China Projects Eight Percent Annual Growth
Over Next Five Years
The Chinese government is projecting a steady 8% growth
every year over the next five years, forming what they
refer to asl a "golden period" of growth in
the country's economic development. Translated into GDP
terms, it would mean that China's GDP would rise to 21
trillion yuan (US$2.6 trillion) by 2010. Per capita GDP
would rise to US$1,900, up from the current $1,400.
The figures were given by Wang Mengkui, director of
the State Council Development and
Research Center, which plays an important role
in planning the country's economic development.
The fact is, right now, government figures need to be
taken with a grain of salt. At best, they are estimates;
at worst they are guesses. The Chinese government is
in the midst of taking an economic census, the first
it has taken since the beginning of China's economic
reforms. The aim of this census is to capture a snapshot
of the Chinese economy, especially its private
sector, which has grown by leaps and bounds within
the past few years. Without this census, there is no
way for the Chinese government to even begin to estimate
the size of the Chinese economy.
In order to get an accurate assessment, the government
has promised Chinese business owners, for the first time,
that data they submit will not be turned over to the
tax authorities.
This is the plus side for economic statistics. On the
minus side, there is still a large amount of deep poverty
in the Chinese countryside. Safety for many workers,
especially coal mine workers, are appalling, with an
unacceptably high number of deaths which the Chinese
authorities will need to bring down. The wealth gap between
the rich and poor continues to grow.
However, there are signs that rural poverty is abating.
The most visible is labor
shortages in southern China, which are an early indicator
that the wages offered by many factories are not attractive
enough to attract the mostly young female unskilled laborers.
Chinese companies will also have to bring down the number
of intellectual property disputes and violations, especially
with the US. Frustration on the part of US companies,
especially the entertainment industry, have raised the
possibility of disputes being taken to the WTO for resolution.
Chinese courts will need to build up their own body
of intellectual property law, separate from US IP law,
which favors the copyright holder too much by giving
protection for too long periods. Instead, the Chinese
should look at more flexible methods of copyright protection,
such as those put forward by the Creative
Commons in the US, which would offer more incentive
to innovation.
Taking all these provisos into mind, the general drift
of Wang Mengkui's predictions are correct, and it will
form a new golden period of economic growth for China.
Because state figures do not have reliable statistics
for the private sector, there is a significant chance
that the figures projected by the State
Council Development and Research Center are significantly
lower than reality. The variance can be huge, depending
on how much weight is given to rural and urban populations.
Compared to the four tigers of Asia (Taiwan, Hong Kong,
South Korea and Singapore), it will be similiar to
the 80s, which were a period of robust growth in the
region. This culminated, in South Korea's case, in the
1988 Olympics hosted in Seoul.
Beijing will host the 2008 Summer Olympics.
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