China cannot claim to support globalization while brushing aside the concerns of Western analysts. So its political agenda is a delicate balancing act between Western concerns and its social contract. Case in point: China announced a $42 billion stimulus package for consumption, but previously allocated $139 billion for public projects.
Unlike “harmony,” the modern form of GDP is an American concept developed in the 1930s. Once hailed by the U.S. Department of Commerce as “one of the greatest inventions of the 20th century,” it has become the benchmark of the global pecking order, headed by the U.S.-led Group of Seven (G7).
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“Socialism with Chinese characteristics” explained
“Socialism with Chinese characteristics” explained
GDP plays a crucial role and was instrumental in global development after World War II. But every country’s development path is different and a blind pursuit of GDP growth can have unintended consequences.
For China, the solution means long and arduous structural adjustments that will slow the economy as it transforms and eliminates excesses.
In 2014, China abandoned its hard GDP targets and ushered in the “new normal” with a soft target of “around” 7 percent for 2015. Actual growth for 2015 was 6.9 percent, the lowest in 25 years, prompting some Western analysts to express serious doubts about the “China miracle.”
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China’s Communist Party ends political session amid growing uncertainty
China’s Communist Party ends political session amid growing uncertainty
The historical context is crucial for assessing China’s development: where the development came from, where it is going and how these factors interact.
To be clear, the American leadership also understands the importance of long-term development. But the political stakes of losing an election are enormous, and understandably the priority is on achieving short-term results in order to win one election every four-year cycle.
Despite the divergence between the US and China, the basic principle is the same: government for the people. It is appropriate to recall the words of Abraham Lincoln: “Government of the people, by the people, for the people.”
Edelman’s ranking is based on a survey and is not definitive, but it provides insight into the relative trustworthiness of corporate contracts in the United States and China.
Given the increasing multipolarity in the world and pressing global problems such as climate change and inequality, it is time for global institutions to rethink their assessment of the development model of China or other countries that do not fit into the US-led G7 model.
Lub Bun Chong is a partner at C Consultancy and Helios Strategic Advisors and author of Managing a Chinese Partner: Insights From Four Global Companies
