SUN WUKONG Guangdong's Wang checks growth sums
By Wu Zhong, China editor
HONG KONG - The pick-up in China's economic growth to 7.9% in the second
quarter is encouraging optimism that the country can attain the government-set
goal of 8% gross domestic product (GDP) growth for the whole year, in spite of
some suspicion about possible data fabrication.
A more serious concern, however, is that quality of economic growth may once
again be overlooked in the nationwide enthusiastic pursuit of growth, as
Beijing has set baoba (ensuring 8% GDP growth) as a political task. In
other words, encouragement by Beijing of "GDP worship" may be jeopardizing the
"scientific development" advocated by President Hu Jintao.
Unveiling the road map for China's modernization in early 1980s, late paramount
leader Deng Xiaoping set the goal of doubling the
country's GDP in every decade. Since then, GDP growth has been adopted as
virtually the sole yardstick to measure development, and in relation to this,
the performance and capability of officials.
Officials have therefore been zealous to chase after GDP growth, ignoring other
aspects of development and environment protection. Under "GDP worship", funds
and efforts have been mainly devoted to sectors that could have an immediate
impact in boosting GDP growth.
As a result, problems such as pollution, waste of energy and resources, and
imbalanced development (such as between rural and urban areas, between regions
and even between various industries) became increasingly acute at the turn of
the century. So much so that, shortly after he took the reins in 2002, Hu
called for an end to "GDP worship" and urged "scientific development", or
environment-friendly, energy- and resources-efficient, balanced development.
In relation to this, the State Council, or cabinet, headed by Premier Wen
Jiabao, introduced macro-economic adjustment and control measures in 2004 in an
effort to correct some of the problems. Beijing also announced it would cease
to use GDP growth as the yardstick to measure an official's performance and
would replace it with a comprehensive set of standards.
Some think tanks said they would work out some comprehensive measurement of
(balanced) economic growth to replace the GDP yardstick. But so far, no
progress, if any, has been made public in regard to these moves.
China then began to suffer a serious economic slowdown last year, with GDP
growth slowing to 6.8% year on year in the fourth quarter from 9% three months
earlier, 10.1% in the second quarter and 10.6% in the first), as the global
financial crisis made its impact. In fear that massive unemployment as a result
of dramatic economic downturn could cause social unrest, Beijing set ensuring
8% GDP growth for this year as a political task to ensure, giving up its
five-year-old macro-economic control policy.
Beijing's deep concern with worsening unemployment is well justified. Just take
one example here. This year, China has more than six million university
graduates. Wen personally promised to help them find jobs. In addition to
asking state enterprises to create more vacancies and to offer incentives for
graduates to work in rural areas, it is estimated that more 1 million graduates
still cannot find employment.
The government has taken an unprecedented move in asking the People's
Liberation Army (PLA) to recruit 120,000 graduates this summer, according to
Chinese media reports. Normally, the PLA recruits its men and women at the end
of each year, and constitutionally, university graduates are exempt from
compulsory military service.
Setting baoba as a political task naturally revives the enthusiasm of
officials to blindly chase after GDP growth, putting aside what may be required
for "scientific development". It was thus no surprise to hear the National
Bureau of Statistics (NBS) announce last week that the country's GDP growth was
7.1% in the first half of this year. Broken down, growth was 6.1% in the first
quarter and 7.9% in the second. Given the momentum, baoba for the whole
of this year should not be a problem.
The quick recovery of GDP growth has aroused concern among some Chinese
officials and economists that "GDP worship" is making a comeback, and outspoken
Guangdong provincial party chief Wang Yang explicitly expressed such a concern.
"Frankly, I am really worried. We have just made some preliminary progress in
implementing 'scientific development'. But amid the economic downturn, when
everyone is eager to show 'good-looking' figures, all backward productive
forces are revived. This goes against the laws of a market economy," Wang told
a panel discussion of the Guangdong provincial party committee last Friday. By
"backward productive forces" he means low-tech, labor-intensive,
energy-inefficient and heavy pollution productions.
"Some of our GDP figures are very 'good looking'. But they do not mean the
growth of social wealth, but are instead achieved with a waste of social
wealth. For example, we build a big bridge and we get some GDP. Then we let the
bridge collapse or dismantle it, and we get some GDP again. We rebuild the
bridge and get still some GDP. In this way, we may have boosted our GDP three
times in huge waste of social wealth. But social wealth is increased only once.
"Chasing after growth without considering its quality results in air pollution,
pollution in water resources. We create GDP while polluting the environment.
Then we create GDP again by dealing with the pollution. As regional leaders, we
are certainly concerned whether our economic growth figures will look good. But
we should rather devote our energy to economic restructuring and upgrading,"
Wang said. Guangdong set this year's GDP growth target at 8.5 - 9% and achieved
7.1% in the first half.
Wang is one of the 25 members of the Politburo, and his words certainly carry
their weight. Because of this, some China watchers in Hong Kong read his
remarks as an implicit criticism of Wen for setting baoba as a political
task. In any case, by pledging to uphold Hu's view of "scientific development",
Wang clearly wants to establish himself in the run-up to the party's 18th
National Congress in 2012 when a major leadership reshuffle is expected. Give
his age of 54, there is a chance for him to move up a rung on the power ladder.
Wang stopped short of giving examples how baoba is jeopardizing
"scientific development". But another piece of news last week seems to lend
support to his charges.
Fu Chuanjun, vice director of the municipal Bureau of Water Resources in
Haikou, in the north of Hainan island, was asked in an interview with a local
television channel: "Why can the longtime problem of water pollution in Haikou
never be solved?" His said that in a place where "the economy is more
developed, the water is darker". His argument was that more pollutants are
emitted into water when the economy becomes more advanced. Haikou is the
provincial capital of Hainan. He even added, "Is water not polluted in Beijing,
in Shanghai or other cities?"
Naturally Fu was immediately criticized by media commentators. But so far no
one has been able to give a solid example of a city in China where the economy
has advanced without polluting water resources, to refute Fu's argument. Many
Chinese bloggers now cite Fu as an official who dared to speak the truth.
In Beijing, residents now complain that the "blue sky" that was seen during the
2008 summer Olympics last summer is gone again. Heavy air pollution has
returned even after such drastic measures as the removal of Shougang (Capital
Iron and Steel Group), a major source of air pollution, to Tangshan, in Hebei
province, before the Olympics. The city government also continues to impose
restrictions on cars driving in the city - a measure taken during the Olympics.
That suggests new sources of air pollution have appeared in the capital in the
past year or so.
As it looks likely that the goal of baoba will be met, the debate over
the GDP yardstick is likely to be renewed, as heralded by Wang Yang's
high-pitched criticism and critical reports about worsening pollution. It can
be expected that, once China successfully rides out the current crisis and
resumes high-speed growth, the government may again have to impose
macro-economic controls to correct the problems of imbalanced development and
pollution. It seems that, unless China can discover a better mode of
development, it will be find it difficult to break out of this vicious circle.
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