Wednesday, 21 November 2007


Over the past thirty years, the pace of China’s growth and development has been unrelenting. While figures of the country’s rate of GDP growth over the period vary, evidence points to a statistic between 9.3% and 9.4% annually (Holz 2005, Fisher 2005, Malik 2005). Per capita GDP growth has reached over 8.1% annually and HDI measures of life expectancy and literacy have also improved dramatically during this period. Life expectancy now stands at 70 years of age, while primary education enrollment statistics are comparable to those of developed countries. Poverty incidence was as high as 31% in 1978; that number now stands at 2.8% as 250 million people have been lifted out of poverty (Malik 2005). Industrial productivity has experienced tremendous growth as well. In 2004, China’s manufacturing sector output reached $3.4 trillion, adjusted for purchasing power parity, compared to just $1.5 trillion in the U.S. “China’s factories produced just 200 room air conditioners in 1978; today, they produce 48 million. Back then, they turned out just 11 billion meters of cloth; last year, 35.4 billion meters (over 3 times as much)… There are 28 billion square feet of floor space under construction in China, compared with just 5 billion in the U.S. Five of the world’s largest shopping centers are now located in China,” (Fisher 2005).

These figures support, what Fisher (2005) presents as the “Big China view”. However, China’s economy today is not without its drawbacks and in many areas continues to fall short of developed countries. Fisher (2005) sheds light on how “little” China is in comparison to the U.S.:
• “U.S. productivity in agriculture is 33 times that of China; productivity in U.S. industry is five times that of China.
• The U.S. has 19,497 airports; China, just 126.
• We have 150,000 miles of petroleum pipelines; they have less than 10,000.
• We have 481 cars per 1,000 people; they have seven.
• We have much, much higher levels of [higher] education, technology …”

From a development perspective, the last thirty years have also resulted in increasing domestic inequality in various spheres. China’s Gini coefficient is now as high as 0.45, the threshold considered indicative of potential social unrest. Geographical inequality is also high – the urban HDI stands at 0.81, while the rural figure is only 0.67. Most striking is the fact that public health coverage in rural areas has dropped from 90% to 10% between 1979 and 2002. Unsurprisingly, Shanghai’s HDI is now equal to that of Portugal, while Tibet’s is lower than that of Gabon (Malik 2005).

There are those that tout China’s strength and laud its progress over the last thirty years. Yet, there are others that hold more sobering views, highlighting China’s increasing inequities. China has been described, at opposite extremes, as both “the next superpower” (Murray 1998) and being “on the brink” (Henderson 1999). But, it remains undeniable that, on an aggregate level, Chinese economic circumstances are dramatically better now than they were thirty years ago. Further, I make the unsupported, but not ludicrous statement, that one would find it a virtually impossible task to locate a government in a poor country that finds the last thirty years of Chinese growth and development undesirous. Thus, the question begs itself, how did they achieve it?

Two words: Deng Xiaoping.