Ensuring and Improving Living Standards Through Development
The year 2018 marks the 40th anniversary of reform and opening-up in China. Over the past four decades, China has gone from being a large agrarian country to become a major manufacturing country, and from being a low-income country that found it difficult to meet the basic needs of the people to become an upper middle-income country with a comfortable standard of living. With this, the people's lives have undergone tremendous changes as over 700 million people have escaped poverty and over 300 million people have become established in the middle-income group. China, a nation in the East which is full of vitality and confidence, is moving closer to the world center stage. In summing up the past 40 years of development, one of the major feats has been ensuring and improving living standards through development.
I. The wellbeing of the people is the fundamental goal of development.
The Communist Party of China (CPC) is a ruling party dedicated to wholeheartedly serving the people, Chinese government is one that represents the interests of the broadest majority of the people, and Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era is underpinned by a people-centered notion of development. Bettering the lives of the people is not only a goal for every one of China's initiatives, but also the fundamental purpose of development. The achievements made in the past 40 years of reform and opening-up show that rapid growth in composite national strength and continuous improvements in the lives of the people have been instrumental in deciding the success or failure of our path and system.
There are more than 200 countries and economies in the world, and each follows its own path of development and puts into effect a different social system. However, the fundamental indicator when measuring the success of competing systems and paths in the end depends on their performance in ensuring and improving living standards. The path of Chinese socialism is the choice of the CPC, history, and the people; as has been proven through practice in China, it lines up with our national conditions, stage of development, and people's interests. The defining feature and basic aim of this path can be summarized in Xi Jinping's statement, "The people yearn for a better life, and our goal is to help them achieve it."
II. How we have been keeping up with people's ever-growing needs for a better life?
In China, over the past four decades, changes that have taken place in people's lives have been widespread and profound. First, tremendous changes have occurred regarding incomes and consumption. China was a shortage economy in the early years of reform and opening-up, most basic consumer goods were only supplied upon presenting coupons, and most people had difficulty meeting even their basic needs. Starting in the 1980s, people's incomes and consumption took a great step upward around every 10 years: in the 1980s, people's basic needs were met; in the 1990s, ownership of household appliances such as TV sets, refrigerators, washing machines, and air conditioners became widespread; in the first decade of the 21st century, families owning housing and automobiles became commonplace; and since 2010, there has been explosive growth in consumption in a range of emerging areas such as telecommunications, tourism, leisure, entertainment, fitness, and retirement communities.
Second, tremendous changes have occurredregarding education levels. In 1982, during the early years of reform and opening-up, illiteracy was as high as 24%. However, by 2016, the proportion of people aged 6 and over that had received or were receiving an education reached 94.3%, the extent of universal access to education exceeded that of upper-middle income countries, and average years of schooling reached 9.5 years. Further, the average length of schooling of new members of the labor force amounted to 13 years, and of particular note is that the gross enrollment rate for higher education increased rather rapidly, reaching 40%. Third, tremendous changes have occurred regarding employment and the employment structure. In 1978, during the early years of reform and opening-up, people living in rural areas accounted for 82% of the total population, or 790 million out of 960 million, and 70% of all people in employment, or 280 million out of 400 million; these statistics are typical of a large agrarian country.
In 2017, after almost 40 years of development via reform and opening-up, more than 57% of people resided in urban areas and 73% of all people in employment worked in the industrial and service sectors. In today's world where world economic growth is sluggish and most countries worry about climbing unemployment, China keeps its urban unemployment rate at around 5%. Fourth, tremendous changes have occurred regarding social security coverage. During the early years of reform and opening-up, only 20% of people in employment enjoyed social security. Currently, a multi-tiered social security system with universal coverage featuring a basic pension, basic medical care, and a subsistence allowance is nearing completion, which will bring to an end the thousand-year history during which China's rural dwellers did not have social security. Fifth, tremendous changes have occurred regarding public health. Public health, medical services, and hygiene have improved markedly, and life expectancy has increased from 67.8 years in 1981 to 76.5 years in 2016.
These changes in people's lives have also posed new challenges as well as new requirements on development. For example, people are more concerned about health, food, and environmental security. Whereas in the past people were only concerned with eating their fill and eating well, at present they want to eat organic and safe food. For another example, people are increasingly in favor of individualized, diverse, and high-quality consumer goods, and ordinary goods that are cheap, knockoffs, or mass produced cannot sufficiently satisfy consumer demand. For yet another example, people increasingly value their feelings about their lives, and want to enjoy senses of fulfillment, happiness, security, fairness, and satisfaction. All these new demand-side requirements necessitate structural reform and adjustment on the supply-side.
III. Economic development is the foundation that ensures and improves living standards.
Development is both the basis for and the key to solving every problem that China faces; it is the primary task in governing and rejuvenating the country and remains the absolute principle. However, the development needed in China today is well-balanced development which is guided by the new development philosophy based on innovation, coordination, sustainability, openness, and sharing. As such, while we need to avoid the extensive growth model of days past, we need to avoid falling into the "growth without development" trap even more.
