From speed to quality, manufacturing to innovation, growth to sustainability, energy intensity to saving, wealth to distribution, economy to people focussed, lopsided to balanced development, and urbanisation to 'creating a Socialist New Countryside'. These are the buzzwords and thrusts of the latest Chinese National People's Congress (NPC) and the concurrent Chinese People's Political Consultative Conference (CPPCC).
So marked are these policy shifts and so heated have been their internal debate that they have prompted questions and commentaries whether there is a revival of the old Marxist ideological rivalry between Capitalism and Socialism. Is this an about-turn at a crossroads (Check my back number China at a Crossraods under Recent Posts in this column) or is it a march to the future?
Decades of breakneck growth have seen the countryside, the birthplace of Chinese communism, being exploited 'to feed the cities' through the supply of cheap food, land, raw materials and labour. The lack of economy of scale in China's poorly-endowed and increasingly environmentally-challenged countryside has ushered in a prolonged winter of discontent. Unimaginable income inequalities, rampant corruption, and depravations in basic healthcare, education and welfare have taken their toll. Albeit localised, a surge last year to 87,000 rural unrests ('mass incidents') and a series of grave industrial and environmental disasters are powerful writings on the wall for President Hu and Premier Wen, both with political upbringing in the countryside.
Although a recent Pew Global Attitude Project survey polling 16 countries suggests that Chinese are the happiest and the most optimistic about their future, it acknowledges a disproportionate urban bias unrepresentative of the whole country.
Likewise, sustainability is no mere fashionable word. With energy consumption per unit production seven times that of Japan, six times that of the US and three times that of India, rising protectionism and tightly squeezed profit margins, the energy-intensive model of mass production for export is evidently unsustainable to underwrite the well-being of a population a fifth of mankind. Hence the clarion call to build 'A nation of Innovation'. The rationale is encapsulated in my back number The Long March for Brands.
Similarly, China increasingly realises her vulnerability to over-reliance on exports due to under-sized internal consumption demand. While investment has risen from 36% to 44.8% of GDP in 5 years, consumption fell from 62% to 50.7% of GDP. This reflects an increasing propensity to save as 57% of the population remains impoverished farmers having to cope with rainy days of medical expenses, children's education and old age.
So it is now high time to reverse the trend, to shift the emphasis, 'to let the cities feed the villages'.
The State Council's press conference on the NPC summarised the concept of 'Socialist New Countryside' in a 20-character slogan: Productivity Development; Better Livelihood; Civilised Culture; Orderly Cleanliness; Democratic Governance'. This is to be achieved through lowering the nation's rate of growth (by up to 2%), resource diversion, discriminatory taxation, and pro-rural administrative policies.
Amongst the vision and the blueprint, it is easy to under-estimate the immense challenges of implementation. A recent painstaking study by a Jilin University Professor and NPC delegate outlined a host of major obstacles, including inadequate physical and social infrastructure, rapidly rising costs of fertilisers and other inputs, and lack of private finance. Not to mention the status quo's entrenched interests, including local corruption.
There is, however, no question of the leadership's resolve. All agricultural taxes and fees are to be abolished from this year. US$ 42 billion are allocated to rural spending, including free nine-year compulsory education by 2007.
Nevertheless, the increased spending represents only 8.9% of government expenditure, not very different from last year's 8.8% and even lower than the 9.2% in 2004. It is clear that with 740 million farmers, achieving all the targets is far from assured. It is relevant to note that emphasis is also placed on frugality, self-reliance and selflessness (a 'civilised rural culture') as well as practical measures such as development of 'green industries' and micro and cooperative finance.
To push forward its programme of rural renaissance, the Communist Party is to appoint thousands of younger cadres, aged around 45, all holding bachelor or advanced degrees, to become party chiefs in China's 2,861 counties. In addition, it is expected that similarly younger and better academically qualified officials will be elected to head provincial, municipal, county and township governments. Their performance appraisal is to change from a focus on growth to much broader people-and- environment based assessments, including public feedback and polls.
This drive for a socialist renaissance, coupled with Beijing's recent efforts to re-visit and review Marxism, responds to a growing mood of popular disenchantment somewhat signified by nostalgia in retracing the footprints of early communism. It also responds to a spiritual void liable to be filled by cults like the Falungong and more recently, and remarkably, by Christianity. (According to David Aikman's book 'Jesus in Beijing: How Christianity is Transforming China and Changing the Global Balance of Power', the Chinese Christian population, surreptitious or otherwise, has totalled some 200 million and is still counting.)
Until now, the countryside has largely been marginalised and disconnected from China's phenomenal growth based on urbanisation and globalisation. In his South China Morning Post article of 23 February 2006, David Ignatius highlighted the importance of internal connection to avert the danger of developing 'a political disconnect' of disgruntled and potentially explosive masses parting ways with a globalised elite. Although his arguments were meant for an Islamic context, the warning may equally apply to the polarised dichotomy of China's development today. 'Building a Socialist New Countryside' would be a stabilising appeal to the majority of China's population.
The policy shift also sits well with China's overriding development theme of Harmonious Society or Harmony - harmony between urban and rural, human and environmental, economic and social, national and local developments as well as inward and outward investment. (Check my first back number on the 11th Five Year Plan (2006-10).)
The theme likewise encompasses harmony with the rest of the world. With its bulging population, China's economy translates into a meagre per capita income, ranked 107th by the IMF and 129th by the World Bank. At US$1700, it is about 4% of that of the US. Its share of world GDP is about 5%, compared with 4.9% in 1955. China's 'Peaceful Rise' seems nothing short of realism.
China now appears to be seeking a new direction, with lower energy consumption, lower and environmentally sustainable growth, back to nature and the basics, with wealth shared more evenly amongst its people, in continued cooperation and harmony with other nations. Could this offer a development model to a world fast running the risk of incurring the Revenge of Gaia? Time will tell.
Andrew K P Leung, SBS, FRSA
