In December of 1978, Chinese reformists, lead by Mr. Deng Xiao Ping, decided to implement a new economic reform. The goal was to transform the stagnant, impoverished planned economy of China into a market economy capable of generating strong economic growth and to increase the well-being of Chinese citizens.
33 years later, mega cities such as Beijing and Shanghai are incredibly modern. Sky scrapers have quickly replaced old Beijing hutong areas and cars have replaced bicycles. Not long ago, cars were rarely seen in cities across China, yet in August of 2010, An IBM survey rated Beijing as the most congested city in the world. One might wonder, therefore, what are the advantages or disadvantages that result from the ongoing economic transformation in China, and whether the goals of the economic reform have really been achieved; Has the well being of Chinese citizens increased?
As far as poverty is concerned, the answer is positive. According to a survey conducted in 2004 by the National Bureau of Statistics, poverty rate dropped from 250 million people (30.7% of total population) in 1978 to 125 million people (14.8% of total population) in 1985. By the end of 1992, the rural poverty population was reduced to 80 million people (8.8% of total population) and by 2003, China has successfully reduced its absolute poverty population to 29 million people (3.1% of total population). These statistics indicate that China has successfully pulled more than 220 million people out of poverty in less than 30 years. This is a remarkable achievement.
Nevertheless, the disadvantages of the economic reform are prominent, although they may be secondary in the eyes of policy makers.
As I have written in some of my previous posts, modernization carries a large environmental cost. According to the World Bank, 16 of the 20 most polluted cities in the world are in China and it is now the first-largest emitter of carbon dioxide, the main gas linked to global warming. Environmental effects carry a dire cost on the development and on the Gross Domestic Product of China: A research conducted by the World Bank and by the State Environmental Protection Administration tried to asses the economic losses resulting by economic growth. The study examines the physical and economic cost of air and water pollution in China, as reflected in the fields of pollution-related disease burden, pollution-exacerbated water scarcity, waste water irrigation, loss of fisheries, loss of crops and material damage. The study finds that the health costs of air and water pollution in China amount to approximately 4.3 percent of its GDP. By adding the non-health impacts of pollution, which are estimated to be approximately 1.5 percent of the GDP, the total cost of air and water pollution in China is approximately 5.8 percent of the GDP. Moreover, the study raises a very essential issue: If China continues to grow and does not change its environmental policies, environmental costs will increase and will hold a larger percentage of the GDP.
One might claim that another result of fast economic growth is deterioration of cultural values. I have previously mentioned in my post “The Cost of Growth” that: “I have come to realize that the Chinese are adopting certain elements in western lifestyle while eliminating some of their own cultural heritage. This phenomenon is happening all over major cities in China, and it expresses itself by one major guiding rule: Money.” One might disagree that cultural values are indeed deteriorating, yet many Chinese citizens would agree that inter-personal relationships are not the same as they once were.
Beijing is focused with the economic gains that it has achieved thus far and with the ones that it wishes to achieve in the future. Despite economic growth figures being overwhelmingly impressive, they may carry an expensive price on society in ways that are sometimes difficult to measure.
The question if the well-being of Chinese people has increased since 1978 remains unanswered. Although the quality of life in economic terms has certainly increased, the possible deterioration of cultural values and the disregard China has shown towards its environment may require government officials to change future policies; Beijing needs to begin measuring the true well being of citizens and not only economic growth.
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Lior Paritzky is the Editor in Chief and Manager of Laowaiblog, an internet platform that provides opinion and views about social phenomena in modern China. Look for Lior on Twitter: Liorpari 
good article\ blog ! keep it up LP
I like your analyses on the growing economy in China and the concern with the environment. Those who make policies regarding development should care also about maintaining the ties with the past culture and protect the family value that makes Chinese society strong as a whole. To disregard this is to kill the fish and destroy the water.
Thank you Lima! Do you think that there are other factors that should be considered as China continues to grow?