In light of the need to ensure and improve living standards, development in today's China needs to focus on four areas. First, development must be geared toward a transition from high-speed to high-quality growth. This means a dedication to putting quality first, giving priority to performance, and having supply-side structural reform as a focus. This will drive economic growth that is of better quality and higher efficiency. Second, development must be geared toward new changes in daily consumption patterns via restructuring production and growing the economy. This means devoting energy to meeting the people's new needs for a better life, providing them with consumer goods which are comprehensive, diverse, and that satisfy multiple levels of demand, and above all adapting to the rapid growth in consumption of middle-income and elderly consumers.
Third, development must be geared toward resolving new structural shortages in a buyer's market with abundant goods. These new structural shortages frequently occur in the provision of public goods and services. As it is hard to solely rely on the market to make up for these shortages, we need supporting social policies for the provision of blue skies, clean air and water, and housing for the low-income group. Fourth, improvements in living standards must be proportionate to our level of economic development. We must do our best according to our capabilities, and not give the people false hopes. We need to prevent welfare populism manipulating public opinion, call for hard work and plain living, and pursue public contribution, joint participation, and common interests.
IV. Ensuring and improving living standards requires both providing basic guarantees and making up for shortcomings.
China is still in the primary stage of socialism. In this stage of development, resolving problems related to public wellbeing requires both providing basic guarantees and making up for shortcomings, with priority given to the former. In resolving these problems, we need to focus on key issues, problems of general concern, and major difficulties, with an emphasis on helping those in need rather than making unnecessary improvements.
Providing basic guarantees mainly touches upon the following six key areas of people's lives. First, regarding incomes and consumption, we need to ensure people's incomes rise in step with the growth of the economy, work remuneration increases in step with progress in labor productivity, and strive to realize fair and just income distribution. Second, regarding education, we must give it priority and speed up its modernization. In particular, we need to promote the coordinated development of compulsory education in urban and rural areas and make great efforts to improve the educational level of youth in rural areas, thus spurring the formation of a new demographic dividend. We also need to reform the education system in a way that is suited to changes that arise from scientific and technological innovations and the job market, improve professional and vocational education, and further increase the gross enrollment rate of higher education.
Third, regarding employment, we need to give high priority to employment and pursue a proactive employment policy, strive to achieve fuller employment and create better quality jobs, and remove institutional barriers that block the social mobility of labor and talent. In particular, we need to resolve issues such as finding employment for young people made up mostly by university graduates, for rural laborers entering cities, and resettling workers laid-off due to the scaling-down of enterprises. Fourth, regarding social security, we need to establish a sustainable multi-tiered system that covers the entire population in both urban and rural areas, and has clearly defined rights and responsibilities and support that hits the right level. We will work to see that everyone has access to social security. In response to rapid population aging in particular, we need to bring pension schemes under national unified management as soon as possible, and improve the unified systems of basic medical insurance and serious disease insurance for rural and non-working urban residents. We will step up our efforts to put in place a housing system that ensures supply through multiple sources, provides housing support through multiple channels, and encourages housing for both purchase and rental.
Fifth, regarding people's health, we will improve the national health policy, further reform of the medicine and healthcare system, and develop a sound modern hospital management system, thus providing more effective and convenient medical and health services to the public. Sixth, regarding public security, we will establish a social governance model based on public contribution, joint participation, and common interests. We will strengthen public participation and rule of law in social governance, and make such governance smarter and more specialized. We will improve mechanisms for preventing and defusing social tensions and see that the government's governance efforts on the one hand and society's self-regulation and residents' self-governance on the other reinforce each other.
Making up for shortcomings entails resolving prominent issues which people have in their lives and which require a dedicated campaign to resolve or which the public has voiced strong concern over. These issues include poverty, air pollution, and housing prices. First, we must address shortcomings in issues related to poverty. In our efforts to become a moderately prosperous society, poverty is the biggest shortcoming. We must make a successful effort in targeted poverty alleviation so as to ensure that by the year 2020, all rural residents living below the current poverty line will have been lifted out of poverty.
Second, we must address shortcomings related to environmental governance. Today, China has demonstrated unprecedented determination, commitment, and outcomes in environmental governance. We need to be steadfast in promoting green development, work hard to address outstanding environmental problems, take tough steps in our campaign to prevent and control pollution, succeed in making our skies blue again, and strive to fundamentally reverse the trend of environmental degradation as early as possible. Third, we must address the shortcoming that our middle-income group is relatively small. The income gap in China is still too large, and the task of promoting social fairness and justice is formidable. Fostering and expanding the middle-income group will help us meet the essential requirements of Chinese socialism, promote sustained growth under the new economic normal, and maintain social harmony and stability.
Fourth, we must address the shortcoming in housing affordability which the public has voiced strong concern over. We must not forget that housing is for living in, not for speculation. We need to gradually deflate the real estate bubble, cautiously and prudently address the issues of housing prices and housing access, and establish a long-term and effective mechanism for housing supply.
(Li Peilin is Vice President of the Chinese Academy of Social Sciences.)