BOOK REPORT

BOOK REPORT

Developed or Developing Country?

Seeing the Real China in the Economic Perspective Chief Editor: Zheng Xinli Paperback, 217 pages Price: RMB 98 Published by the Foreign Languages Press

“Whether or not China remains a developing country” has been a focus of the international community in recent years. Over the past three decades, since reform and opening-up, China, with its rapid development, has become the world’s second largest country in terms of economic aggregate, as well as an essential engine for global economic growth. However, with a population of more than 1.3 billion and a territory of 9.6 million square kilometers, China’s economic development is far from balanced. To understand it comprehensively and accurately is a daunting task, especially from a non-Chinese perspective.

Also interesting is the fact that in recent years the number of Chinese outbound tourists has increased along with a surge in demand for luxury goods. Rich Chinese families are sending their children to study in developed countries and buying mansions abroad. Infuenced by these phenomena, people are likely to overestimate the average level of Chinese incomes and even classify China as no longer a “developing nation.”

To make an accurate estimate of China’s economic development, Zheng Xinli’s book Seeing the Real China in the Economic Perspective invites experts to expound from various perspectives such as economic aggregate, per capita income, economic structure, and institutions, in order to present the real developing China to the world, while at the same time answering international queries.

The book begins by clarifying several internationally practiced methods of measuring per capita income, and then compares China’s per capita income to those of other countries. The conclusion is that although China has stepped beyond the low-income stage and entered the upper-middle income range, its current per capita income is still below the world’s average. China is ranked in the middle grouping among 180-plus countries and regions, based on an analysis of relative statistics indicators. This shows that China is still a developing country and there is a long way to go before it can be deemed to be a high-income country.

The book then picks out some main topics to make further explanations, covering a wide range, including China’s economic aggregate and its level of development, a description of the huge gap between bustling cities and the underdeveloped countryside, coastal and inland areas, and industrial levels compared to those of foreign countries. There are new demographic dividends for China’s economic development from a country with a large population to a country with quality human capital, with its vast territory which contains abundant resources. Behind its economic prosperity, the Chinese people are keen to buy luxury goods and have a penchant for mass consumption. One paragraph probes into the question of whether a bubble exists in China’s real estate or whether it is just Chinese people’s purchase of comfortable housing and a way of investment. China’s social security system enables all citizens to share the fruits of development. While facing the double challenges of economic development and environmental protection, China is seeing green industries become a new economic growth point. Comparisons are also drawn between “Made in China” and “Created in China,”with further integration into economic globalization through“Welcoming in” and “Going out”, together with the RMB’s appreciation and internationalization, and global governance and China’s responsibility. All these discussions have given a fuller portrait of a large responsible country, with its historical responsibility and the problems and challenges it faces; and all the while, they help better understand the real China from an economic perspective.

There is no doubt that China still belongs to the developing country category. But we have good reason to believe that China’s economy will maintain a potential for rapid growth, and that China is expected to cross the middle-income stage and enter the ranks of high-income countries by 2020. Even then, there will be a huge gap between China’s per capita output and that of developed economies like the United States. This gap will need a longer time to reduce dramatically.

As the biggest developing country, China has become the world’s second largest economy. But its per capita GDP is a mere US $7,589, ranking it 80th in the world. To put this into context, China’s per capita GDP is 65 percent of the global average, one seventh that of the United States and one ffth that of the European Union. In addition to this, development is uneven between China’s urban and rural areas and between its various regions. There are modern metropolises like Beijing and Shanghai which can compare to prosperous New York, London, Paris and Tokyo. But if you go to the central and western parts of the country, especially far-fung villages, you are likely to see poor conditions there. Since the start of reform and opening-up, China has reduced its population living in poverty by 600 million. This is indeed an impressive feat, but China still faces a challenge in alleviating poverty. By China’s own standards, over 50 million people in rural areas are living in poverty, and by World Bank standards, China still has a poor population of nearly 200 million, which is equivalent to the population of France, Germany and the United Kingdom combined.

Chinese Premier Li Keqiang delivered a keynote speech at the OECD headquarters on July 1, 2015, entitled “Keep Development in Focus and Create Prosperity for All,” in which he pointed out, “To achieve modernization in a country with more than a billion people, there is no ready example to follow and no option other than to work long and hard. We are keenly aware of the challenges we face. But this does not make us any less determined to turn China into a medium developed country by the middle of the century.”

No country in the world would discard its dream of becoming a developed nation, and nor will China. The Chinese government has already set its sights on building a moderately prosperous society in all respects by 2020 and building China into a modern socialist country by the middle of this century. However, the biggest reality in China is that the country is still in its development stage and there is a long way to go before all 1.3 billion Chinese people can be well-off.