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As the Communist Party of China(CPC) is to convene its 18th national congress later this year, it is yet again time for the Party to reflect on China’s development thus far and find out where the country is going.
Since the 16th CPC National Congress in 2002, the CPC Central Committee has stuck to the implementation of the Scientific Outlook on Development, a socio-economic ideology initiated by President Hu Jintao, also General Secretary of the CPC Central Committee.
The ideology puts people first and calls for comprehensive, balanced and sustainable development instead of a blind pursuit of GDP growth. It attaches greater importance to raising quality and efficiency to achieve sound and rapid economic development. It emphasizes resources conservation and environmental protection and stresses that“development is for the people, by the people and with the people sharing in its fruits.”
But after more than 50 years of strenuous effort, the CPC blazed a trail of socialist development with Chinese characteristics. In 2002, China’s per-capita GDP approached$1,000, up from merely $27 in 1949, when New China was founded.
Although this benchmark brought new opportunities for the country’s economic development, Chinese scholars warn that China should be cautious to avoid falling into the“middle-income trap.”
The concept coined by the World Bank means that the strategies that allow countries to grow from low income to middle income are not enough to get them to high income. Historically, few countries have mastered the complex technical, social and political challenges that endeavor entails, according to the World Bank. During their drives to join advanced industrialized nations, countries like Brazil are said to be experiencing “growth without development.”
“In this context, the Party leadership put forward the Scientific Outlook on Development, which answers the essential question of what kind of development is needed under new circumstances,” Zhang Hefu, a senior research fellow with the CPC Central Committee Party Literature Research Office, told Oriental Outlook magazine.
“Growth, mainly referring to the increase of a country’s GDP, is the basis of development. However, the sole pursuit of a bigger economy and more wealth without upgrading the economy and properly distributing wealth means that the growth will not be sustainable,” said Li Junru, former Vice President of the Party School of the CPC Central Committee.
Hu first spoke of the Scientific Outlook on Development while visiting east China’s Jiangxi Province in late August and early September of 2003.
In October 2003, the Third Plenum of the 16th CPC Central Committee endorsed Hu’s initiatives, saying that the implementation would be of “great significance” for the country’s further development.
In October 2007, the 17th CPC National Congress comprehensively explained the Scientific Outlook on Development and wrote it into the Party Constitution.
This conception targets such problems as unilaterally going after the pace of economic growth while ignoring the conservation of resources and the protection of environment, a worsening imbalance in urban-rural socioeconomic development, growing income disparity and a rising frequency of accidents concerning occupational safety.
On November 13, 2005, workers’ negligence and disregard of safety protocols in a chemical plant’s processing tower caused explosions in northeast China’s Jilin Province, killing eight people and injuring 60.
Due to the plant’s lack of planning for an emergency situation like this, the explosions caused the spill of a large amount of toxic benzene into the Songhua River, forcing Harbin, capital of neighboring Heilongjiang Province, to cut water supplies to 3.8 million residents for four days, something never before experienced by a major city. As a result, China’s top environmental official Xie Zhenhua resigned.
In May 2007, the government of Xiamen, a port city in southeastern Fujian Province, suspended the construction of a highly polluting chemical project after it drew heavy criticism from the public.
The planned site for the plant to produce carcinogenic paraxylene, a highly polluting petrochemical, was less than 1,500 meters from residential areas. Following persistent public protests, the city government solicited residents’ suggestions from various channels through hearings and discussions participated by resident representatives. This plant was eventually relocated to a less densely populated area.
Quality growth
China’s economic vitality has attracted the world’s attention and claimed its title as a major engine for global growth.
In the last decade, China’s economy grew at an average rate of 10 percent per year, while its GDP climbed to 47 trillion yuan($7.45 trillion) in 2011 from 10 trillion yuan($1.59 trillion) in 2002.
In 2010, China overtook Japan to become the world’s second largest economy. Its share in the world economy has risen to 10 percent in 2011 from a mere 4.4 percent in 2002.
“No other country in mankind’s history has registered steady development and transformation on a scale and pace comparable to China,”said Lin Shangli, Vice President of Shanghai- based Fudan University. “The secret to China’s success lies in its leadership and the effectiveness of its strategy and policies.”
However, China’s economy has also suffered from problems and difficulties. At the beginning of 2004, it showed clear signs of a new round of overheating characterized by oversupply in the industrial sector. Sharp increases in China’s demand for natural resources and raw materials have turned China into a big importer, resulting in soaring prices in both domestic and international markets.
By adopting macroeconomic control policies that combined the adjustment of credit policies and industrial restructuring, the government put a lid on surging investment in fixed assets, overexpansion of some industries and runaway bank loans.
At the end of 2004, Hu said during a speech that macroeconomic control policies had made it clearer that China had paid enormous costs in resources exhaustion and increasing pollution for its rapid economic growth. “We must give up the old path of extensive growth, achieve breakthroughs in technological and institutional innovation and blaze a new path to industrialization,” Hu said.
