Credible economic strength stems from public wealth
- Source: Global Times
- [11:27 January 22 2010]
- Comments
The contrast between rising economic growth figures and falling stock market prices may carry implications for both economists and policymakers. Regardless of the encouraging report of China exceeding its GDP growth target in 2009, mounting worries led to a sharp drop in most Asian stock markets Thursday.
Worries among investors echo the mixed reactions of Chinese netizens toward the 8.7 percent GDP growth. Most netizens take pride in the nation pulling itself out of the economic slump and its prospects of overtaking Japan as the world’s second-largest economy. Yet voices of concern, caution and skepticism are being heard.
The public mood behind these voices should not be ignored. While the skepticism may be attributed in part to the public being baffled by some exaggerated statistics in the past, it also indicates that the economic strength comes at a time of hardly any noticeable gain in the life of the ordinary Chinese.
The 24 percent upswing in housing price, the 8.8 percent increase in urban individual income, the 1.9 percent up-tick in the CPI during the last month – these, and other trends in the 2009 economic data released Thursday, show the complex nature of the challenges in the process of economic recovery.
As the first country on the economic rebound and surpassing the 8 percent mark – the key to maintaining social stability – China has survived the test of the “most difficult year” and is stepping into the new decade with renewed hope.
But there will certainly be as many, if not more, bumps on the road ahead. And, turning economic growth into sustainable livelihood for every citizen is the toughest and most complicated challenge.
Alongside shifting the growth model from being export-oriented to one driven by domestic demand, since the outbreak of the financial crisis, it has been prioritized by Chinese government to build a people-foremost society.
Though the $586-billion stimulus of the Chinese government has been effective in reviving economic growth, it has not boosted domestic consumption to the required levels. Consumption accounts for only 40 percent of our GDP, compared with an average of 70 percent in the West. The reason is simple: Given the lack of an effective social welfare system and the soaring costs of housing, healthcare and education, the catchphrase of “Bu Cha Qian” (got the money, anyway) may be an ironic comment on the situation.
It is never an easy task to build a people-foremost society that delivers both efficiency and social justice. Yet Chinese society does have a crucial role to play by overhauling the healthcare system, taking good care of the most vulnerable social groups, and addressing the widening gap between the rich and the poor.
The credibility of economic growth hinges on the well-being of the vast majority. Only then would sustainable economic prosperity become a reality toward “free and all-round development of human beings.”
