China embraces move towards ‘common moderate prosperity’

THE Chinese government released a white paper last month, ahead of the 72nd founding of the People’s Republic that documents China’s journey to moderate prosperity.

It hopes that by sharing its modernisation experience with the rest of the world, it can promote a “common moderate prosperity” for all humanity.

The term “xiaokang”, meaning moderate prosperity, has been a consistent aspiration of the Chinese nation since ancient times. The first recorded mention of the term was more than two millennia ago in the

More recently, the Chinese government has, via its national congresses and Five-Year Plans, set out a phased approach of achieving modernisation and common moderate prosperity.

The first target was to double the size of the economy in 1980 by the end of the 1980s and ensure that people would have adequate food and clothing – basic needs would be satisfied.

The second target was to double the size of the 1990 economy by the end of the 20th century and ensure that most people could enjoy a moderately prosperous life.

The third target, under way is to increase the per capita GDP level to that of moderately developed countries, ensuring that most people can lead a relatively affluent life, and achieve basic modernisation by the middle of this century.

As the world’s second largest economy, China accounts for just over 17% of the global total as its economy grew from only RMB 67.9 billion in 1952 to RMB 101.6 trillion last year. This meant its per capita GDP soared from less than $100 a year in 1952 to more than $10 000 last year, almost double South Africa’s R79 913 per capita GDP last year. It also meant that China achieved a historic transformation from a low-income country to an upper-middle-income country.

For years, China has been ranked first in the world in added value in the manufacturing sector and output of more than 220 major industrial products, and was the world’s largest manufacturing country for the past 11 years. It ranks first in trade in goods and foreign exchange reserves, and second in terms of its trade in services and consumer market, which explains why it was the largest recipient of foreign direct investment last year.

Last year, China was the first country to bring the Covid-19 pandemic under control and reopen its economy. It was also the first economy to shift back from negative to positive growth. This reflected the resilience of China’s economy and its 1.4 billion population, including a middle-income group of more than 400 million people that keeps expanding at double-digit growth rates, offering a market for South African exports that is growing faster than any other place.

The importance of China to the global economy is highlighted by the fact that, since 2006, it has been the single largest contributor to global growth, making an average annual contribution of more than 30% of world economic growth. In 2008, when the world economy was struck by the global financial crisis, China took effective measures and quickly restored its economic growth to a relatively high rate. It became a stabiliser and driver of the global economy.

China is the largest trading partner of more than 50 countries, including South Africa, and one of the top three partners of more than 120 in total. China is offering bigger markets, better co-operation opportunities, and greater development space to businesses from all over the world.

The white paper concluded “the way forward will not be smooth, but the prospects are bright and broad”. It said the Chinese nation would make a greater contribution to the progress of human society. China is our top trading partner in exports and imports. In August it took 11.6% of our exports and supplied us with 19.7% of our imports, so we can be glad we are able to share in China’s journey towards “common moderate prosperity”.

Preuss is an economist at forecaster Ecosa