The Boao Forum symbolizes China's rise
- By John Ross
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E-mail China.org.cn, March 24, 2016
China is now also about to transform the situation of the world's high income economies. China achieving its annual 6.5% GDP growth target in the new 13th Five Year Plan will not only attain its domestically defined goal of "moderate prosperity," but bring it to the threshold of World Bank criteria for a "high income" economy. In the latest World Bank data, the combined population of all high income economies is 1.399 billion while China's population is 1.364 billion. China achieving the "high income" status will double the population of those living in such countries. Nothing remotely matching such economic achievements has come from developing countries following the "Western model".
Professor Dale Jorgenson of Harvard University, the world's leading authority on measuring economic growth, has recently summarized the situation, saying, "The emergence of Asia… is the great economic achievement of our time. This has created a new model for economic growth."
The truth was the exact opposite of Krugman's prediction in the period preceding the Boao Forum's launch. China and Asia did not "miss out" by not following the "Western model." The rest of the world needed to learn from China and Asia and the Boao Forum's growing impact reflects this.
For many years, China internationally followed a policy described as "hide brightness, cherish obscurity". China had valid reasons for this approach, but it had some undesirable side effects. International attempts to downplay China's achievements, whether in Krugman's sophisticated form, or the semi-nonsensical genre symbolized by Gordon Chang's book The Coming Collapse of China were given unmerited intellectual space. This has some negative current consequences in giving an excessive long term base for attempts to claim that China will not hit growth targets and have a "hard landing."
Even as overwhelming factual evidence of China's economic success has accumulated, some in the West have attempted to retain one final economic conceit, which is the claim articulated by Krugman that the West has superiority in "economic thinking." Apparently, China's success occurred "by accident" or "despite bad economic ideas," all despite the fact that for anyone seriously thinking about it, the idea that the fastest economic development in human history can be achieved by "accident" is laughable.
Considering President Xi Jinping's recent reiteration that the originality of China's economic ideas was made primarily to deal with domestic issues, it also plays an important role globally. In a May 2014 Politburo study session he pointed out that China's economic combination of the "visible hand" with the "invisible hand," unlike the West's exclusive reliance on the "invisible hand." In November 2015, Xi restated that Marxism underlays China's economic philosophy, which is evidently not a position in the West. At this year's Chinese People's Political Consultative Conference, Xi restated that in China public ownership plays a dominant role with diverse forms of ownership developing side by side - sharply differentiating China from both the former USSR and the West.
China's economic ideas are certainly highly "practical," in the sense of solving practical issues, but not "pragmatic" in the sense of not being guided by underlying economic theory. The facts confirm that by pursuing its own economic model, China not only outperformed but "out thought" the West.
For most Western economic strategists, accepting the fact that Marxism is the underlying philosophy of China's economic success is certainly too advanced. Bu
t the real global development of economic thinking was well described by Justin Yifu Lin, China's former World Bank Senior Vice-President. He said that from Adam Smith up to the year 1930, most master-economists were British or foreigners working in the UK. This trend changed during the 1930s, when the United States started to become home to great economists. Lin believed that only when an economist lives in an important economy can he or she have a good command of real social and economic variables key to better illustrate the cause and result relationship. He said that it is inevitable, then, that the research center of economics will move eastward to China.
The Boao Forum's development is part of this shift of the center of gravity, not only of economic performance but economic thinking, to China.
The writer is a columnist with China.org.cn. For more information please visit:
http://www.china.org.cn/opinion/johnross.htm
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