China's Peaceful Rise: Speeches of Zheng Bijian 1997-2005

China's Development and New Path to a Peaceful Rise

China’s Development and New Path to a Peaceful Rise Villa d’Este Forum, September 2004 China’s rapid development in recent years has attracted wide attention, and its rise has become a hot topic in the international community. The key issue is how to perceive China’s future development in the first half of the twenty-first century. Here, I would like to share my observations on the following topics: how to perceive China’s achievements in development; and how to perceive China’s path of development in the first half of the twenty-first century. To illustrate China’s development achievements over the past twenty-five years, I offer some statistics. China adopted its policy of reform and opening up in 1978. Since that time, it has been one of the most rapidly growing economies in the world, as evidenced by an average annual gross domestic product (GDP) growth rate of 9.4 percent. In 1978 China accounted for less than 1 percent of the world economy; that share has now grown to 4 percent. In 1978 China’s total external trade volume stood at $20.6 billion; last year it was forty times larger, at $851.2 billion, and ranked third in the world. A dozen years ago China had barely entered the age of modern telecommunications services. Now, it has 296 million mobile phone subscribers, more than any other country in the world. And as of June this year, 87 million people had access to the Internet and 36.3 million computers were connected to the web. These figures demonstrate that China 37 9725-7 zheng txt 8/18/05 10:59 AM Page 37 has made solid progress in economic and overall national strength in the past quarter of a century. However, economic growth alone cannot tell the full story. At the annual session of the Bo’ao Forum for Asia held in Hainan, China, last year, I cited two simple mathematic propositions that illustrate the implications of China’s basic national condition—a big population of 1.3 billion. Any small difficulty in economic and social development multiplied by 1.3 billion swells into a huge problem. And any amount of financial and material resources, however large, divided by 1.3 billion, shrinks to a tiny handful in per capita terms. Without a doubt, in aggregate terms China is an economic power whose rapid growth is felt by the whole world. Yet China’s economy in 2003 was just one-seventh the size of the U.S. economy and one-third the size of Japan’s. In per capita terms, China is still a low-income developing country, ranking below onehundredth in the world. Our impact on the world economy is limited, after all. Therefore, in the final analysis, all of our efforts to resolve problems of development focus on bettering the lives of our 1.3 billion—or even 1.5 billion—people, and creating an increasingly more prosperous and civilized environment, suitable for their comprehensive development. This work alone will keep several generations of the Chinese people quite busy. At present, the international community is very concerned about China’s“overheating economy.”It is my view that while the economy on the whole is sound, its structure has yet to be rationalized . Serious problems in agriculture, energy, the environment , and investment are cropping up in the course of development. Therefore, since the middle of last year, the Chinese government has adopted a series of macroeconomic control 38 China’s Peaceful Rise 9725-7 zheng txt 8/18/05 10:59 AM Page 38 measures to address questions of structure, system, and the growth model. Macroeconomic control has yielded initial results, and grain production has taken a sharp turn for the better. Furthermore , the macroeconomic policy environment is becoming increasingly relaxed. And it is important to note that despite macroeconomic control, China’s economy will still grow by 8 to 9 percent this year—yet another indication of its great potential. On the question of how to perceive China’s path of development in the first half of the twenty-first century, I have several points to make. First, China’s path to a peaceful rise refers to its path toward socialist modernization. This journey will span seventy years, from the end of the 1970s, when the Third Plenum of the Eleventh Congress of the Chinese Communist Party adopted the policy...