5
Transcript available at
From 1981 to 2013, per capita GDP growth in Mexico averaged
less than 1%—a shockingly low growth rate when compared to
other emerging market economies such as China and India. The
Vice Governor of the Mexican Central Bank,
Manuel Sánchez
González
, spoke at length on the modern history of the Mexican
economy, and addressed what he thought was the most crucial
issue plaguing Mexico’s anemic GDP growth, namely: stagnant
productivity growth.
During his presentation, Dr. Sánchez discussed how the Mexican
economy suffers from inefficiencies in multiple market sectors, mainly
as a result of poorly functioning institutions, deficient infrastructure,
burdensome regulations, and lack of competition. He then
illustrated the inefficiencies in certain key sectors such as energy and
telecommunications—sectors which the government had previously
monopolized—and discussed Mexico’s current structural reform
agenda aimed at reducing these inefficiencies, especially by opening
key sectors to greater competition.
Dr. Sánchez is optimistic that the overall Mexican economy will
continue to grow by 4% in 2015 and 2016, due in part to recently
implemented economic reforms, and also because of the upswing in
the American economy, Mexico’s largest trading partner.
VICE GOVERNOR OF BANK OF MEXICO
DISCUSSES STRUCTURAL CHALLENGES
FOR THE MEXICAN ECONOMY
(2014.11.14)
Learn more about the event at
HKUST IEMS co-organized a conference with the Development Policy
Research Unit (DPRU) of the University of Cape Town to discuss how
China’s economic engagement in Africa is affecting African workers.
The event, supported by a network-building grant from the World
Bank’s Jobs and Development Group, brought together leading
researchers from China, Africa, and internationally.
The keynote speaker was
Francisco Ferreira
, World Bank Chief
Economist for Africa. He pointed out that although Africa is home
to 6 of the 10 fastest-growing economies in the world in the last
decade, most Africans remain poor and African economies remain
reliant on agriculture and mining (still more than 50% of GDP),
with urbanization often occurring without industrialization, rather
relying on construction and services. With China gradually losing its
comparative advantage in low-wage manufacturing, there may be
new opportunities for Africa to benefit from Chinese trade and FDI.
However, despite recent growth in manufacturing in Nigeria and in
Ethiopia (with Chinese FDI), most African countries have difficulty
meeting the other key requirements for manufacturing such as skilled
labour, a reliable power supply, and good transport and logistics.
Several presentations dispelled myths about China’s engagement
with Africa.
Xiaofang Shen
, who conducted a survey of private
Chinese firms in Africa as a World Bank economist, pointed out
that although oil and and extractive industries still make up 30%
of Chinese investment projects in Africa, there has recently been a
marked diversification into financial services (19.%), construction
(16.4%), and manufacturing (15.3%). Also, private FDI is increasing
fast, often in manufacturing and services at small scales, and is now
almost as large as state-owned FDI even though it is not reflected
in China’s official data.
Deborah Brautigam
, Professor at Johns
Hopkins SAIS, found that reports of massive land grabs by Chinese
investors were wildly overstated. Actually, China is not even among
the top 50 countries investing in African agriculture.
Barry Sautman
, Professor in the HKUST Division of Social Science
and IEMS Faculty Associate, debunked the myth that Chinese
employers hire only Chinese workers and not locals. Based on 400
interviews with Chinese investors in 11 countries, he found that the
average workforce of Chinese employers was 80% African, and that
the logic and pace of localization was similar for Chinese firms as for
other foreign-invested firms.
Discussing the research agenda going forward, HKUST IEMS Director
Albert Park
observed that due to the poor quality of official data
much work needs to be done to document the size, nature and
direction of foreign direct investment flows from China to Africa
based on both African and Chinese sources. There also is great need
for firm and industry studies in different sectors (manufacturing,
construction, services, and agriculture) that analyse how Chinese
investment and trade influence technology transfer, productivity
growth, and employment in both Chinese and domestic firms.
CHINA’S IMPACT ON AFRICAN EMPLOYMENT: WHAT DOWE KNOW AND
WHERE ARE THE GAPS?
(2014.11.21-22)
Dr. Sánchez also described the Mexican Central Bank’s position on
fiscal and monetary policy for the coming few years, and reaffirmed
that, while the current inflation rate in Mexico is now over 4%, the
Mexican Central Bank has adopted a long-term target rate of 3%, a
target which the Bank is expected to aggressively pursue in 2015 to
better shield the economy from financial volatility.
Thomas Wong (InvestHK), Héctor Martínez Elizondo (ProMexico Hong Kong), Albert Park,
Manuel Sánchez González, Alicia Buenrostro Massieu (Consul General of Mexico in Hong
Kong and Macau), Germán Muñoz (Mexican Chamber of Commerce in Hong Kong)
