Too Much Growth, Too Little Development: The reality behind China's economic miracle
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Too Much Growth, Too Little Development: The reality behind China’s economic miracle
DALE JIAJUN WEN
ABSTRACT Dale Jiajun Wen examines the social and environmental changes in China during the reform era. By chronicling issues including inequality and poverty, health and education, employment and jobs, and environmental degradation, she argues that China’s economic miracle is largely built on liquidation of social and natural capital. The country can no longer ignore the problems created by export-oriented growth, and needs to explore alternatives urgently. KEYWORDS health care; education; employment; environment; livelihood; economic globalization
Introduction China enteredWTO in December 2001, after more than two decades of reforms aimed at shifting the country towards a free-market economy that is more open to foreign investment and trade. These reforms have earned the praise of the World Bank and other economists who herald China as a great success story of economic globalization. China has indeed become a magnet for foreign investment and an export powerhouse. Its strong economic growth over the past 25 years (averaging more than 9 percent annually) is unparalleled in modern history. However, what grows even faster than GDP is the number of mass incidents, including protests, demonstrations or even direct clashes with police. According to official numbers, there were 74,000 mass incidents in 2004 and 87,000 in 2005, up from 10,000 in 1993.Why are the social tensions growing exponentially amid the obvious prosperity? In order to understand this apparent paradox, quality of life indicators, such as inequality and poverty, health and education, employment and jobs, need to be examined. The environmental cost and its impact on well-being should be investigated as well. By focusing on livelihood indicators, this paper will show that GDP or FDI numbers do not give a complete picture of the experience of Chinese people during this period of rapid social and economic change.
Poverty and inequality In monetary terms, China’s progress in reducing extreme poverty has indeed been remarkable. It is one of the few countries that is well ahead of the UN Millennium Development (2007) 50(3), 30–35. doi:10.1057/palgrave.development.1100401
Wen: China and the Economic Miracle Development Goals of cutting poverty in half by 2015. In1999, the World Bank raised China’s classification from a ‘low-income’ to a ‘lower middle income’ country. Many Chinese citizens have increased access to consumer goods. The extensive rationing system that covered basic items such as grain, cooking oil, sugar, eggs, meat, and clothes in the late 1970s has disappeared and modern luxuries such as TVs, washing machines and refrigerators have entered millions of homes, particularly in urban areas. However, as will be shown later in ‘Health’ and ‘Education’ section, a significant part of the income increase is only a manifestation of growing monetization of previous commons, instead of increasing disposable income. Also, there are growi
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