China Dream And The China Path, The

Tianyong Zhou

• Publisher: WSPC
• Year: 2013
• ISBN:
  9789814472685
• Topic: Economics
• Subtopic: Development Economics
• Index: Economics

Since its reform and opening up, China has experienced unprecedented social and economic development. It is important to understand the biggest and fastest growing economy's policy and strategy. As a key director in Party School of the Central Committee of the Communist Party of China, the author proposes a development path and reform strategies for China in the next three decades.

This book suggests reform strategies not only for the economic structure but also for the political system in China. The author makes a sound analysis and exposition of “Chinese dream”, which reflects the vision of a better life in the future and the main indicators of social change. The book investigates China's development path, political system, economic structure, people's livelihood etc and suggests long-term strategies for China in this regard.

Contents:

• Chinese Dreams for the 21st Century
• China's Development Road to Realizing Chinese Dreams
• Selection of Development Road: Material Structural Adjustment and Competitiveness Promotion
• Without the Transformation of the Development Mode, China has No Way Out in Resources and Environment
• Resources and Environmental Constraints: What China Should Do in the Future
• The Focus of the Second Reform: Fiscal and Taxation System
• Elimination of Polarization and Realization of Common Prosperity
• Improving the Economics Systems: Reform of Land, Finance, and State-owned Economy
• Route Map of China's Road

Readership: Undergraduates, graduates and researchers who are interested in China's development path, political system, economic structure, people's livelihood as well as China's long-term strategies.

Chapter 1

Chinese Dream for the 21st Century

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During February 2010 until the beginning of 2011, I conducted research on the following: How to adjust the development structure? How to remove the constraints put in place by resources and environment? How to reform the fiscal and tax systems? How to practically narrow the income gap between the rich and poor? How to prevent polarization and realize common prosperity? and, How to further reform the land, finance, and state-owned economy? This book, as the result of my efforts, largely aims to propose a road map for future development, reform and opening of China and design a practical road and comprehensive overall plan.

This chapter focuses on the Chinese dreams of the 21st century. I will explain the significant achievements made over the past three decades since the late 1970s under the leadership of CPC, based on the spirit of reform and opening up that originated from China’s dream to achieve development and modernization.

1.Introduction: Equitable Analysis of the Achievements in the Past Three Decades

Despite some achievements, the first 30 years of the foundation of the People’s Republic of China did not see significant economic growth. Unfortunately, CPC did not change from a party of revolutionary struggle to a party of economic construction. After the foundation of the country, China still placed class conflicts as the central task of the party and regarded the commodity economy that stressed on developing productivity and improving people’s living standard as capitalism. Even though China had waged arduous struggles in economic development, they were seen to have wasted 30 years in economic development and scientific and technological progress, and were listed as the lowest of all countries and economies in economic development and modernization in the first three decades.

Thirty years ago, Deng Xiaoping led the party and all Chinese out of chaos and took steps to modernize. In terms of the willingness and actions of the governing party and the government’s presence in the structure of agricultural society, Deng Xiaoping’s actions were unprecedented.

In the following 30 years, CPC has gradually transformed itself from a party of revolution and struggle to a party of governance and economic development, additionally placing economic development as the unswerving central task of the party. Chinese economy has developed at an annual growth rate of 9.7%, while its GDP per capita 30 years ago, which was only two-third of India’s GDP per capita, grew from about 200 U.S. dollars (USD) to 3,000 USD in 2008, which is now three times that of India. Some have equated this fantastic growth as a miracle.

Urbanization, considered an important symbol of the country’s transformation from a backward agricultural society to a modern society, improved from less than 18% at the beginning of the reform and opening up to 45% in 2008. China has initially stepped from the agricultural society to industrial and urban society and entered the medium term of urbanization.

In the past three decades, industrialization of China has been rapidly and favorably promoted, thus ushering its entrance into advanced industrialization period. Along with a stronger industrial system, the advancement of the heavy and chemical industrial foundation has seen constant progress in terms of equipment, technology, and scale. Household electrical appliances, mobile phones, computers, and the auto industry and its facilities have met the increasing demands of 1.3 billion people and reached world levels, including the foreign- capital enterprises in China. The industrial structure has been adjusted, optimized, and upgraded.

