Sat, Apr 04, 2015 - Page 8 News List

Congress highlights China’s issues

By Sushil Seth

That there are problems with China’s rapid economic growth has been known for some years. After double-digit growth rates over many years, China is now settling for single-digit growth.

Last year it was 7.4 percent, said to be the slowest in more than two decades. This year, as announced by Chinese Premier Li Keqiang (李克強), it would be “about 7 percent,” half a percentage point down from last year’s aspiration of “about 7.5 percent,” and a “new normal” for the Chinese economy.

Speaking at the annual session of the Chinese National People’s Congress, Li was candid about the problems facing China’s economy, even though its growth rate is still the envy of many countries.

In his annual report card, Li said: “With downward pressure on China’s economy building and deep-seated problems in development surfacing, the difficulties we are to encounter in the years ahead may be more formidable than those of last year.”

After Mao Zedong’s (毛澤東) death in 1976 and the end of the Cultural Revolution, which turned China upsidedown during the 1960s and into the 1970s, China was set on a high growth trajectory during the 1980s while former Chinese president Deng Xiaoping (鄧小平) was at the helm. Despite the great convulsion of the student-led democracy movement of 1989, put down by the army, Deng managed to keep the state on an even keel, the economy growing and transforming China into a strong country.


In the process, he was prepared to discard communist ideology in favor of capitalist growth, but all under the tight political control of the Chinese Communist Party (CCP). Deng did not mind if this made some people rich and increased the rich-poor gap. It also greatly widened the gap between coastal regions as the favored development zones and the nation’s interior, as well as between urban and rural areas. Everything else was subordinated to the economic growth index.

Over the years, the high-speed industrial development led to all sorts of problems. The growth of urban industrial centers encouraged developers and their party backers to virtually expropriate rural lands on the outskirts of overlapping boundaries, with nominal or very little compensation causing social tensions. Such developments led to a tremendous boom in real-estate prices, making developers rich and contributing to a bubble-bust situation. Some apartments and estates have no buyers because of high prices.


Another serious problem from such high-speed development has been the plague of corruption from the highest to lowest levels of the party and bureaucracy. Chinese President Xi Jinping (習近平) has made the eradication of corruption a crusade and some high rollers in the party have become its victims. It sometimes has the look of a political purge and is causing some fear in the party ranks and among associated people, like relatives and cronies occupying cozy and powerful positions in state monopolies. The crackdown is also said to extend to the military. However, the high-pitched anticorruption drive seems to go well with people who have become sick of the system.

Speaking on corruption, Li said in his report to the congress: “Shocking cases of corruption still exist. Some government officials are neglectful of their duties; holding on to their jobs while failing to fulfill their responsibilities.”

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