In the last two decades, China has witnessed steadily increasing rates of annual growth and a corresponding decline in poverty levels - facts that underline the success of socialism with Chinese characteristics. An assessment.
JOHN CHERIAN in Beijing, Shanghai and Shenzhen
IT does not take much time for a traveller to gauge the tremendous progress China has made in the last two decades after it opened up its economy. The gross domestic product (GDP) of China in 1952 was a mere 67.9 billion yuan. In 2000, the country's GDP topped 8.9 trillion yuan (over one trillion dollars), making it the seventh country in the world in terms of GDP. According to official statistics, China's economy has seen an annual growth rate of 7.7 per cent since 1949. Since it was opened up, the economy has been growing at an annual rate of 9.3 per cent.
Recently, the Director-General of China's National Bureau of Statistics said that China's growth rate was three times the average growth rate of developing countries and four times that of developed countries. According to Chinese officials, this was the reason why China was able to keep its population, which constitutes around one-fifth of humanity, reasonably well fed. According to government statistics, the number of people below the poverty line has been reduced to 30 million.
Nicholas Stern, the Chief Economist of the World Bank, recently said that the task of world-wide poverty eradication would be an impossible one if China and some other developing countries failed to retain their pace of growth. Meanwhile, China is all set to join the World Trade Organisation (WTO) later this year. The Chinese consider this a milestone. WTO Director-General Mike Moore has said that without China the WTO would be incomplete.
The Chinese economic miracle is all the more laudable as the transformation process started around the time the Socialist bloc was collapsing, both economically and politically. The Chinese currency, backed by a reserve of $165.6 billion, remained stable during the East Asian economic crisis. Chinese officials attribute this to the successful adaptation of a market economy under the socialist system. Today China is the world's top producer of steel, coal, cement, cereals, meat and cotton. It ranks among the top 10 trading nations, and its foreign direct investment (FDI) is among the highest in the world. The first six months of 2001 saw a considerable increase in foreign investments as compared to the corresponding period last year. According to official statistics the committed and paid-up overseas investments totalled $33.41 billion and $20.69 billion respectively. China's exports to the United States reached close to $100 billion dollars in 2000. China hopes to become "a moderately developed country" with the completion of the Three Gorges Dam and the Qianghai-Tibet Railway in the near future.
The ultra-modern airports in all major cities are complemented by networks of expressways and other systems of mass transit. For instance, the Beijing International Airport handles 35 million passengers every year. The handling capacity of the airport is expected to rise to 48 million by the time the city hosts the Olympic Games in 2008. One of the reasons why Beijing could bid successfully for the holding of the 2008 Olympics was the city's modern infrastructure. A virtual telecommunications revolution has swept the country. Almost every household today has a television set. Mobile phones are available at cheap rates and most Chinese in urban areas carry one.
According to the spokesperson for the city's Municipal Corporation, Beijing has drafted a new development strategy for the early period of the century. According to the official, Beijing would be one of the world's first-class metropolises in another seven years. Beijing, like most of the other big cities of China, faces common urban problems such as air pollution and water shortages. However, Beijing's authorities plan to invest 180 billion yuan (around $18 billion) in improvements to the urban infrastructure, including more subways, expressways and airports. The authorities say that the standard of living of Beijing will dramatically improve by the time the Olympics is held.
Chinese officials emphasise that the hosting of the Games will act as a catalyst for the sustainable development of not only Beijing but the rest of China. The Beijing authorities have earmarked $12.2 billion to protect the environment. "The Olympic bid has undoubtedly accelerated the implementation of the environmental protection plan," said Mayor Liu Qi. Heavily polluting industries have either been shifted out of the city already or are in the process of being relocated. In the next five years, the green cover of the city will exceed 75 per cent in the mountainous area and 25 per cent in the flat terrain.
Beijing already has the look of a garden city. Some Western critics who are unhappy with Beijing's successful bid for the Olympics made the preposterous statement that the authorities had sprayed the grass green in many parts of the city. However, it is true that the authorities have imposed strict rules for the residents of Beijing - trampling or loitering on the grass is strictly forbidden.
SHANGHAI, which is hosting the Asia Pacific Economic Cooperation (APEC) summit in October, is also another city that has transformed itself in the last two decades. Today its skyline rivals that of Hong Kong or any Western metropolis. Built from scratch in the last four years is the Pudong New Area, across the Huangpu river. It boasts of its own airport, convention centres, hotels and parks. Yet the city planners were careful to keep its historical heritage intact. The colonial buildings, left behind by the British, the French and the Germans, occupy pride of place along the "bundh" (the river bank).
The Jin Mao Tower, the second tallest building in the world, is located in Pudong. The Pudong area also boasts of the Oriental Pearl television tower, the tallest broadcasting tower in Asia. Today Shanghai is one of the busiest ports in the Asia Pacific Rim. It is the headquarters of many of the giant multinational companies doing flourishing business in China. Giant billboards extolling MNC products dot the broad avenues of the bustling city, considered to be the most cosmopolitan in China.
The city of Shenzhen is yet another illustration of the phenomenal strides China has made. Situated next to Hong Kong, it was a fishing village until the late 1970s. Today it is among the most prosperous cities in China and enjoys one of the highest standards of living. A large portrait of Deng Xiaoping, who initiated China's economic reform measures, adorns the main avenue of the city. The residents of Shenzhen give all credit for the creation of their city to the late leader. "Deng was in his mid-seventies when he came up with the idea of developing Shenzhen into a city. Unlike Chairman Mao, he studied in France and therefore was open to new ideas," said a Shenzhen resident.
In the next five years the Chinese government hopes to develop Shenzhen to the level of Hong Kong. Shenzhen is one of the five successful special economic zones (SEZs) that came up after the economic reforms of the 1970s. "The development of SEZs is an important part of building of socialism with Chinese characteristics," said President Jiang Zemin on the occasion of the city's 20th anniversary, celebrated in November 2000. The SEZs are registering a remarkable 30 per cent average annual growth.
Many high-tech companies are located in Shenzhen, providing employment - and good salaries - to Chinese professionals. Light industrial units in Hong Kong were the first to relocate to Shenzhen, followed by Taiwanese and Japanese businesses. The city also has a colourful night life, with casinos and massage parlours. It is one city that takes Deng's dictum "dare to be rich" seriously.
However, amid the affluence there are pockets of poverty. This writer visited the houses of two Shenzhen residents living in the same locality. One, a barber, is still steeped in poverty and lives in a ramshackle tenement which does not even have running water. His wife was busy washing clothes by the side of a well. On the other hand, his neighbour was the proud owner of a three-storied building. He had rented out the top two floors and had settled into a life of relative luxury. He too started poor but in his youth he managed to cross over to Hong Kong from his native Shenzhen. When the Chinese economy opened up and as the local economy started to grow, he returned to Shenzhen to invest his savings in real estate.
There are still areas of comparative backwardness. Although the peasants benefited from the lifting of state-controlled prices for basic products when the reform process began, the standard of living in rural areas was not as high as that in the urban areas. A construction boom had started in the rural areas too as farmers started building brick-and-tile houses for themselves. Yet the rural areas are not doing as well as cities such as Shanghai and Beijing, where the government is investing in considerable amounts of money.
In a speech to the Ninth National People's Congress early this year, Prime Minister Zhu Rongji said that strengthening the agricultural sector and increasing the farmer's income had to be put on top of the country's agenda for the next five years. He said that although the seven-year national programme (1994-2000) to help 80 million poor people in the rural areas had been basically fulfilled, "it will be an arduous task for a long time to bring about a fundamental change for the better in poverty-stricken areas".