MUTUAL PROSPERITY



COVER STORY

MUTUAL PROSPERITY

China’s national interests coincide with humanity’s By John Ross

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

Without China’s growth，the global economic situation following the international financial crisis would have been far worse

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

The speech， therefore， was an extended analysis of the reality that China’s development constitutes， to use a popular phrase， a “win-win”for itself and the globe.

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... China has achieved in a few years a development process that took other countries hundreds of years to achieve.”

But to accomplish this， China had to deal not only with domestic policy issues， but also actively promote global stability and peaceful development in particular. “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，” Xi said.

Therefore， China’s interest in the construction of a more rational and just international order， and its increasing interrelationship with other countries， reflect humanity’s common interests， not just China’s national interests.

It is worth examining the internal coherence of China’s approach as outlined in Xi’s speech. In particular， it is valuable to contrast it with alternative concepts based on the 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 U.S. neo-conservatives， that China’s rise is a threat.

Domestically， Xi was not exaggerating when he stated that China’s achievements are unprecedented. It is important to establish this objective fact.

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.

Over the same period， China’s annual average 8-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 the World Bank’s reckoning， China has been responsible for 83 percent of global poverty reduction over the last 35 years.

Now， if the first part of Xi’s analysis， concerning 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. It is well known that since this began， global growth has been weak， a key focus of the G20 Summit. In the period of 2007-15， the annual average global per-capita GDP growth was only 1 percent； in advanced economies，it was merely 0.3 percent.

However， the world economy is interconnected. The strength or weakness in one region transmits itself to others. Without China’s growth， the global economic situation following the international financial crisis would have been far worse.

Measured in current exchange rates， China contributed 46.3 percent of world GDP growth between 2007 and 2015， while the United States contributed 21.9 percent. Measured in internationally comparable prices—purchasing power parity （PPP）—China accounted for 29.4 percent of world growth over the same period，compared to 9.7 percent by the United States. 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 for 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. Fortunately， in economics， one plus one is greater 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 the international division of labor， and other countries equally benefit from their interaction with China. For this to work， however， peace is needed.

Xi’s speech and its intrinsic message of“win-win” therefore involved far more than mere “warm words.” It was in fact a precise expression of the idea that China’s interests and those of the rest of the world fundamentally coincide. ■

The article， which was originally published at China.org.cn，

has been edited for space

Copyedited by Dominic James Madar

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