Inside the Modern Dragon
China: A 21st Century Engine of Change
China Hums a New Tune
- Introduction
- Side box
- Stong but Tenuous Growth
- Origins of Harmony
- Growth, Poverty & Development
- Endnotes (Sources)
Related links & articles
“China's Quest for a Harmonious Society”
By Patricia Mohr
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Growth, Poverty and Development
The emphasis on creating a harmonious society epitomizes China’s longtime struggle to reduce poverty while expanding its economy—goals that do not necessarily coincide. This latest attempt to infuse social harmony into policy objectives represents another yet stage in the progression of China’s experiment with “Socialism with Chinese Characteristics.” It is noteworthy for several reasons. First, it raises questions about China’s future growth prospects, which increasingly depend upon domestic demand and stability. A new development model could aid that effort, but it entails risk. If the program restricts economic openness in the name of social cohesion, it could impede growth.
China’s experiment with harmonious growth also speaks to the theoretical debate about growth and poverty. The case study will provide fodder for analysis of the relationship between growth and poverty reduction—analysis that will certainly impact the developing world.
When China first incorporated the “harmonious society” language into its 11th Five Year Plan, renowned Columbia University economist Joseph Stiglitz praised the new direction. Writing in a 2006 op-ed, Stiglitz said the development plan marked a significant and necessary a rejection of the worldwide “quixotic quest for higher GDP.” He predicted that the new plan would be more environmentally-friendly and responsive to economic changes impacting society.
"'Fast growth is still the key to solving every other problem.’”
A The New York Times news report of the economic plan provided another view. Analysts interviewed for the report expressed skepticism that China would change its course. Li Fan, director of the World and China Institute, an independent research agency in Beijing, told the NYT that:
More recently, The Economist reaffirmed that view in an article on the global recession’s impact on China. According to article, Chinese officials follow a “Protect Eight” strategy, which maintains that China needs to grow its economy by at least 8 percent per year to prevent serious social unrest.
This view matters because it explains why China is likely to stick to an export-led strategy, which relies upon its cheap labor, land and energy for survival. Up until the recently, the government had been decreasing its support for labor-intensive manufacturers in an attempt to move to higher-skilled labor. But it appears that the endeavor is now null and void.
As The New York Times reported last January, “China has become reluctant to yield the bottom rungs of the ladder to countries with even lower wages, like Vietnam, Indonesia and Bangladesh.” As exports decline, factories close and laborers become unemployed, Chinese officials are pouring more capital into export-driven businesses. New measures include export subsidies and investments in infrastructure.
Conclusion
China’s emphasis on a “harmonious society” is an important piece of China’s rise as a global power. Though ambiguous, the policy objective has the potential to become a philosophical foundation for a new economic development model.
If China succeeds in creating buy-in from the public for its integration
with the global economy, it will be able to sustain its development path,
ensuring that its citizens and the world at large can benefit from its
rapid economic expansion. But it is too soon to predict whether it will
succeed. It appears that the sweet-sounding catch phrase is still under
construction. As the recent uprising in Uighur attest, China is still
far from its stated goal of societal harmony.
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