Op-Ed Contributors

China still needs time to develop

By Michele Geraci (China Daily)
Updated: 2010-05-25 07:55

As one of the largest economies in the world, China is being asked by the international community to take a more and more active role in world affairs, ranging from contributing to stabilizing the post-financial crisis global economy to cutting greenhouse gas emission.

Sometimes, Western approach toward China is contradictory or driven by political agenda. For example, in 2005 Chinese oil company CNOOC was prevented by the US government from acquiring Unocal, on grounds of national security. But, during the peak of the global financial crisis, when money was needed urgently, China was allowed - even invited - to acquire a significant stake in Morgan Stanley. Simply put, the Western world now demands that China's entry into the small circle of powerful economies be accompanied by an increased responsibility in world matters.

The question that follows naturally is: "Is China really a global economic power or still a developing nation?" As it is often the case when dealing with China, the answer is: 'it depends'. Luckily, statistics speak for themselves and below I give some basic figures that show the dual characteristics of the Chinese economy.

Simply using the size of the overall economy ($4.9 trillion), we may conclude that China is amongst the top three economies in the world. But when we look at per capita GDP ($3,900), China is amongst the poorest nations in the world. On per capita income basis, Chinese people are even poorer, given that, over the last several years, GDP growth has been faster than wages.

On the issue of carbon dioxide emission, China as a whole may be the largest emitter in the world, but each American citizen pollutes the atmosphere 5 times more than his Chinese counterpart. European, including Russia's, per capita emission is also much higher than in China.

China's oil consumption is higher than Japan, but less than half that of the US. Again, on a per capita basis, the picture changes dramatically, with a Chinese citizen consuming only 10 percent of its US counterpart.

Finally, income disparity has increased dramatically in China, with the Gini coefficient - a measure of how wealth is concentrated in the hands of few people - increasing from 0.16 before the reform and opening up to 0.47 today, suggesting that income gap between the rich and the poor has increased dramatically.

In addition, foreigners' view of China tends to be distorted because of a number of reasons, including different values and cultural backgrounds, the tendency of Western media to promptly highlight negative events over achievements and, ultimately, the fact that most of the influential foreigners residing in China tend to live within the comforts of the expatriate communities in Beijing or Shanghai. Over time, many of them fall into the trap of believing that the glamour they witness in Chaoyang district of Beijing is representative of the whole of China.

I have had the opportunity, during the last year and half, to travel extensively across the country, clocking more than 100,000 km by train, buses and cars. I have visited several tier 2 and 3 cities and have spent considerable time in remote villages. I have seen and talked with people belonging to various strata, from business travelers to migrant workers, families, young people driving expensive cars and more conservative representatives of the older, more traditional, generation.

Far from being a scientific or comprehensive analysis, my feeling is that most of the Chinese people still live under tough economic conditions and have to endure daily hardship. Farmers still toil in the fields performing manual work or using old machinery; the profits from one mu (1/15th of a hectare) of land is about 1,500 yuan a year - not surprisingly many wish to migrate to cities.