Editor’s Note: This story is part of a series of articles celebrating the 70th anniversary of the founding of the People’s Republic of China. Each article shines the spotlight on one PKUer who has made remarkable contributions to China’s recent development, highlighting not only the importance of their individual accomplishments, but also the significant impact Peking University has had on China’s development over the past 70 years.

Peking University, Oct. 25, 2019: Justin Yifu Lin is a world-renowned Chinese economist, the former Chief Economist and Senior Vice President of the World Bank, the founder of New Structural Economics, the first Ph.D. in economics to return home from studying abroad after China’s Reform and Opening-up in 1978, and Honorary Dean of the PKU National School of Development. Apart from his outstanding academic success, the economist is also celebrated for his dedication to his country.

Justin Yifu Lin

Quest for knowledge

Born in Yilan County, Taiwan, in 1952, Lin developed strong attachments to the mountains and the sea of his hometown. Back then, his hometown was still largely underdeveloped. Lin made up his mind early to repay his family and to serve China. In 1971, Lin was admitted to Taiwan University’s School of Agriculture as one of the best students. However, the young man was not content with his study at school. Regarding military service as a faster way to serve his country, Lin decided to enlist instead of continuing his studies. Later, Lin found himself unaccustomed to the vibes in the army. He decided to return to university and entered the MBA program of Chengchi University in 1976. Two years later, he became one of the first MBA graduates in Taiwan. 

Interested in history, Lin was conversant with the humiliations and frustrations that China had suffered since the Opium Wars. In 1979, the young man made a rather bold decision to travel back and settle in the Chinese mainland. Years later, Lin revealed in an interview that his motive for going back to the mainland lay in the belief that, “the mainland is the optimal place for Chinese to make contributions to the rejuvenation of China”.

After receiving an MA degree from Peking University and a Ph.D. in economics from the University of Chicago, Lin worked as a post doctor at the Growth Center of Yale University. At that time, there was a huge gap in research conditions between China and the West. Scholars in China had difficulties accessing foreign journals, not to mention keeping informed of the latest progress made abroad. Nevertheless, driven by his ambition to serve China, Lin again chose to return in 1987.

President Xi Jinping meeting with Justin Yifu Lin

Demystifying the Chinese economy

Lin’s research focused on the Chinese economy. Bearing in mind China’s backwardness, Lin was dedicated to exploring the reason for and solution to China’s economic problems.

Lin proposed his theory of New Structural Economics. Guided by historical materialism, NSE applies the neoclassical approach to the study of the determinants and impacts of economic structure and their evolution. It studies forces and relations of production (the base), including technology and industry, and their impact upon hard infrastructure and institutions (the superstructure) which determine the transaction costs. According to this theory, developing countries or regions should develop industries that conform to their comparative advantages based on their factor endowments structure. It seeks synergies between an effective market and a facilitating state in an effort to achieve economic transformation and upgrading as well as economic and social development. New Structural Economics adequately explains China’s backwardness before 1979 and its miraculous performance since the Reform.

At the Inaugural Ceremony of the Institute of New Structural Economics

Finding a way for developing countries

Apart from explaining the Chinese economy, New Structural Economics also cast light on the problems of other developing countries. Using his theory, Lin found the reasons for the Great Chinese Famine in the 1960s, the success of East Asian Tigers, and failure of the “shock therapy” strategy of the former Soviet Union compared to the miraculous growth of China’s gradual transition to a market economy. 

In his book, The China Miracle: Developing Strategy and Economic Reform, Lin elaborated on his theory, and revealed why differences in social systems and governments are irrelevant when it comes to choosing development strategies. Translated into more than ten languages, his book has attracted worldwide attention, inspired many economists from developing countries, and has entered the “must-read” list for scholars who are interested in the Chinese economy.

Justin Yifu Lin lecturing to international students

Research as a lifelong career

Realizing that a strong and wealthy nation cannot be possible by individual effort, Lin decided to establish a research center on the Chinese economy to facilitate the sharing of knowledge among scholars. Hence, the PKU China Center for Economic Research was established in 1994. At present, Lin is working as a Professor and Honorary Dean of the National School of Development, Dean of the Institute of New Structural Economics, and Dean of the Institute of South-South Cooperation and Development.  For a distinguished scholar in his 60s, academic research never ends.  “Just as a soldier dreams to die on the battlefield, I wish to die on my desk,” Lin said.

Written by: Zhou Yijing
Edited by: Ciara Morris
Source: PKU News (Chinese)