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Friday, December 30, 2005

Measuring Progress in China: Going Beyond GDP Growth

GDP is not a perfect measure of a nation's well-being (see Measuring Well-Being). Chinese economist Hu Angang suggests broadening the definition of progress used to assess provincial development. By changing the evaluation of progress to include factors such as social security, environmental conditions, employment, and public services, he hopes to avoid the pursuit of economic growth at the expense of other important goals:

Economist warns of excessive growth, China View:  Beijing, Dec. 30 (Xinhuanet) -- Chinese economist Hu Angang suggested in one of his reports to be submitted to the central government that ... [t]he value of the gross domestic product (GDP) or its growth rate should not be used to evaluate the performance of local governments below the provincial level... As a substitute, Hu stressed public services, social administration and market supervision be taken as new standards to evaluate their performance. ... But provincial governments and the central government should still have their GDP statistics, Hu said in his report.

Hu, an expert on macroeconomics at China's prestigious Qinghua University in Beijing, ... [said] China targets to double its per capita GDP in 2010 from that of 2000, which means an annual GDP growth rare of 7.2 percent is enough for the country to realize the goal. But a large number of Chinese provincial governments have set their economic growth targets higher than 8 percent for the next five years, and lower governments have set their economic growth rates even higher. This will surely result in excessive economic growth at the expense of the environment and resources, said Hu.

Hu urges local governments to develop their local economies in a rational and scientific way in the next five-year period (2006-2010). In his report, the economist lists 30 obligatory indexes to evaluate the government's performance, including employment, energy consumption, control of environmental pollution, transfer of rural labor force, law and order situation, and coverage of social security. "All these indexes reflect the basic obligations of the government in managing society and offering services to the public under the market economy," said Hu...

    Posted by on Friday, December 30, 2005 at 09:49 AM in China, Economics | Permalink  TrackBack (0)  Comments (13)

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