A modern traffic system has also taken shape in China. The exceptional development of high-speed railways, light rails, classed highways, city subways, formation of power, oil, and gas transmission networks, and the establishment and upgradation of high-speed information network have laid the foundation for the completion of the first phase of modernization and further development of the second stage of modernization.

In the past 30 years, China has also made every effort to improve science and technology, reducing the gap with developed countries from about 50 years to 10 years. Though China may have been several decades, or even a hundred years, behind the level of developed countries at the beginning of reform and opening up, China has reduced this gap with breakthroughs in many fields, including mobile communications, high-speed railway technologies, mainframe computers, new energies, large aircraft manufacture, large hydroelectric power and gas generators, and seed-breeding of grains. China has also reached or even surpassed international levels in many aspects.

Thirty years ago, foreign scholars, politicians, and public opinion generally believed that CPC could not solve the food shortage problem of China’s population, totaling about 1 billion people. However, in those 30 years, CPC did not only solve the food shortage problem, but also significantly improved people’s living standards. The Engel coefficient of urban residents has dropped from 57.5% in 1978 to 37.9% in 2008, while the coefficient of rural residents has declined from 67.7% in 1978 to 43% in 2008. Dramatic changes have occurred in the living standards of rural and urban residents. Laborious house-hold chores that included lighting kerosene lamps, chopping wood, lighting the stove, making noodles and washing clothes by hand, carrying water, and sewing clothes have essentially disappeared. Family properties and appliances, such as watches, bicycles, radios, and sewing machines, have been replaced by mobile phones, televisions, electric washing machines, refrigerators and cars. In addition, electricity, water, gas, and internet networks have helped to facilitate and ease people’s lives. The absolute poverty population dropped from 250 million at the beginning of reform and opening up to about 20 million today.

Since the 1970s, China has essentially completed the transformation from a planned economy to a socialist market economy and established a society full of enthusiasm for future development. The market adjusts the commodity supply and demand and price of more than 99% of commodities, and the market systems for commodities, capitals, technologies, real estate, and foreign exchange have been formed. China also reformed the ownership structure of “(concerning the people’s commune) large in size and collective in nature” to a pattern of fair competition and common development of different ownerships. Currently, more than 75% of labor in China is working in private enterprises, limited liability companies, joint-stock companies, and foreign-owned enterprises. Despite some new problems in the relations between local and central authorities, the fiscal and tax systems have been adjusted, which enabled both central control and enthusiasm for local development. The competitive economic development among provinces has become an important driving force for the economic adjustment and growth of China.

Regarding foreign relations, China, once a closed society, has now opened itself to the world. China has refocused its attention from the development strategy of import substitution to export orientation and export substitution, established an overall opening of multi-level and wide range (including allowing foreign investment, establishing special zones and opening coastal, frontier and inland areas), commenced bilateral, multilateral, and economic zone cooperation for common development, started the exchange rate control, and finally formed the exchange rate market under the administration. In these 30 years, China has obtained enormous benefits from opening up to the world by introducing foreign investment and technologies, learning advanced foreign enterprise systems and management and exportation of products created by domestic surplus labor force. The current economic and political status of China in the world is drastically different from that in 1978.

In the past 30 years, China has welcomed the return of Hong Kong and Macao as special administrative regions and maintained favorable development in the economic and cultural relations with Taiwan. Despite some financial hardships after their return, the economic development of Hong Kong and Macao have not been restricted, but have seen more dynamic growth based on the integration with mainland China’s economy. Mainland China and Taiwan have established trade and travel relations, and conducted cultural exchanges, and thus further strengthened the economic, cultural, and national ties between both sides of the straits. People from both sides are increasingly conscious of them belonging to the Chinese nation and family.

