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China

The Risks Of China's GDP Obsession

Beijing eternally under construction
Beijing eternally under construction
Hu Jiayuan

BEIJING — Last month, Chinese leader Xi Jinping gave a speech and released a document to local authorities reaffirming a key new reform message: From now on, “officials should no longer blindly compare only their GDP when it comes to performance and success."

Xi added that "the problem of "GDP-based promotions' shall be rectified.”

His words are widely regarded as a call to arms by the Chinese central government to carry out a governmental structural reform, transforming the very way the country develops. Indeed, up to now, economic performance has always been the overriding indicator of local officials’ political achievements.

To be objective as a way of measuring economic development the gross domestic product indicator isn’t bad at all. It was thanks to double-digit GDP growth over the past two decades that the Chinese miracle could be quantified for the world.

Even now, in a new phase, GDP still retain its far-reaching significance. In particular, since the Chinese economy began to slow to a more normal pace this year, it has been made clear to all that maintaining the past high rate of growth is no longer realistic.

But beyond its obvious social utility, the problem with GDP in China is that it created a statistically-driven, development-oriented government economic model, as well as a corresponding top-down political achievement assessment system.

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Shanghai from above (Yakobusan)

Under the baton of this singular benchmark, many local officials focus more on numbers than on real substance. So as to compete with others on GDP, low-quality construction projects are repeated. This inevitably leads to both waste and excess product capacity and what we can call a kind of "economic development deformity."

End of GDPism

China is paying for it with such social costs of pollution and the deepening polarization of rich and poor. The “smog economy” and the “demolition economy”, as they are dubbed by the public, all reflect people’s discontent. The various "grey GDPs," or even "bloody GDPs," have not only weakened Chinese economic health — but it has also reduced Chinese people’s sense of well-being.

It’s imperative that China gets rid of its GDP-ism. Only if the governors in power can be stripped of the vanity of pursuing GDP growth can people’s livelihood, happiness and sustainability become the rightful aim of economic development.

Such an assessment requires the setting-up of a GDP weighting ratio in political achievement evaluations. Various reasonable alternatives such as improvement in standards of living, social progress and ecological efficiency could be taken into account so that governmental actions can meet the people’s expectations.

After all, were a government really “public services-oriented,” then the local authorities’ service level should be judged and examined by local people. Only by enhancing people’s participation, the right to speak and the right to judge and form the checks and balances can the assessment criteria such as well-being and eco-efficiency — so hard to quantify — avoid falling into being vague window-dressing.

Only if local authorities and local officials are supervised by the local public can China cultivate civil servants who not only are responsible to their superiors, but even more so to the public at large, who understand better what it means to achieve truly sustainable development.

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