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Home Around The World

China White Paper lists economic achievements and challenges

Editor by Editor
September 28, 2019
in Around The World, China, Economy, Top Story
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By P.K.Balachandran

Colombo, September 28 (newsin.asia):  A White Paper brought out by China’s State Council Information Office on September 27  titled: “China and the World in the New Era” says that in just seven decades, China has completed a course of development that took developed countries several hundred years to complete. But the document also admits that China has miles to go before it catches up with a truly developed country like the United States.

The bright part is that since it’s founding in 1949, the Peoples’ Republic of China (PRC) led by the Communist Party of China (CPC) has become the world’s second-largest economy, taken care of the material needs of its nearly 1.4 billion people, and achieved moderate all-round prosperity.

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But the downside is that “China remains a developing country, with foundations that need to be further strengthened.”

“Some of the fundamentals in China remain unchanged, and therefore China is still facing a raft of severe challenges. The Chinese people still have work to do,” the White paper asserts.

Unprecedented Economic Growth

Between 1952 and 2018, China’s industrial added value increased from RMB 12 billion to RMB 30.5 trillion, up 970 times at constant prices, with an average annual growth rate of 11%. The GDP increased from RMB 67.9 billion to RMB 90 trillion, up 174 times at constant prices, with an average annual growth rate of 8.1%.

The per capita GDP increased from RMB 119 to RMB 64,644, up 70 times at constant prices.

According to the World Bank,  at market exchange rates, China’s economy in 2018 was worth US$ 13.6 trillion, second only to the US economy which was worth US$ 20.5 trillion.

Foreign trade has been increasing constantly. In 2009, China became the world’s largest exporter of goods and second largest importer of goods; in 2013, China became the world’s largest trader in goods.

China attracted a total of more than US$ 2 trillion in non-financial FDI, and nearly 1 million foreign-invested enterprises were set up in the country. In 2018, almost half a million foreign students came to study in China.

From 2001 to 2018, China’s imports of goods increased from US$ 244 billion to US$ 2.1 trillion. The rise was 13.6% per annum on average, 6.8% higher than the global average. China’s imports of services was US$ 525 billion, up by a yearly average of 16.5% and accounting for 9.4 % of the global total.

In 2018, China’s R&D spending accounted for 2.19% of GDP. In 2018, the added value of high-tech manufacturing increased by 11.7% over the previous year. Corresponding figures for strategic emerging industries and equipment manufacturing were 8.9% and 8.1%.

In 2018, China’s overseas investment reached US$ 143 billion, up by a factor of 53 since 2002, a yearly average growth of 28.2%. China’s foreign trade has been growing year by year. From 1978 to 2018, China’s foreign trade amounted to US$ 52.2 trillion. In 2018, China’s exports of goods were US$ 2.5 trillion and its exports of services US$ 267 billion.

Foreign Assistance

Over the six decades since China began to provide foreign assistance in the early 1950s, it has provided 166 countries and international organizations with nearly RMB 400 billion in aid, and dispatched over 600,000 aid workers, of whom more than 700 sacrificed their lives for the development of other countries.

On seven occasions, China has canceled debt from interest-free government loans to heavily indebted poor countries and the LDCs.

According to an MGI report, by 2040, the integration between China and the rest of the world is expected to drive economic value of US$ 22 trillion to US$ 37 trillion, equivalent to 15 to 26% of global GDP.

Good Social Indices

China has established a preliminary social security system covering elderly care, medical care, minimum subsistence, housing, and education. By the end of 2018: participants in urban workers’ basic elderly care insurance numbered 419 million; participants in unemployment insurance numbered 196 million; and participants in work injury compensation insurance numbered 239 million.

Basic elderly care insurance covered more than 900 million people; and basic medical insurance covered more than 1.3 billion people, almost everyone in the country.

Over the past 70 years, China’s life expectancy has increased from 35 in 1949 to 77 in 2018, higher than the world’s average of 72. According to a global wellbeing report released by the Boston Consulting Group (BCG) in 2018, in the past decade, China’s ranking rose by 25 places, the fastest rate among the 152 countries covered.

Independent Path

China’s economic development path is based on China’s actual conditions, the White Paper says.

“Reflecting on its reality and history, and through experimentation, China has drawn wisdom from its own culture and learned from the strengths of other cultures, both Eastern and Western. China sticks to its choice of path, but is never rigidly opposed to change; China borrows experience, but never copies unthinkingly, the White Paper says.”

“It is a path of reform and innovation. There is no ready-made solution to the development issues facing China. Working diligently and exploring boldly, the Chinese people have resolved difficulties and challenges through reform and innovation, and removing institutional obstacles hindering development.”

“The purpose is to unleash and develop productivity and social vitality, to improve and develop Chinese socialism, and to modernize China’s system and capacity for governance,” the document says.

Law-Based Governance  

China’s path is law-based governance. “Rule of law is a fundamental, overall and long-lasting institutional guarantee for China’s development. Rule of law ensures a vigorous and orderly society in times of profound change, and ensures lasting peace and stability,” the White Paper says.

Centralized Leadership

Over the past 70 years, China’s success boils down to the  centralized leadership of the Chinese Communist Party (CPC).

“Due to China’s vast territory and complicated national conditions, the governance of China is uniquely difficult. Without centralized, unified and firm leadership, China would have tended towards division and disintegration and caused widespread chaos beyond its own borders,” the document says.

On the CPC, the White Paper says that its success lies in its “capacity for self-improvement, and in its firm leadership core, effective theories, strict discipline and improved mechanisms for selecting upright and competent officials, which have ensured that the Party remains stable, progressive and clean.”

China Not A Threat

About the common notion that the rise of China is a threat to the rest of the world and the established order, the White Paper says: “This is both unrealistic and harmful to regard China’s economic development as a threat or challenge and try to squeeze China out of the global industrial chain, supply chain and value chain so as to detach China from the world economy.”

Those who accuse China of being a threat should look at the market it offers to outsiders, the White Paper says.

“In the coming 15 years, China’s imports of goods and services are expected to exceed US$ 30 trillion and US$ 10 trillion respectively. China is the most attractive investment destination. It has a workforce of almost 900 million, and more than 700 million are employed. It has a talent bank of 170 million people who have received higher education or vocational education, and generates more than 8 million college graduates each year.”

Facilities for FDI

To facilitate FDI, China has implemented a wide range of trade and investment liberalization and facilitation policies, formulated the Foreign Investment Law, and implemented the system of pre-establishment national treatment plus a negative list across the board. It continues to relax market access. China has stepped up the protection of intellectual property rights, the White Paper assures.

 

 

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