Over the last five years, the Chinese Government has increased its budget for improving energy efficiency and reducing pollution. From 2007 to 2011, more than 338 billion yuan ($53.61 billion) was spent for this purpose, and 170 billion yuan ($26.96 billion) would be spent this year.
The Chinese Government also spent about 15 billion yuan ($2.38 billion) in 2011 to speed up industrial restructuring and technological upgrades. A considerable number of heavily polluting factories were shut down.
During the annual session of the National People’s Congress, China’s top legislature, in March, China lowered its GDP growth target to 7.5 percent after keeping it at around 8 percent for seven consecutive years.
By setting a slightly lower GDP growth rate, China hopes to achieve high-quality development over a longer period of time.
Quality spending
As the core of the Scientific Outlook on Development puts the people first, the Chinese Government has made multiple efforts to modify its spending to meet the requirements specified by the ideology.
Between 2009 and 2011, the Chinese Government invested 450.6 billion yuan($71.46 billion) in the country’s medical care services. By the end of 2011 more than 95 percent of China’s population had been covered by the healthcare insurance system.
The annual government subsidy for urban and rural residents’ insurance was increased from 80 yuan ($12.69) per person in 2008 to 240 yuan ($38.06) in 2012. The government also invested 63 billion yuan($9.99 billion) between 2009 and 2011 in the construction and improvement of 33,000 hospitals at local levels.
Since the fall semester of 2008, all students in China have been exempted from tuition and incidental fees for their nine-year compulsory education, while rural children have enjoyed free schooling since the spring semester of 2007.
Government invested in more programs to distribute the fruits of the country’s economic growth to economically disadvantaged groups, especially farmers.
In 2006, China rescinded the agricultural tax that had been collected from farmers in the country for more than 2,600 years. In August 2007, the Central Government published a circular requiring local governments to establish a minimum living standard system covering all rural residents.
In 2011, the per-capita net income of rural residents grew at its most rapid rate since 1985, faster than that of urbanites.
Also in that year, the Chinese Government dramatically lifted its official poverty line to an annual per-capita income of 2,300 yuan ($364.77) in rural areas, a significant increase from the 1,274 yuan($202.05) standard set in 2010. The new line boosted the population of farmers eligible for government poverty-relief subsidies to 128 million, or 13.4 percent of the rural population and nearly 10 percent of the nation’s total population.
Money has also been spent on affordable housing. In 2011, the central budget allocated 171.3 billion yuan ($27.17 billion) on government-subsidized housing projects, more than twice the amount spent in 2010. Construction on 4.32 million housing units for low-income residents has been completed, with another 10.43 million units under construction.
Since the 16th CPC National Congress in 2002, the CPC Central Committee has stuck to the implementation of the Scientific Outlook on Development, a socio-economic ideology initiated by President Hu Jintao, also General Secretary of the CPC Central Committee.
The ideology puts people first and calls for comprehensive, balanced and sustainable development instead of a blind pursuit of GDP growth. It attaches greater importance to raising quality and efficiency to achieve sound and rapid economic development. It emphasizes resources conservation and environmental protection and stresses that“development is for the people, by the people and with the people sharing in its fruits.”
But after more than 50 years of strenuous effort, the CPC blazed a trail of socialist development with Chinese characteristics. In 2002, China’s per-capita GDP approached$1,000, up from merely $27 in 1949, when New China was founded.
Although this benchmark brought new opportunities for the country’s economic development, Chinese scholars warn that China should be cautious to avoid falling into the“middle-income trap.”
The concept coined by the World Bank means that the strategies that allow countries to grow from low income to middle income are not enough to get them to high income. Historically, few countries have mastered the complex technical, social and political challenges that endeavor entails, according to the World Bank. During their drives to join advanced industrialized nations, countries like Brazil are said to be experiencing “growth without development.”
“In this context, the Party leadership put forward the Scientific Outlook on Development, which answers the essential question of what kind of development is needed under new circumstances,” Zhang Hefu, a senior research fellow with the CPC Central Committee Party Literature Research Office, told Oriental Outlook magazine.
“Growth, mainly referring to the increase of a country’s GDP, is the basis of development. However, the sole pursuit of a bigger economy and more wealth without upgrading the economy and properly distributing wealth means that the growth will not be sustainable,” said Li Junru, former Vice President of the Party School of the CPC Central Committee.
Hu first spoke of the Scientific Outlook on Development while visiting east China’s Jiangxi Province in late August and early September of 2003.
In October 2003, the Third Plenum of the 16th CPC Central Committee endorsed Hu’s initiatives, saying that the implementation would be of “great significance” for the country’s further development.
In October 2007, the 17th CPC National Congress comprehensively explained the Scientific Outlook on Development and wrote it into the Party Constitution.
This conception targets such problems as unilaterally going after the pace of economic growth while ignoring the conservation of resources and the protection of environment, a worsening imbalance in urban-rural socioeconomic development, growing income disparity and a rising frequency of accidents concerning occupational safety.
