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When it comes to GDP, what really counts is quality, not quantity
By Wan Lixin |
March 11, 2010, Thursday
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Print Edition
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THE main Page 1 headline in yesterday's Oriental Morning Post said: "Housing price up 1.5 percent last year - the whole world will not buy it."
The subheading read: "Xinhua reveals the number tricks."
Nearly all Chinese know about such tricks.
But the newspaper captures the surging public sentiments about the housing issue. The sentiments have been strongly represented by the deputies to the ongoing National People's Congress - but dampened by official announcement that there is little the government can do about the housing price that is set to rise for another 20 years.
Some find it increasingly hard to take solace in the glowing GDP figures.
For one thing, many people do not see their earnings rising commensurately with GDP.
According to a survey published in the Oriental Morning Post yesterday, nearly a quarter of grassroots workers at state-owned enterprises (SOEs) had not seen any increase in their wages for the past five years.
A survey of 208 public-listed SOEs suggested that in 2006 the senior management were earning 6.7 times more than workers, while in 2008, they were earning 18 times more.
The wages of the workers have yet to be adjusted for inflation, and can be easily negated by even a modest 1.5 percent rise in home prices.
Confucius said "a wise ruler should be more concerned with uneven distribution of wealth, rather than poverty."
Some insist that accelerated growth will iron out the disparity. Experience in the past few years suggested it will only worsen the gulf.
During this congress, the adjustment of the economic growth mode is reiterated, but some local officials have already been incurably addicted to GDP growth.
There is urgency to enlighten officials on what GDP is supposed to be, what it actually is, and why superstition about it is unhealthy.
In a talk with us in January, Zeng Xiaodong, resource management officer of The World Bank, said, "The impact of the financial crisis on Americans is minimal, except that there are fewer Hummers on the road - the most impacted is actually China."
This was not original - my observations had suggested this to me before: US supermarkets were still crowded with stout matrons pushing shopping carts piled with cheap consumer goods that were getting cheaper.
China's glowing growth figures are winning us kudos from around the world, and it is not strange that compliments of such scale can induce a sort of self-aggrandizement.
Some of these flatterers are innocent: for instance, not all Westerners realize that those ubiquitous Chinese clearing Coach outlets of their stock do not represent the norm.
Sometimes these kudos can be self-serving. They rationalize the agitation that more generosity should be expected of China as a rich country, and that it should not continue to get loans from The World Bank.
We should be very vigilant about this selective perception of China's situation.
As military commentator Dai Xu observes, what counts is the quality, not quantity, of the GDP.
What does our GDP mainly consist of? Property and the textiles, Dai asserts. He believes a housing sector cannot sustain the rise of a big power.
In his book "Warnings in Halcyon Years," he points out that the property market is essentially "domestic monopolized capital plundering the Chinese wealth in cahoots with international capital."
In American shops, clothes and toys are predominantly Made in China.
That's not because Americans do not know how to clothe themselves or amuse themselves, but because in China the resources and the human labor required in making these things have been priced at a level that is dignified as "competitive."
It's time we think twice before sharpening this double-edged "competitive edge."
The subheading read: "Xinhua reveals the number tricks."
Nearly all Chinese know about such tricks.
But the newspaper captures the surging public sentiments about the housing issue. The sentiments have been strongly represented by the deputies to the ongoing National People's Congress - but dampened by official announcement that there is little the government can do about the housing price that is set to rise for another 20 years.
Some find it increasingly hard to take solace in the glowing GDP figures.
For one thing, many people do not see their earnings rising commensurately with GDP.
According to a survey published in the Oriental Morning Post yesterday, nearly a quarter of grassroots workers at state-owned enterprises (SOEs) had not seen any increase in their wages for the past five years.
A survey of 208 public-listed SOEs suggested that in 2006 the senior management were earning 6.7 times more than workers, while in 2008, they were earning 18 times more.
The wages of the workers have yet to be adjusted for inflation, and can be easily negated by even a modest 1.5 percent rise in home prices.
Confucius said "a wise ruler should be more concerned with uneven distribution of wealth, rather than poverty."
Some insist that accelerated growth will iron out the disparity. Experience in the past few years suggested it will only worsen the gulf.
During this congress, the adjustment of the economic growth mode is reiterated, but some local officials have already been incurably addicted to GDP growth.
There is urgency to enlighten officials on what GDP is supposed to be, what it actually is, and why superstition about it is unhealthy.
In a talk with us in January, Zeng Xiaodong, resource management officer of The World Bank, said, "The impact of the financial crisis on Americans is minimal, except that there are fewer Hummers on the road - the most impacted is actually China."
This was not original - my observations had suggested this to me before: US supermarkets were still crowded with stout matrons pushing shopping carts piled with cheap consumer goods that were getting cheaper.
China's glowing growth figures are winning us kudos from around the world, and it is not strange that compliments of such scale can induce a sort of self-aggrandizement.
Some of these flatterers are innocent: for instance, not all Westerners realize that those ubiquitous Chinese clearing Coach outlets of their stock do not represent the norm.
Sometimes these kudos can be self-serving. They rationalize the agitation that more generosity should be expected of China as a rich country, and that it should not continue to get loans from The World Bank.
We should be very vigilant about this selective perception of China's situation.
As military commentator Dai Xu observes, what counts is the quality, not quantity, of the GDP.
What does our GDP mainly consist of? Property and the textiles, Dai asserts. He believes a housing sector cannot sustain the rise of a big power.
In his book "Warnings in Halcyon Years," he points out that the property market is essentially "domestic monopolized capital plundering the Chinese wealth in cahoots with international capital."
In American shops, clothes and toys are predominantly Made in China.
That's not because Americans do not know how to clothe themselves or amuse themselves, but because in China the resources and the human labor required in making these things have been priced at a level that is dignified as "competitive."
It's time we think twice before sharpening this double-edged "competitive edge."
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