Lior
Very interesting indeed. You state some pretty fascinating data, numerically-wise – with all it’s cost and effect. It’s very interesting to read ! Well done. You must not forget though, that despite China’s great-leap into industrialization and the smaller poverty rates that followed – it’s still a country that holds one of the biggest domestic social-gaps in the world when it comes to life-quality (the cities verses villages). So, it’s not all success in that point…
Clear, concise and informative article. Your observations (last paragraph) are the ‘unknowns’ to China’s future, since it is still government decisions that dictate it’s direction and not the billion Chinese.
דרך אגב
…impressive resume.
Fairly, the Chinese policy maker’s approach of developing Economic is quite barbaric: keeping the cheap labor so that it can attract overseas investment, building mega polluted manufacturing system without thinking the cost of environment, encouraging people making money AMAP but ignoring the ancient culture of Morality…….. all these matter has achived an efficient society with “no justice:”.
Definitely, majority of Chinese are fighting for their survial while minority are enjoying luxury life style. Actually the typical western-life: Relax, fair, free and “rich” is what all the chinese looking for, but tsadly, they just can’t get it.
But I think the “no-easy” life in China may transfer the whole nation into more agreessive, energetic, and ambitious characteristic. And they will probably achieve a more-powerful econimy, and state as well. Unfortunately, the “Barbarian” always win the “game” over in the history.
You sound like a CCP trumpeter. Everything is great! Everything is wonderful!
If there is anything negative, sugarcoat it…with lots of sugar!
For your excuse, you’d probably lose your job, or worse, if you told the truth.
But at the end of the day, you are the one who made the choice to live in a totalitarian society, and tow the party line. Zai jian!
Hi Gabe,
Thank you for your comment, yet I disagree with you. If you take the time to read some of my other posts, you will see that not everything is great. There are certain elements that are, to me, amazing and overwhelming, but there is still a long way to go for China, in many aspects.
Lior
rome is not build in one day. it takes many transformations as history has proved
China is following the paths of the other East Asian countries like Japan, Korea and Taiwan. Pollution was also an issue with these countries. Are they still? Not anymore. What happened? they got rich. In fact, every industrialized nation follows the same path. First, they got rich, then they clean up. In that regard, China is no exception.
“The question if the well-being of Chinese people has increased since 1978 remains unanswered.”
Well, no.
I’m not sure what your definition of “well-being” might be, but counting calories consumed, infant mortality reduced, longevity, incidence of infectious disease or any of a myriad of other non-cash, non-GDP measures would go a long toward suggesting that China has seen more people rise out of poverty since 1978 than any other nation in human history, either as an absolute number of people or as a share of the world’s population.
Hi Dor,
Thank you for your comment. I agree with you, but what do you think about the cost that China is paying for that “well being”? environment and cultural values are very significant in a nation that is growing as fast as China.
Lior
Good article. Which part of China are you living in? I visited Beijing and Shanghai during the 2008 Olympics and it was a real eye opener ! I expect that things have changed substantially since then, given the high rate of progress.
Hi Francis,
Thank you for your comment. I live in Beijing, and things constantly change here. It is quite the incredible city
Lior
Even though I am not Chinese, I can say without a doubt that the quality of life, just in the short period of time that I have been here, has risen significantly. This is because the government is investing money to improve people’s lives, and it is evident in infrastructure, in pollution (that is getting better) etc. We must not forget that even the great United Kingdom, back when it was just beginning to be an empire, underwent the same process. So let us not judge China for what it is doing, because I know some western nations that have done much worse.
Lior, you said: “Beijing needs to begin measuring the true well being of citizens and not only economic growth”. Look at the twelfth five year plan. It is all about that. Growth is planned to be at 7% (minimum, but still) and the focus is on inflation and the well being on citizens. So Poverty in China will still decrease while the quality of life will increase. Or at least that is what we all hope