Dateline 2080

China aims to attain developed country status by 2080.
New report says this is possible


By HE WEIXIN

TOWARD 2080: Infrastructure development is key if China wants to compete on the world economic stage

On February 18, the Chinese Academy of Sciences (CAS) released the China Modernization Report 2005, the fifth of its kind since its first publication in 2001. According to this annual report, China is still a developing country with its economic modernization level more than a century behind that of the United States. The report also highlights China’s objective of becoming a developed country by 2080 and establishing itself as one of the world’s top 10 economic powers before the end of the century.

According to the comprehensive economic modernization index for 2002, China ranked 69th out of 108 countries in the world, while last year’s report showed it ranked 62th in 2001, in terms of this index.

In terms of per-capita gross domestic product (GDP) and two other indicators, China’s economic modernization level in 2002 equaled that of the United States in 1892, said Professor He Chuanqi, Director of the China Center for Modernization Research (CCMR) and head of the China Modernization Report research group. “We used three indicators to work out the year variation between China and developed countries, namely the per-capita GDP, agriculture-based labor to total population ratio, and the proportion of agricultural added value in overall GDP.

Professor He added that agriculture-based labor ratio in China is particularly significant, which stood at 50 percent in 2000, while that of the United Kingdom already reached 34 percent in 1801. He emphasized that this startling reality cannot be ignored. The relatively higher living standards in urban areas and major cities do not accurately reflect the country’s average standard of living.

Although China’s economy sustained rapid growth in the last 20 years of the 20th century, with annual GDP growth rising steadily, the base level of per-capita GDP is low, and actual annual growth small, while the world’s more advanced economies continue to expand.

The report suggests that modernization of economic infrastructure in China should be completed within the first 30 years of this century. Compared with developed countries, China’s current economic infrastructure is still underdeveloped, particularly in the areas of transportation, energy, information and knowledge-based industries. To attain the goals of modernization, transportation, energy, telecommunication and knowledge-based industries have to maintain annual growth rates of about 8 percent, 6 percent, 5 percent and 3 percent respectively.

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If this is achieved, China should rise through the ranks of developing countries to reach primary developed country status by 2020, moderately developed country status by 2050, and developed country status by 2080. The report predicts that this continuous growth should put China in the top 10 league of developed countries by 2100.

However, Professor He cautioned, “I must emphasize that this is an optimistic estimate. Economic modernization is not a smooth process. It can remain stagnant, be interrupted, or even regress at some points. If we don’t seize opportunities when we can, our goals might be set back by years.”

He explained that, for modern China, modernization was interrupted twice: First by the War of Resistance Against Japanese Aggression from 1937 to 1945, which set the country’s modernization process back by some 20 years, and second by the “Cultural Revolution’’ from 1966 to 1976.

In addition to possible interruptions, certain other challenges to modernization are expected, particularly during the first half of the 21st century. Such bottlenecks include economic quality, economic structure and international competitiveness, most important of which is economic quality.

Professor He said that although China has achieved great economic results in the last two decades, economic quality is still far below the international level. China’s GDP is only 1/27th that of high-income or more affluent nations. If it is to match even their 2002 levels, China has to raise its per-capita GDP, overall labor productivity and agricultural productivity by 26-fold, 32-fold and 46-fold, respectively. This would take the country 49, 46 and 50 years, respectively, to achieve at respective annual growth rates of 7 percent, 8 percent and 8 percent.

According to the report, China’s economic modernization faces 10 major arduous tasks in the coming 50 years: Sustaining the rapid growth of productivity; effecting a shift to a knowledge-based economy; completing agricultural modernization; ensuring a continuous supply of resources and energy; maintaining financial stability; achieving ecological modernization and the coordinated development between the economy and ecosystem; maintaining the coordinated development among different regions and between urban and rural areas; enhancing overall labor quality; significantly increasing innovation capacity and efficiency; and participating in economic globalization while safeguarding national interests.

Professor He added, “China has no reason to be slack or smug about its progress so far. It’s a long, hard road ahead.”

Further, two major transitional shifts in the modernization process are likely in the next 50 years. The first will be a shift from increasing scale to improving quality, which is expected to occur between 2005 and 2020. The other will involve a shift in focus from improving quality to innovating welfare, which is expected to occur between 2021 and 2050.

“Improving quality” is defined as improving economic quality through technological advancement, and growth in investment and consumption. “Innovating welfare” means to propel the development of economic quality and economic welfare through innovation, gradually working toward a more welfare-conscious society.

Professor He added that the modernization process requires China to capitalize on its inherent strengths, while at the same time seizing key opportunities such as participating in the development of burgeoning economies including green, information, cultural and biotech industries.

“We should carefully study these opportunities and ensure that we don’t miss out again,” Professor He said. Here, he was referring to China’s missed opportunities during the industrial revolutions of 1793, 1842-60 and 1957-76.

Professor He added that the CCMR report researches, predicts, and offers suggestions on policies and proposals customized to the conditions in China. He highlighted, “The report is merely a representation of our own views.”

Research on the report was conducted by the China Center for Modernization Research (CCMR), working under the auspices of the Chinese Academy of Sciences. The CCMR sources its data from organizations such as the World Bank and the Organization for Economic Cooperation and Development, as well as the China Statistical Yearbook.