China puts GDP target on history's ash pit
The ruling party abandons the material growth standard of gross domestic product. Now, like many nations, it struggles to define progress in alternative ways.
In a speech just a few years ago, China’s leader Xi Jinping said economic growth was the “central task” of the ruling Communist Party. Because “matter determines consciousness,” he claimed, the party’s primary task is material progress. “We should oppose metaphysical ways of thinking,” he added.
Last Friday, the party announced it had abandoned the main yardstick for economic growth, gross domestic product. Since the 1980s, this annual tally of the value of goods and services had been China’s lodestar for success and the party’s justification for its grip on power. Mr. Xi had even promised to double GDP from a decade earlier by this July, the centennial of the party’s founding.
Why the sudden shift from chasing a single statistic?
The pandemic has humbled China’s expectations of measuring progress by material standards. In the first quarter, the GDP fell for the first time in decades. It could stay low for some time with the disruption of China’s relations with the rest of the world.
In announcing the change, Li Keqiang, China’s premier, explained that low growth was a price worth paying because, as he said in almost metaphysical terms, “life is invaluable.”
Mr. Li said China will shift to other goals, which he defined broadly as stability and security. Those include qualitative improvements such as making cities more enjoyable to live and work. “We will organize rich intellectual and cultural activities for our people,” Mr. Li said. “With these endeavors, our people will be full of vitality and striving to pursue excellence and moral integrity.”
China now joins a number of countries and economists in questioning the main measure of progress and prosperity. The GDP standard – which was invented in the 1930s by an American economist as a tool but not a goal – is giving way to alternative ideas about tracking the well-being of individuals and society.
“The quality of economic growth means more than it ever has for China and for the world,” Stephen Roach, a senior fellow at Yale University, was quoted by the Chinese state news service Xinhua.
China has plenty of alternative models from around the world for judging progress. One is the Social Progress Index, the work of Harvard University business Professor Michael Porter. It tracks 54 indicators from personal rights to personal safety.
In a new book titled “Humankind,” Dutch historian Rutger Bregman makes a case against the view of humans as “homo economicus.” That does not fit the history of humanity as sociable and decent. He argues against economic targets based simply on the notion of people as selfish beings.
Progress itself may be immeasurable. For many, its source lies in infinite and intangible ideas. He Huaihong, a philosopher at Peking University, writes that leaders who “aim only to acquire greater material wealth will never have spiritual power.”
Beijing’s step away from a reliance on GDP may be a step toward redefining power in China. At the least, recognition is growing that a narrow, material view of life cannot sustain an individual or society.