China: Now to 2100

China’s entry on the world stage has been dramatic. All eyes turn to it. And well they should. How China goes, so goes the world. China is moving rapidly from an agrarian to an industrial society, with hopes of joining the digital and information society–and capturing the industrial base along the way. I have deep reservations on whether its goals are achievable. China’s attempt to meet them has profound implications for all of us.

To understand what is happening, we must look not only at its short-term strategy but also at its long-term goals. To this end, each year China publishes “China’s Modernization Report.” A good but awkward translated summary of China’s approach can be found here. The Chinese Academy of Sciences(CAS) prepared this summary and was instrumental in the preparations of all the reports.

Note: I make extensive use of the 2005 report.

For an entry page to all the reports—with the exception of the 2007 report, go here.

An elaborate theory of how to modernize underpins China’s timetables and goals, the birth of which began with Walter Rostow of the Johnson administration [classical theory of modernization]. Classical theory describes the appropriate path from an agrarian to an industrial society.

The classical theory has since been extended, modified, and developed by other theoreticians, most notably Professor He Chuanqi, of China. It is called the “Comprehensive Economic and Modernization Theory, describing the path from an industrial to post-industrial society, a society based on information and knowledge.

Each year, China carefully measures its progress against 131 countries, each of which is in a different state of development. For China, modernization is a competition, replete with charts, indices, and other measurements in a wide variety of areas. We are all in a race, an important point to make. China’s challenge is not military in scope, but profoundly economic. To think otherwise, is to make a serious mistake.

For China, modernization is a science. Because it is a science, operating on laws similar to physics, there is a path that of necessity must be followed. I have a couple of reservations here:

  1. Modernization theoreticians deal primarily with the past, how particular countries succeeded, etc. The past may not be prologue of what is to come. More importantly, how countries developed in the past may be no longer applicable or even possible given the facts of global warming, resource depletion, population growth, and pollution. Should China develop as the U.S. and England did in the early 19th and 20th centuries, replete with pollution and smoke stacks? We all remember the Victorian industrial horrors Dickens described. If I were China, I would try to leapfrog into 21st century technology. But clearly, China has chosen the old—and very dangerous—path.
  2. While the information and digital revolution will quicken, of necessity another revolution may be coming into play: Sustainable development, which may require China to think carefully about its concept of perpetual growth.
  3. China accepts the principles of globalization. I have deep reservations that the principles of the WTO can be sustained in the face of global warming and resource depletion. Something is going to give. And it will not be nature.

Resource depletion needs further elaboration. I speak here not only of depletion of material resources—oil, water, some metals, etc—but also of biological resources connected with food. Bioengineering is in its infancy, a revolution in itself. As we deplete the natural environment of its life—fish, for example—and as we struggle to make plant and animal life more amenable to our growing needs, we are using the principles of privatization to embark on a very dangerous bio-genetic path: neutered salmon, seedless seeds, pigs with the hides of cows, chickens with no brooding instinct, etc. Are we prepared to completely refashion the natural world precisely at the time when are facing monumental challenges? I leave it at that. What path will China take in terms of resource depletion?

To return to the topic at hand: China’s goals. Below are some of the mile markers it intends to achieve:

2020: Mature industrialization, complete the transition from undeveloped to developed country. By this time, China will be the world’s factory.

2030: Begin transition from industrial to post-industrial, i.e., knowledge and digital based economy.

2040: Start-up period for post-industrial.

2050: Developing period for post-industrial. Should be among top 40 countries in the world. Eighty per cent urbanization will be complete. In short, 500 million rural people will be moved into industrial cities. Everyone will have access to social services.

If all the tasks above are all-roundly fulfilled, Chinese society will become a moderate developed society by 2050. Its average life expectancy will exceed 80 years old; the penetration rate of university, and the rate of urbanization and informatization will exceed 80%; the coverage rate of pension insurance, medical insurance and unemployment insurance will reach 100%; the free and rational flows of people will be realized, and the rate of tourist going abroad will exceed 50%; the minimum month wage will exceed US$1,300 (in 2002 dollars), and the proportions of absolute poverty (incidence of international high poverty and medium poverty) and child labor will be reduced down to zero…

2080: Fully developed country.

2100: “Frontier” country, ranked among the top 10 countries.

Look carefully at the goals for 2050. According to one commentary, China must continue its 9% GDP growth to meet these objectives. China has the metal to the pedal; continued rapid growth is part of the plan. The commentary continues:

He Chuanqi, who headed the research team, told local reporters that China’s economic situation is 100 years behind the U.S. and there is only a 6 per cent chance of his forecasts being realized.

There is a six per cent chance of minimum wage being $1,300/month, $15,600/year, $7.50/hour—all measured in 2002 dollars? What about inflation? What should our minimum wage be by then? For those who think that globalization a la China will raise all wages—including U.S. wages—think again. All boats are not going up here. We have the classic “race to the bottom.”

Because of social services, no one, the report contends, will have to depend on minimum wage.

Certainly, by 2050, U.S. social services will be in a nosedive. Have modernization theoreticians accounted for the collapse of our social net? I don’t think so. Is this part of modernization theory? China considers the U.S. to be the top “frontier” nation, the nation against whom all others are measured; the one China wants to be by 2100. Well, we are in trouble.

We are the advance guard of the digital revolution, the knowledge revolution, and de-industrialization. But globalization and de-industrialization have pushed us—as it will China—into strange waters. Our safety net is now imperiled. Wealth disparity here is increasing. Does modernization theory account for this as well? I don’t think so. If China follows our path, it has a rude awakening.

China’s theoreticians are no different from our own: Both see globalization as practiced as a desirable path. Each has used past history as a description of how to proceed. What neither sees is that another path is needed. In the 21st century we are faced with problems never before encountered, problems that demand unique solutions.

Another commentary starts to describe the problem:

Though its author insisted on this possibility, the public did not buy it, citing the country’s widening wealth gap.
This time [the 2007 report], the experts who compiled the report, have been much wiser to tap into the public’s growing worries about the country’s deteriorating environment and regional disparity.

Ahead, lies global warming, environmental pollution, and depletion of resources. The world is pursuing globalization in a fashion that does nothing but accelerate our coming problems. Privatization of everything under the sun, from genetic codes to rainwater, is not a solution.

In my opinion, China has no chance whatsoever of successfully completing its present course. Set aside for a moment whether a country can continue 9% growth for 40 years. Set aside for a moment whether a country of China’s size can properly balance its urban and agrarian societies; whether it can move “500 million rural home dwellers into cities”; whether it can then move “600 million city dwellers into suburbia.”

Set aside for a moment the impact that China’s vast, impoverished labor market will have on the rest of the world. By 2050, China wants cars for half its population. Ask only: Has China properly accounted for global warming, environmental decay, and depletion of resources? I don’t think so.

In my next piece, I will consider one small facet of China’s challenge: the glaciers that feed its rivers.

Addendum–Breaking News According to Fatih Birol,IEA chief economist, China will surpass the U.S. in CO2 emission in 2007. Previously, no one thought China would garner this dubious distinction until 2010. It is imperative that China develop properly and successfully. (Hat tip to Movie Guy.)