No redistribution, no 'Xiaokang'

(China Daily)
Updated: 2010-10-16 07:58
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BEIJING - China's top leaders will be looking for ways to keep economic growth on a more sustainable path while facing the widening wealth gap as they meet on Friday, at the start of a four-day meeting.

This Fifth Plenary Session of the 17th Central Committee of the Communist Party of China (CPC) is expected to determine key parts of the 12th Five-Year Plan (2011-2015). President Hu Jintao has said they need to work for "inclusive growth" and encourage consumer demand to support GDP growth as demand abroad falls off.

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Analysts say that this isn't an easy call for an economy that has grown fat on the back of cheap labor and ready exports. At the same time, laborers and farmers need higher wages, better welfare, and more affordable housing, and they're placing greater demands on the government to deliver.

"The next five years will be a crucial period for changing to more scientific development," Hu Angang, head of the Center for China Studies, a policy think tank run by the Chinese Academy of Sciences and Tsinghua University, told China Daily on Friday.

Hu said bluntly that China's current development is unsustainable and it must change.

High on the list of problems are "extensive energy consumption, the export-oriented trade, unequal income distribution, and low employment rate".

The idea of "inclusive growth" that President Hu mentioned has aroused a considerable amount of speculation about policymakers adjusting their perspective on developmental matters.

Hu himself explained that the term meant spreading the benefits of economic development among different countries, regions and people for more balanced economic and social progress.

Domestically speaking, that meant allowing all Chinese to enjoy a higher standard of living by encouraging sustainable economic growth.

But, experts point out, doing all that means a complete transformation of the country's development pattern.

The widening wealth gap in the nation with the world's largest population and second largest economy is obviously an obstacle on the road to what has been called a xiaokang, or "moderately prosperous", society.

And that poses real challenges for the top leaders because the next five years are crucial for a xiaokang society.

"Economic growth over the next five years won't be a problem," says Professor Ding Yuanzhu, deputy head of the Chinese Academy of Governance's Policy Advisory Department. "The thing is that China needs to change its mode, as well as social development, standard of living, environment protection and energy efficiency if it wants a xiaokang society."

The xiaokang idea came fromthe late Chinese leader Deng Xiaoping in the late 1970s and early 1980s while he was working on the country's developmental blueprint.

The government's goal now, for 2020, is to make sure that xiaokang is everywhere and the people are well-off, in a way that is similar to developed countries in the West.

Despite the growing wealth in the cities, there are tens of millions of Chinese still living in poverty in rural areas, especially in the vast western part of the country. And there's a huge gap between that area and the affluent coastal China.

"Investment in rural infrastructure is inadequate. There's a weak economic foundation, plus poor health services. All have hindered rural development and improvements in rural life," commented Xiong Tingwei, a CPC official in remote Maguan county, in Yunnan province.

Xiong went on to say that she hoped the central government will give a lot more support to poorer parts of western China over the next five years.

"If China wants to build a xiaokang society, it desperately needs xiaokang for the rural areas and the farmers. The key is to improve rural incomes and have full rural social security coverage," said Wang Xiaoguang, a research fellow with the Chinese Academy of Governance.

"In improving the income distribution, we not only cut the cake differently, we cut it up more fairly."

China Daily - Xinhua