On November 13, 2005, workers’ negligence and disregard of safety protocols in a chemical plant’s processing tower caused explosions in northeast China’s Jilin Province, killing eight people and injuring 60.
Due to the plant’s lack of planning for an emergency situation like this, the explosions caused the spill of a large amount of toxic benzene into the Songhua River, forcing Harbin, capital of neighboring Heilongjiang Province, to cut water supplies to 3.8 million residents for four days, something never before experienced by a major city. As a result, China’s top environmental official Xie Zhenhua resigned.
In May 2007, the government of Xiamen, a port city in southeastern Fujian Province, suspended the construction of a highly polluting chemical project after it drew heavy criticism from the public.
The planned site for the plant to produce carcinogenic paraxylene, a highly polluting petrochemical, was less than 1,500 meters from residential areas. Following persistent public protests, the city government solicited residents’ suggestions from various channels through hearings and discussions participated by resident representatives. This plant was eventually relocated to a less densely populated area.
Quality growth
China’s economic vitality has attracted the world’s attention and claimed its title as a major engine for global growth.
In the last decade, China’s economy grew at an average rate of 10 percent per year, while its GDP climbed to 47 trillion yuan($7.45 trillion) in 2011 from 10 trillion yuan($1.59 trillion) in 2002.
In 2010, China overtook Japan to become the world’s second largest economy. Its share in the world economy has risen to 10 percent in 2011 from a mere 4.4 percent in 2002.
“No other country in mankind’s history has registered steady development and transformation on a scale and pace comparable to China,”said Lin Shangli, Vice President of Shanghai- based Fudan University. “The secret to China’s success lies in its leadership and the effectiveness of its strategy and policies.”
However, China’s economy has also suffered from problems and difficulties. At the beginning of 2004, it showed clear signs of a new round of overheating characterized by oversupply in the industrial sector. Sharp increases in China’s demand for natural resources and raw materials have turned China into a big importer, resulting in soaring prices in both domestic and international markets.
By adopting macroeconomic control policies that combined the adjustment of credit policies and industrial restructuring, the government put a lid on surging investment in fixed assets, overexpansion of some industries and runaway bank loans.
At the end of 2004, Hu said during a speech that macroeconomic control policies had made it clearer that China had paid enormous costs in resources exhaustion and increasing pollution for its rapid economic growth. “We must give up the old path of extensive growth, achieve breakthroughs in technological and institutional innovation and blaze a new path to industrialization,” Hu said.
Over the last five years, the Chinese Government has increased its budget for improving energy efficiency and reducing pollution. From 2007 to 2011, more than 338 billion yuan ($53.61 billion) was spent for this purpose, and 170 billion yuan ($26.96 billion) would be spent this year.
The Chinese Government also spent about 15 billion yuan ($2.38 billion) in 2011 to speed up industrial restructuring and technological upgrades. A considerable number of heavily polluting factories were shut down.
During the annual session of the National People’s Congress, China’s top legislature, in March, China lowered its GDP growth target to 7.5 percent after keeping it at around 8 percent for seven consecutive years.
By setting a slightly lower GDP growth rate, China hopes to achieve high-quality development over a longer period of time.
Quality spending
As the core of the Scientific Outlook on Development puts the people first, the Chinese Government has made multiple efforts to modify its spending to meet the requirements specified by the ideology.
Between 2009 and 2011, the Chinese Government invested 450.6 billion yuan($71.46 billion) in the country’s medical care services. By the end of 2011 more than 95 percent of China’s population had been covered by the healthcare insurance system.
The annual government subsidy for urban and rural residents’ insurance was increased from 80 yuan ($12.69) per person in 2008 to 240 yuan ($38.06) in 2012. The government also invested 63 billion yuan($9.99 billion) between 2009 and 2011 in the construction and improvement of 33,000 hospitals at local levels.
Since the fall semester of 2008, all students in China have been exempted from tuition and incidental fees for their nine-year compulsory education, while rural children have enjoyed free schooling since the spring semester of 2007.
Government invested in more programs to distribute the fruits of the country’s economic growth to economically disadvantaged groups, especially farmers.
In 2006, China rescinded the agricultural tax that had been collected from farmers in the country for more than 2,600 years. In August 2007, the Central Government published a circular requiring local governments to establish a minimum living standard system covering all rural residents.
In 2011, the per-capita net income of rural residents grew at its most rapid rate since 1985, faster than that of urbanites.
Also in that year, the Chinese Government dramatically lifted its official poverty line to an annual per-capita income of 2,300 yuan ($364.77) in rural areas, a significant increase from the 1,274 yuan($202.05) standard set in 2010. The new line boosted the population of farmers eligible for government poverty-relief subsidies to 128 million, or 13.4 percent of the rural population and nearly 10 percent of the nation’s total population.
Money has also been spent on affordable housing. In 2011, the central budget allocated 171.3 billion yuan ($27.17 billion) on government-subsidized housing projects, more than twice the amount spent in 2010. Construction on 4.32 million housing units for low-income residents has been completed, with another 10.43 million units under construction.