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John Ross: G20 - Xi shows China`s national interests coincide with humanity`s

2016-09-04

By John Ross    Source: China.org.cn    Published: 2016-9-4


As China is this year`s G20 summit host, President Xi Jinping`s speech to its prelude, the B20 business leaders meeting, stressed both the fact that China`s achievements for its own people are historically unprecedented, and that these benefitted not only China but also the world at large.


The speech, therefore, was an extended analysis of the reality often expressed in the short phrase that China`s development constitutes a "win-win" for itself and the world.


First summarizing China`s achievements for its own people, he noted: "There has been no precedent in human history for a country with a population of over 1.3 billion to realize modernization. Since its reform and opening up, China has lifted more than 700 million people out of poverty, the living standards and quality of life of more than 1.3 billion people have improved significantly, China has achieved in a few years a development process that took other countries hundreds of years to achieve." These were, he said, historically unprecedented achievements of "socialism with Chinese characteristics."


But to accomplish this, China necessarily had to deal not only with domestic policy issues but also actively promote global stability -- in particular peaceful development. "History has repeatedly proved that without peace there can be no development and without stability there is no prosperity. This is closely related to the security of states, as no state can avoid the consequences of instability and no country can conquer the world."


China`s interest in the construction of a more rational and just international order, and its increasing interrelationship with other countries, therefore, reflect humanity`s common interests not just China`s national interests. "We pursue an independent foreign policy of peace, adhering to the basic state policy of opening up …. and actively promote the construction of a more just and rational international order. China`s interaction with the outside world will continue to deepen."


The practical conclusion the president drew was that the G20, encompassing countries accounting for 85 percent of world GDP, should deal not only with short term, but also longer strategic objectives:


"One of the goals of China`s G20 presidency is to enable the organization to transform itself from a crisis-response mechanism focusing on short-term policies to one of long-term governance that shapes medium- to long-term policies, and so become the premier forum for international economic advancement."


Naturally, as the summit host, President Xi did not engage in a confrontation with concepts being advanced by others; however, as analysts have more freedom than presidents, it is worth examining the internal coherence of China`s approach as outlined in this speech. In particular it is valuable to contrast it with the alternative concepts based on a premise that international relations are a "zero sum game," in which one country`s gain is necessarily another`s loss, or the view projected particularly by American neo-conservatives that China`s rise is a threat.


Domestically, President Xi was not exaggerating when stating China`s achievements are unprecedented. This is simply an objective fact, important to establish as will be discussed shortly. The main economic and social parameters may be taken as follows:


Economists regard life expectancy as the most sensitive indicator of overall human and social conditions, as it simultaneously balances all positive factors such as rising incomes, good health care, and environmental protection against negative ones such as poverty, poor health care, pollution etc. By this measure, China`s life expectancy increased by 32 years in a 29-year period (1949-78) -- the fastest ever achieved by a major country.


From 1978-2015 China`s annual average per capita GDP growth of 8.6 percent was the fastest achieved by a major economy over such a prolonged period.


From 1978-2015 China`s annual average eight percent increase in consumption, the foundation of living standards, was also the fastest.


Since 1981, based on World Bank statistics, China has managed to lift 728 million people out of poverty, compared to the 152 million achieved by the rest of the world. Thus, by World Bank reckoning, China was responsible for 83 percent of the reduction of the number of those living in poverty in the world.


This is the reality that those who wish to pursue not cooperation but confrontation with China seek to downplay.


Now, if the first part of President Xi`s analysis, of the benefits of China`s achievements for its own people, is clearly justified, what do we make of the consequences for the rest of the world?


The immediate starting point may be taken as the international financial crisis. Since this began it is well known that global growth has been weak, a key focus of the G20 summit. In the period 2007-15, annual average world per capita GDP growth was only one percent; in the advanced economies, it was only 0.3 percent.


However, the world economy is interconnected. The strength or weakness in one part transmits itself to others. Without China`s growth the situation the global economy confronted due to the advent of the international financial crisis would have been far worse.


Measured in current exchange rates, China contributed 46.3 percent of world GDP growth, while the United States contributed 21.9 percent. Measured in internationally comparable prices, purchasing power parity (PPP), China`s accounted for 29.4 percent of world growth and the United States 9.7 percent. China contributed almost half of the world growth measured at current exchange rates and only slightly under one-third using the PPP measurement.


Yet, there is an even more fundamental reason China`s interests are inseparable from those of the rest of the world. Since Adam Smith founded modern economics it has been known that the division of labor, which, in a modern globalized economy, must include the international division of labor, is the most powerful force raising productivity.


This is why economic development is not "zero sum" after all. Each country, by participating in the international division of labor, benefits more than if it sought to develop alone. In economics, fortunately, one plus one is more than two. The very term "reform and opening up" describing China`s policies since 1978 expresses the understanding that China can only develop successfully by participating in any international division of labor, and other countries equally benefit from their interaction with China. For this to work, however, needs peace.


President Xi`s speech, its basic conception of "win-win," therefore involved no mere "warm words." They were, in fact, a precise expression of the idea that China`s and the rest of the world`s fundamental interests coincide.


It is therefore to be hoped that the G20 summit will undertake work that flows from this basic concept.


The author is a senior fellow of Chongyang Institute for Financial Studies at Renmin University of China.

Key Words: China   economic growth   development  

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