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Chinese experience benefits global economy

Author  :  CAI FANG     Source  :    Chinese Social Sciences Today     2019-10-28

To review and understand the glorious history, great achievements and valuable experience of the People’s Republic of China (PRC), we should highlight the three important historical periods of the 70 years since its founding, the 40 years of reform and opening up, and the period since the 18th CPC National Congress in 2012, and we should figure out the organic links and development logic of the inheritance and innovation among them. From the socialist modernization proposed by Chairman Mao Zedong to the three-step development strategy proposed by Comrade Deng Xiaoping, and then to the Chinese dream proposed by General Secretary Xi Jinping for the great rejuvenation of the Chinese nation, they not only have come down in one continuous line, but also represent ambitious goals which have been set out based on deepened understanding gained from practice and which are closely related to stages of economic and social development. 

In the process of realizing these ambitious goals, by understanding the trends of historical development, constantly learning lessons and making corrections, and grasping the opportunity of historical change, the Party led the people to work hard in solidarity. After this 70-year glorious journey, it has created a rare development miracle in human history, accumulated useful experience that has been elevated to Chinese wisdom, and produced a global significance that matches China’s growing international status. Chinese wisdom and Chinese solutions are not only valuable for us to move forward, but also for China’s contribution to the development of human society.

Major achievements

The founding of the PRC in 1949 ended China’s history as a semi-colonial and semi-feudal society. The Chinese people have stood up since then and have continued to make great achievements. The achievements made during the first 30 years laid a material foundation that should not be underestimated in its contribution to the development of the reform and opening up period.

From 1952 to 1978, China’s GDP grew at an average annual rate of 4.4%, slightly faster than the growth rate of high-income countries on average (4.3%), which changed its previous long-term stagnation. During this period, the Chinese economy and people’s living standards underwent tremendous changes; however, they still lagged behind the development of the world. The implementation of a highly centrally planned economic system caused many shortcomings, including insufficient enthusiasm for work and production, inefficient allocation of resources, and an imbalanced economic structure. 

From reform and opening up in 1978, China’s GDP grew at an average annual real growth rate of 9.4% until 2018, the fastest growth rate in the world during the same period. In other historical periods of world economic development, there have been no precedents of such rapid growth for such a long time. For example, the fastest growing and longest-lasting cases were in South Korea and Singapore, which had average annual growth rates of 8.6% and 8.1% in their fastest growing 40-year period from 1965 to 2005.

Its unprecedented rapid growth has enabled China’s economy to have miraculously caught up within 40 years. According to data from the World Bank, in terms of per capita GDP, China was a typical low-income economy in 1978. With the continued rapid growth of the reform period, China entered the ranks of lower-middle-income economies in 1993 and upper-middle-income economies in 2009. It then surpassed Japan to become the world’s second largest economy in terms of economic aggregate. In 2018, China’s per capita GDP at current prices reached nearly $10,000, almost approaching the rank of high-income economies. 

What is more remarkable is China’s achievements in poverty alleviation. In 1981, the global population living below the World Bank’s absolute poverty line (set at $1.90 per person per day, in 2011 PPP dollars) totaled 1.89 billion, of which 880 million were in China, accounting for about 46.6% of the world’s total. In 2015, 750 million people lived in absolute poverty in the world, with 9.6 million in China, accounting for only 1.3% of the world’s total. During this period, China’s direct contribution to world poverty alleviation was as high as 76.2%. In fact, after 2015, China continued to implement the strategy of rural poverty alleviation in accordance with higher standards than those of the World Bank. At the end of 2018, only 16.6 million of the country’s rural people lived in poverty, and the poverty headcount ratio was 1.7%.

In the 70 years since the founding of the PRC, China’s social productivity, comprehensive national power and its people’s living standards have all developed by leaps and bounds, creating a rare miracle in the history of human development. From the perspective of social productivity and comprehensive national power, since the founding of the PRC, it has leaped to the world’s technological frontier, starting with a series of independent original projects. For example, the Tiananmen Square complex, the Beijing National Stadium (or the Bird’s Nest), Beijing Daxing International Airport, the Nanjing Yangtze River Bridge, Line 1 of the Beijing Subway, the Qinghai–Tibet railway, the Hong Kong–Zhuhai–Macau Bridge, the Xiaolangdi Multipurpose Project that introduces flood control in the lower reaches of the Yellow River Basin, the Three Gorges Dam on the Yangtze River, the West–East Gas Pipeline, the South-to-North Water Diversion Project, synthetic crystalline bovine insulin, hybrid rice, new antimalaria medicines—artemisinin and dihydroartemisinin, “Two Bombs, One Satellite,” Tiangong-2, Quantum Experiments at Space Scale, Chang’e 4 that achieved the first soft landing on the far side of the Moon, the BeiDou Navigation Satellite System, the 5th generation mobile networks, the high-speed railway network and the highway system, the COMAC C919…the country has seen numerous scientific and technological innovations. 