In the past three decades, especially the first 10 years of the 21st century, CPC has attached great importance to public service and people’s livelihood and exerted efforts to establish a society with a modern security and welfare system, in addition to economic development. The finance expenditure, which had mainly concentrated on basic construction, has expanded to include public service and social security, including education, health care, agriculture, ecological environment, and urban traffic. China’s recent achievements include (1) establishing the minimum living system for low-income urban and rural residents thus eliminating the existence of jobless urban families; (2) exempting the agricultural tax and tax on native products of agriculture and forestry and providing subsidies to peasants for planting crops and purchasing agricultural implements and high-quality seeds; (3) establishing new cooperative medical care system in rural areas and pilot endowment security system in some rural areas; (4) expanding the social security network by building a medical security system and endowment security system for preschool children, students, and unemployed people in urban areas; (5) strengthening the transfer payment in old liberated areas, areas of ethnic minorities, outlying areas and other less-developed areas and applying special policies to facilitate the development of these places; and (6) controlling the housing prices in cities and establishing the housing guarantee system to solve the housing problem of middle and low-income residents. Though the social security and welfare system is still weak, incomplete in coverage and cannot meet the requirements of all urban and rural residents, the party and the government have begun to improve the situation and are insisting on establishing a modern country of vigor in creativity, work, public service, and social security for all people in the next ten years.

China has made significant achievements in recent history, especially when compared to other developing countries and as well as to previous periods in Chinese history. Despite the large population, new issues, and historical problems, the painstaking efforts of Chinese Communists and Chinese people in the 30 years since the reform and opening up in achieving modernization cannot be denied.

2.Introduction: Why do we put Forward and Discuss Chinese Dreams?

About 300 years ago, Puritan immigrants from England traveled across the Atlantic Ocean on the Mayflower to Plymouth, Massachusetts in search of religious and political freedom. This was the birth of the “American Dream”. The “American Dream” encompassed a belief that all people had equal opportunities to achieve their dreams. The “American Dream” refers to an ideal where everyone can achieve a better life through hard work, and obtain prosperity based on their own work, courage, creativity, and determination, and not merely by depending upon other people or belonging to a particular social class. According to my interpretation of the “America Dream,” it represents the spirit of economic success and entrepreneurship. Many European immigrants settled in America in search of their “American dream.” (Baidu Baike, 2010).

Therefore, what is the source of Chinese dreams? Does the Chinese spirit drive the “Chinese Dream?” We believe there is, and there must be.

Since the 20th century, with the spirit of “survival of the fittest” and the underlying perpetual need for self-improvement, the Chinese tirelessly fought against foreign forces and finally founded the People’s Republic of China in 1949. In the late 1970s when China’s economic development was far behind many other countries, the Chinese initiated actions toward reform and opening up. They concentrated on the construction based on their spirit of self- improvement, overcame the constraints of a large population, lack of resources, low productivity, and increased GDP per capita from 200 USD in 1978 to 4,100 USD in 2010 through the three-decade efforts, raising from the global bottom two or three to medium-lower level. In the last century, the Chinese have depended on their Chinese spirit in state’s foundation and construction. Though the Chinese spirit has not been clearly defined, it is rooted in several hundred millions people’s dream of independence, state’s foundation, economic prosperity, and greater power.

After 30 years, since the reform and opening up and the first decade of the 21st century, China seeks to adjust the direction and explore a new road of social harmony and scientific development according to the new world pattern, situation, and problems in the future.

It is important to note that China needs to establish its own path for future development. A common perspective shall be formed among the party, government, and citizens on the methods to follow China’s own way and the necessity for structure adjustment and reform. A strong, united Chinese spirit in the 21st century is necessary for a nation with such a huge population to achieve greatness. The Chinese spirit is rooted in the hopes and dreams of the Chinese people, a population that accounts for 1/6–1/5 of the world’s population. A nation without desire and hope for the future will definitely lose its ambition and spirit. Then, will the spiritual source be able to sustain Chinese motivation to endure such efforts in the 21st century? I believe the Chinese dream is rooted in people’s obligations, trust, hopes and dreams for themselves, families, society and country in the future, and the pursuit for the vision and ideal of China.

3.The Dream of Several Hundred Million Chinese: Becoming a Townsman

As China is undergoing the transformation from a rural and agricultural society to an urban and industrial society, hundreds of millions of peasants are working to realize their dreams. The older rural population is sacrificing all they have to enable school education for their children so they can move away from the rural areas, while the younger population aspires to becoming townsmen and live in urban areas. Urban families also make sacrifices for their children to attend a university, pursue master’s degree, and even send their children to study abroad. Although their hopes and dreams may differ, both the old and young generations, hope and struggle to achieve success in economic and social status.

