Global Policy Forum

By Zheng Bijian

Getting The Facts Right

China's rapid development has attracted worldwide attention in recent years. The implications of various aspects of China's rise, from its expanding influence and military muscle to its growing demand for energy supplies, are being heatedly debated in the international community as well as within China. Correctly understanding China's achievements and its path toward greater development is thus crucial.

Since starting to open up and reform its economy in 1978, China has averaged 9.4 percent annual GDP growth, one of the highest growth rates in the world. In 1978, it accounted for less than one percent of the world economy, and its total foreign trade was worth $20.6 billion. Today, it accounts for four percent of the world economy and has foreign trade worth $851 billion--the third-largest national total in the world. China has also attracted hundreds of billions of dollars of foreign investment and more than a trillion dollars of domestic nonpublic investment. A dozen years ago, China barely had mobile telecommunications services. Now it claims more than 300 million mobile-phone subscribers, more than any other nation. As of June 2004, nearly 100 million people there had access to the Internet.

Indeed, China has achieved the goal it set for itself in 1978: it has significantly improved the well-being of its people, although its development has often been narrow and uneven. The last 27 years of reform and growth have also shown the world the magnitude of China's labor force, creativity, and purchasing power; its commitment to development; and its degree of national cohesion. Once all of its potential is mobilized, its contribution to the world as an engine of growth will be unprecedented.

One should not, however, lose sight of the other side of the coin. Economic growth alone does not provide a full picture of a country's development. China has a population of 1.3 billion. Any small difficulty in its economic or social development, spread over this vast group, could become a huge problem. And China's population has not yet peaked; it is not projected to decline until it reaches 1.5 billion in 2030. Moreover, China's economy is still just one-seventh the size of the United States' and one-third the size of Japan's. In per capita terms, China remains a low-income developing country, ranked roughly 100th in the world. Its impact on the world economy is still limited.

The formidable development challenges still facing China stem from the constraints it faces in pulling its population out of poverty. The scarcity of natural resources available to support such a huge population--especially energy, raw materials, and water---is increasingly an obstacle, especially when the efficiency of use and the rate of recycling of those materials are low. China's per capita water resources are one-fourth of the amount of the world average, and its per capita area of cultivatable farmland is 40 percent of the world average. China's oil, natural gas, copper, and aluminum resources in per capita terms amount to 8.3 percent, 4.1 percent, 25.5 percent, and 9.7 percent of the respective world averages.

Setting The Priorities

For the next few decades, the Chinese nation will be preoccupied with securing a more comfortable and decent life for its people. Since the Third Plenary Session of the Eleventh Central Committee of the Chinese Communist Party, held in 1978, the Chinese leadership has concentrated on economic development. Through its achievements so far, China has blazed a new strategic path that suits its national conditions while conforming to the tides of history. This path toward modernization can be called "the development path to a peaceful rise." Some emerging powers in modern history have plundered other countries' resources through invasion, colonization, expansion, or even large-scale wars of aggression. China's emergence thus far has been driven by capital, technology, and resources acquired through peaceful means.

The most significant strategic choice the Chinese have made was to embrace economic globalization rather than detach themselves from it. In the late 1970s, when the new technological revolution and a new wave of economic globalization were unfolding with great momentum, Beijing grasped the trend and reversed the erroneous practices of the Cultural Revolution. On the basis of the judgment that China's development would depend on its place in an open world, Deng Xiaoping and other Chinese leaders decided to seize the historic opportunity and shift the focus of their work to economic development. They carried out reforms meant to open up and foster domestic markets and tap into international ones. They implemented the household contracting system in rural areas and opened up 14 coastal cities, thus ushering in a period of economic takeoff.

In the 1990s, China once again confronted a strategic choice, due to the Asian financial crisis and the subsequent struggle between the forces for and against globalization. China's decision to participate in economic globalization was facing a serious challenge. But by carefully weighing the advantages and disadvantages of economic openness and drawing lessons from recent history, Beijing decided to open up China even more, by joining the World Trade Organization and deepening economic reform at home.

China has based its modernization process mainly on its domestic resources. It has relied on ideological and institutional innovations and on industrial restructuring. By exploring the growing domestic market and transferring the huge personal savings of its citizens into investment, China has infused its economy with new momentum. Its citizens' capacities are being upgraded and its technological progress expedited. Even while attempting to learn from and absorb useful products from other societies, including those of the advanced capitalist countries, China has maintained its independence and self-reliance.

In pursuing the goal of rising in peace, the Chinese leadership has strived for improving China's relations with all the nations of the world. Despite the ups and downs in U.S.-Chinese relations over the years, as well as other dramatic changes in international politics, such as the collapse of the Soviet Union, Beijing has stuck to the belief that there are more opportunities than challenges for China in today's international environment.

