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.