3.1.Countrymen’s dream of becoming townsmen

Hundreds of millions of countrymen are dreaming of becoming townsmen. Urbanization is irresistible, according to the economic and social development process. Throughout history, the development of human civilization is actually the transition from a rural and agricultural economy to an urban economy. What are the dreams of the 200 million peasant-workers and four to 500 million peasants who are moving to cities? They dream of getting a job of rational income in the city or starting their own businesses; renting a proper home and eventually, after several years of hard work, buying a house in the city for their families; enabling themselves and their children to obtain education, the same as other urban residents; enjoying the same medical care and endowment system; not being despised by urban residents and the system; and sharing equal rights with other urban citizens. Chinese peasants, as many as 800 million, are dreaming of becoming townsmen in the next two or three decades. This has never been seen in the world history at such a large scale, with such strong flexibility and momentum.

3.2.Dream of new villagers of peasants remaining in rural areas

In many rural families, the middle-aged and elderly population make many sacrifices to send their children to school, who will most likely go to cities after obtaining their education. They sacrifice their own hopes so that their children may become townsmen and live a better life. But what about the dreams of the middle and old-aged? They also wish to do farming, forestry, husbandry and fishing which will earn them a satisfactory income to enroll themselves into medical care and endowment system, enjoy public facilities and services such as basic transportation, gas supply, water supply, power supply, communications, medical care, education, refuse and sewage disposal, communicate often with their children living in cities, and reunite with their children every year, as per their customs. The middle-aged and elderly would hope that they live a better life when they become older, enjoy a fair and just life, maintain good relations with their neighbors, live in a harmonious village, and inherit the cultural heritages. This is the dream of hundreds of millions of peasants remaining in the rural areas. The number may reduce from the current 700 million to 200-300 million in the future. I will name this as “the dream of new villagers under modernization”. Though fewer and fewer people are still holding on to this dream, the large scale, strong requirement, huge demand, high cost and heavy burden of the dream can hardly be seen in any other part of the world.

4.The Dream of Good Living and Work

As calculated by 30% of the registered household population, China has 400 million native urban residents. Since more and more people who transfer to cities establish permanent residences, the population of urban residents may reach 80% (1.2 billion) in 2040. This ideal, which is to increase urban residents from 400 million to as many as 1.2 billion, is rarely seen in other developing nations.

Although the dreams of 400 million to 1.2 billion individual urban residents vary, their dreams are the driving forces for the economic and social development in the next three decades. It then raises the question — what hopes and dreams do they have?

4.1.Dream of housing: comfortable, proper, and self-owned

The most important dream of every Chinese urban family is to own a comfortable and proper house in the city. Many people have realized this dream, but a significant number of urban residents are still living in small houses under poor conditions. These urban residents are dreaming of ideal houses. Within several years of employment, many students that graduate from junior colleges and special secondary schools; or demobilized or transferred soldiers, live in poor conditions and struggle to make ends meet, and these numbers continue to increase. They strive to fulfill their dreams of buying their own houses by saving as much as they can, even if it is only a few dollars. For those living in small rented rooms, renting houses in villages within cities, or suburban peasant families working several hours every day, buying a house may be their first and ultimate dream. Eighty five percent of urban citizens cannot buy their own houses, but can only rent houses from 15% of urban residents. This is not in accordance with the cultural tr...

Table of contents

• Cover Page
• Half Title
• Series Title
• Title Page
• Copyright
• Foreword by Zheng Xinli
• Foreword by Li Junru
• Content
• Chapter 1 – Chinese Dream for the 21st Century
• Chapter 2 – China’s Development Road to Realizing Chinese Dreams
• Chapter 3 – Urban and Rural Structure: The Correct Road of Urbanization
• Chapter 4 – Without the Transformation of the Development Mode, China has no Way Out in Resources and Environment
• Chapter 5 – Resources and Environmental Constraints: What China Should Do in the Future
• Chapter 6 – The Focus of the Second Reform: Fiscal and Taxation System
• Chapter 7 – Elimination of Polarization and Realization of Common Prosperity
• Chapter 8 – Improving the Economics Systems: Reform of Land, Finance, and State-owned Economy
• Chapter 9 – Route Map of China’s Road
• Epilogue
• Index