The Road Ahead

According to China's strategic plans, it will take another 45 years--until 2050--before it can be called a modernized, medium-level developed country. China will face three big challenges before it gets there. As described above, China's shortage of resources poses the first problem. The second is environmental: pollution, waste, and a low rate of recycling together present a major obstacle to sustainable development. The third is a lack of coordination between economic and social development.

This last challenge is reflected in a series of tensions Beijing must confront: between high GDP growth and social progress, between upgrading technology and increasing job opportunities, between keeping development momentum in the coastal areas and speeding up development in the interior, between fostering urbanization and nurturing agricultural areas, between narrowing the gap between the rich and the poor and maintaining economic vitality and efficiency, between attracting more foreign investment and enhancing the competitiveness of indigenous enterprises, between deepening reform and preserving social stability, between opening domestic markets and solidifying independence, between promoting market-oriented competition and taking care of disadvantaged people. To cope with these dilemmas successfully, a number of well-coordinated policies are needed to foster development that is both faster and more balanced.

The policies the Chinese government has been carrying out, and will continue to carry out, in the face of these three great challenges can be summarized as three grand strategies--or "three transcendences."

The first strategy is to transcend the old model of industrialization and to advance a new one. The old industrialization was characterized by rivalry for resources in bloody wars and by high investment, high consumption of energy, and high pollution. Were China to follow this path, it would harm both others and itself. China is instead determined to forge a new path of industrialization based on technology, economic efficiency, low consumption of natural resources relative to the size of its population, low environmental pollution, and the optimal allocation of human resources. The Chinese government is trying to find new ways to reduce the percentage of the country's imported energy sources and to rely more on China's own. The objective is to build a "society of thrift."

The second strategy is to transcend the traditional ways for great powers to emerge, as well as the Cold War mentality that defined international relations along ideological lines. China will not follow the path of Germany leading up to World War I or those of Germany and Japan leading up to World War II, when these countries violently plundered resources and pursued hegemony. Neither will China follow the path of the great powers vying for global domination during the Cold War. Instead, China will transcend ideological differences to strive for peace, development, and cooperation with all countries of the world.

The third strategy is to transcend outdated modes of social control and to construct a harmonious socialist society. The functions transformed, with self-governance supplementing state administration. China is strengthening its democratic institutions and the rule of law and trying to build a stable society based on a spiritual civilization. A great number of ideological and moral-education programs have been launched.

Several dynamic forces are noticeable in the carrying out of the three strategies. For example, there are numerous clusters of vigorously developing cities in the coastal areas of eastern and southern China, and similar clusters are emerging in the central and western regions. They constitute the main engines of growth, are the major manufacturing and trading centers, and absorb surplus rural labor. They also have high productivity, advanced culture, and accumulated international experience that the rest of China can emulate and learn from. The expansion of China's middle-income strata and the growing need for international markets come mainly from these regions.

China's surplus of rural workers, who have strong aspirations to escape poverty, is another force that is pushing Chinese society into industrial civilization. About ten million rural Chinese migrate to urban areas each year in an orderly and protected way. They both provide Chinese cities with new productivity and new markets and help end the backwardness of rural areas. Innovations in science and technology and culture are also driving China toward modernization and prosperity in the twenty-first century.

The Chinese government has set up targets for development for the next 50 years. This period is divided into three stages. In the first stage--2000 to 2010--total GDP is to be doubled. In the second stage, ending in 2020, total GDP is to be doubled again, at which point China's per capita GDP is expected to reach $3,000. In the third, from 2020 to 2050, China will continue to advance until it becomes a prosperous, democratic, and civilized socialist country. By that time, China will have shaken off underdevelopment and will be on a par with the middle rung of advanced nations. It can then claim to have succeeded in achieving a "peaceful rise."

Impact On The World

China's Peaceful Rise will further open its economy so that its population can serve as a growing market for the rest of the world, thus providing increased opportunities for--rather than posing a threat to--the international community. A few figures illustrate China's current contribution to global trade: in 2004, China's imports from members of the Association of Southeast Asian Nations increased by 33.1 percent, from Japan by 27.3 percent, from India by 80 percent, from the European Union by 28 percent, and from the United States by 31.9 percent.

China is not the only power that seeks a peaceful rise. China's economic integration into East Asia has contributed to the shaping of an East Asian community that may rise in peace as a whole. And it would not be in China's interest to exclude the United States from the process. In fact, Beijing wants Washington to play a positive role in the region's security as well as economic affairs. The beginning of the twenty-first century is seeing a number of countries rising through different means, while following different models, and at different paces. At the same time, the developed countries are further developing themselves. This is a trend to be welcomed.

China does not seek hegemony or predominance in world affairs. It advocates a new international political and economic order, one that can be achieved through incremental reforms and the democratization of international relations. China's development depends on world peace--a peace that its development will in turn reinforce.