled “The Sky [of Chinese economy] is going to fall down”. It seems that this phase is still right today.

In his talk, Professor Lau pointed out the remarkable economic achievement in China since the economical reform in 1978. However, considering China’s GDP (Gross Domestic Product) per capita, China is still a developing country, despite its rapid growth. Lau summarized the three causes of the success of the economic reform in China. 1. The unlimited supply of manpower. 2. The consistently high rates of domestic savings (more than 30% on average, sometimes up to 45%). 3. A huge domestic market of over 1.3 billion customers. Lau offered his advice on how to sustain the increase of domestic demand and to maintain the steady growth of the economy and employment: this can be done through the investment in home ownership, education, science, urbanization, transport infrastructure, environmental protection and green technology. In his concluding remarks, Lau highlighted the general trend of the continuous integration of economic systems in East Asia. The trades among East Asian countries have now surpassed their trades with America and Europe. Therefore, even in the climate of stalled economic growth or even depression in America and Europe, East Asia should be able to cope.

The final part of the seminar was a question-and-answer session chaired by Professor Lau. After that, HK-SGI director Mr Lee Kong Sau presented the “HK-SGI award” to Professor Lau, in recognition of his social and academic contributions.