Friday, August 20, 2010

China downplays economic advances

China downplays economic advances
By Barbara Demick
Los Angeles Times, August 20, 2010

As China becomes the world's second-largest economy, officials are trumpeting the nation's problems, especially rural poverty. It's a mix of shrewd tactics and ingrained humility.

Reporting from Beijing
Who me, rich and powerful? China's official reaction this week to its latest milestone — surpassing Japan to become the world's second-largest economy — has been more modest than boastful.

Rather than flaunting its newfound status, China, the world's most populous nation but still roughly 100th in per capita income, is going through contortions to show that it really isn't that successful at all.

Since Monday, when Japan released economic data showing that its gross domestic product for the second quarter had slipped behind China's, Beijing has been trumpeting its shortcomings. In news conferences, on talk shows and in editorial pages, commentators have hastened to pooh-pooh the statistics, saying they are wrong, misleading or meaningless. They compare China not to Japan or the United States, but to Albania; both have annual per capita income of about $3,600.

This has not been a time for the Communist Party to boast about the fact that under its leadership, China has chalked up annual growth rates averaging 9% for the last two decades.

"There is little celebration in this land," sniffed the English-language China Daily in an editorial Thursday. "We have no time to be intoxicated by big numbers."

At a briefing Tuesday in Beijing, a Foreign Ministry official, Zhu Honghai, gave a lengthy enumeration of China's weaknesses: rural poverty, social disparities and low levels of investment in education, medical care and social security. Commerce Ministry spokesman Yao Jian advised reporters that "there are 150 million people who can't even reach the standard of $1 per day.... That's a fact about China."

On the talk show "Today Observed" on CCTV, economists chatted about why Chinese shouldn't be happy about overtaking Japan, while a flashing headline accused the foreign news media of "trying to flatter China to death."

A strange turn of phrase in a country where the foreign news media is often accused of "China bashing."

What, beyond truthfulness, is behind all the self-deprecation?

"China has played the underdog and victim for a long time and they're used to that role," suggested Patrick Chovanec, an associate professor at Tsinghua University's School of Economics and Management in Beijing. "There is an adolescent quality of not being comfortable with what you're becoming."

By insisting that it is still a "poor, developing nation," a phrase Beijing officials often repeat like a mantra, China is also able to beg off demands in negotiations over issues varying from climate change to trade balance.

"You have this strange contradiction. China is proud of what it has accomplished and wants to be a power, if not a superpower, but it feels if it is no longer seen as a developing country that would harm its interests," Chovanec said.

To some extent, China's expressions of humility might be a cultural reflex.

"As Chinese, we do things differently from the West. We are used to keeping a low profile and not bragging about any single achievement," said Zhang Yansheng, an economist at the National Development and Reform Commission. "And this is a country with such a long history that we know, no matter how much you achieve you might lose it."

Zhang points to the example of Japan, which in the mid-1990s enjoyed a per capita income well above that of the United States, but has since slipped behind.

The Japanese Cabinet reported Monday a second-quarter gross domestic product of $1.29 trillion, dropping behind China's $1.34 trillion in the world rankings (although China's per capita income remains one-tenth that of Japan's). Economists had anticipated China would overtake Japan sometime this year, with 2030 often mentioned as the year the Chinese economy is likely to move ahead of the United States'.

Some Chinese analysts believe that it was the spate of natural disasters — and the money poured into relief and rebuilding — that allowed China to move up the statistic ladder.

"The Chinese are not in high spirits at the moment," said Shi Yinhong, a professor of international relations at Beijing's People's University. "We feel that we still face so many difficulties and that we have not a friend in the world."

Times staff writer David Pierson and researchers Tommy Yang and Nicole Liu in The Times' Beijing Bureau contributed to this report.

Copyright © 2010, Los Angeles Times

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