Global significance

Since the 18th CPC National Congress, China has increasingly approached the center of the world stage. A community of shared future for mankind advocated by General Secretary Xi Jinping has been written into several UN documents. We implemented the Belt and Road initiative, proposed the establishment of the Asian Infrastructure Investment Bank, launched the Silk Road Fund, and hosted a series of major diplomatic activities, including two sessions of the Belt and Road Forum for International Cooperation, the APEC Informal Leaders’ Meeting, the G20 Hangzhou summit, and the FOCAC Beijing Summit. China has made new and greater contributions to the progress of human society and world peace and development while enhancing its international influence, appeal and leverage.

Since reform and opening up, China has steadily become a unique country in the world with a massive economic scale and a high growth rate, which has not only changed its own appearance but also the global economic pattern. It can be said that China, as the engine and stabilizer of the world economy, has contributed to major changes unseen for a century in the world. The economic catch-up of emerging economies and even more developing countries with China as the mainstay has made global economic convergence a reality rather than merely something in theory, shaping a multi-polarization pattern in the world economy. From 1978 to 2018, the share of low- and middle-income countries in global GDP increased from 22.2% to 36.3%, and the proportion of China’s GDP in the economic aggregate of low- and middle-income countries increased from 5.0% to 36.0%. During this period, the total GDP of all low- and middle-income countries has quadrupled at constant prices, with China contributing 43.4%. 

In addition to contributing to the world economy in the form of material output, China has also provided public goods for the world economy, including its experience with reform and opening up and its development concepts responsible for the Chinese miracle; the accompanying power of rule-making discourse; and its useful insight into concepts of development and its constructive suggestions for international conventions. China does not seek the hegemony of the world economy, nor does it export its own development model. However, as the world’s second largest economy, largest industrial country, largest exporter of goods and services, second largest importer of goods and services, as well as largest current foreign exchange reserve holder, China is duty-bound to contribute to the stability and growth of the world economy and to voice its own and other developing countries’, especially emerging economies’, demands regarding international economic and trade rules, and lead the transformation of global governance. Due to the following salient features, China’s development and its experience, wisdom and solutions are especially important to the world.

First, China has the largest population in the world. In 2018, it had about 18.3% of the world’s total population. The achievements of the Chinese people, accounting for nearly one-fifth of the world’s population, have unparalleled significance to the world. Chinese wisdom and solutions have expanded the way for developing countries to move toward modernization, offering new options to countries and nations around the world that want to accelerate development while maintaining independence. 

Second, researchers in various disciplines at home and abroad have academic responsibilities and curiosity to explore the mystery of a country’s rise and fall. The Chinese miracle has been created in a very short time, compared with the historical process of many developed countries. The Needham Question, which attracted many scholars to try to answer why China’s science and technology (development) declined in history, is also well-known in economic history, and it can be said a Chinese version aimed at exploring why the world economy has experienced a big diversion since the 16th century. This shows that China’s development experience also has the universal significance of the laws of human development.

Third, China is the only major country that has experienced economic prosperity, decline and then prosperity again, having almost experienced every stage of economic development, from a low-, to lower-middle- and then to upper-middle-income economy, now approaching the rank of high-income economies. 

Over more than two thousand years, the world status of the Chinese economy, represented by its share of global GDP and its percentage of per capita GDP relative to the world average, has experienced an obvious V-shaped trajectory. In particular, the second half of its rising trajectory, which is indicated by China’s economic aggregate and per capita income, is a miracle in the history of human development, both in terms of its speed and large scale.

David Hume, a pioneer of British classical economics, claimed in an article in 1742 that “when the arts and sciences come to perfection in any state, from that moment they naturally, or rather necessarily decline, and seldom or never revive in that nation, where they formerly flourished.” Historically, Chinese civilization once reached a glorious peak, and its science and technology were long in the leading position in the world. However, while Western countries experienced the industrial revolutions and their technological and economic development accelerated, China’s development in modern times lagged far behind. It has not been until the founding of the PRC, especially since reform and opening up, that China’s economic, social and technological developments have regained glory. The miracle created by China’s catching up and developing in various fields so far has broken and will continue to break Hume’s prediction. 

 

The article was edited and translated from Beijing Daily. Cai Fang is vice president of the Chinese Academy of Social Sciences.

 

(Edited by JIANG HONG)

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