Before and After Hu: Is China Better Off Than It Was Ten Years Ago?
For the first time since 1992, the United States’ and China’s political calendars are syncing up, with presidential elections in the former and a leadership transition in the latter. But unlike in the United States, where Mitt Romney would have had to defeat President Barack Obama in a national election to win the White House, Xi Jinping, who is expected to take office as China’s next president this month, will not face an open contest against the incumbent, Hu Jintao. If the Chinese people were allowed such a choice, however, they would likely ask the perennial question of U.S. presidential elections since the time of Ronald Reagan, albeit in a slightly modified form: Are you better off now than you were ten years ago?
Despite all that is made of China’s spectacular rise, the numbers show that many people in China would likely answer no. As Hu prepares to leave office, China is prosperous but staggeringly unequal, and strong but profoundly insecure. Indeed, in recent years, China has experienced intensifying clashes between bottom-up demands for social equality, individual freedoms, and environmental stewardship and the Chinese Communist Party’s aggressive defense of the status quo. On the whole, Hu and his premier, Wen Jiabao, are handing the new Xi administration an economic legacy that is far from stellar and a society that is shakier than the one they inherited. More important, they are leaving behind a political environment that is likely more corrupt and stifling than the relatively entrepreneurial and liberal era of the 1990s. This is in part because the government’s role in the economy grew, which meant that those who possessed political power could translate it into financial gain. Meanwhile, those lacking political connections — the vast majority of Chinese — saw their economic opportunities shrink as money flowed toward the political classes.
IT’S NOT CHINESE CALCULUS
One obvious metric to assess the performance of Hu and Wen is economic growth — and grow China did, from a GDP of $1.5 trillion in 2002 to $7.3 trillion in 2011, while maintaining an average GDP growth rate of ten percent. As the economic pie expanded, overall income surged, with average annual earnings among urbanites increasing from $1,000 in 2002 to $3,500 in 2011. Rural residents saw their incomes rise even more sharply, but given that their earnings averaged a meager $300 in 2002, they had nowhere to go but up.
It is no coincidence that over the same period, China’s exports boomed as industrialization of a monumental scale took place and manufacturing provided income to hundreds of millions of workers who left the farm for higher earnings in the city. Although China’s decade of hyper-industrialization followed its entry into the World Trade Organization in 2001 — the year before the current regime came to power — the Hu administration played an important part in the story. By standing fully behind the broad political consensus on the “growth imperative” and championing a liberal trade regime, Hu and his associates consistently helped China achieve growth rates that were the envy of emerging markets.