The China Dream and the China Path 8770_9789814472661_tp.indd 1 27/8/13 12:13 PM Series on Chinese Economics Research (ISSN: 2251-1644) Series Editors: Yang Mu (Lee Kuan Yew School of Public Policies, NUS) Fan Gang (Peking University, China) Published: Vol. 1: China’s State-Owned Enterprises: Nature, Performance and Reform by Sheng Hong and Zhao Nong Vol. 2: Food Security and Farm Land Protection in China by Mao Yushi, Zhao Nong and Yang Xiaojing Vol. 3: The Micro-Analysis of Regional Economy in China: A Perspective of Firm Relocation by Wei Houkai, Wang Yeqiang and Bai Mei Vol. 4: The China Dream and the China Path by Zhou Tianyong Series on Chinese Economics Research – Vol. 4 The China Dream and the China Path Zhou Tianyong Party School of the Central Committee of Communist Party of China, China World Scientific 8770_9789814472661_tp.indd 2 27/8/13 12:13 PM Published by World Scientific Publishing Co. Pte. Ltd. 5 Toh Tuck Link, Singapore 596224 USA office: 27 Warren Street, Suite 401-402, Hackensack, NJ 07601 UK office: 57 Shelton Street, Covent Garden, London WC2H 9HE Library of Congress Cataloging-in-Publication Data Zhou, Tianyong, 1958– [Zhongguo meng yu Zhongguo dao lu. English] The China dream and the China path / Zhou Tianyong, Party School of the Central Committee of Communist Party of China, China. pages cm. -- (Series on Chinese economics research, ISSN 2251-1644 ; vol. 4) Translation of Zhongguo meng yu Zhongguo dao lu. Includes bibliographical references. ISBN 978-9814472661 1. China--Economic policy--2000– 2. China--Economic conditions--2000– I. Title. HC427.95.Z467313 2014 330.951--dc23 2013031942 British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library. Originally published in Chinese by Social Sciences Academic Press (China). Copyright © 2011 Social Sciences Academic Press (China). China Book International provided funding for the translation of this book. Translator: Jiang Hang Copyright © 2014 by World Scientific Publishing Co. Pte. Ltd. All rights reserved. This book, or parts thereof, may not be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording or any information storage and retrieval system now known or to be invented, without written permission from the Publisher. For photocopying of material in this volume, please pay a copying fee through the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA. In this case permission to photocopy is not required from the publisher. In-house Editor: Zheng Danjun Typeset by Stallion Press Email: [email protected] Printed in Singapore. b1539 The China Dream and the China Path b1539_FM 27 Aug 2013 1:17 PM Foreword by Zheng Xinli In 2009, Professor Zhou Tianyong wrote a book entitled China’s Way Out, where he discussed China’s achievements made over the three decades after the reform and opening up. He also analyzed the causes of the problems and weaknesses in the economic and social development of previous years, as well as the possible risks and prob- lems in future development. In addition, he compared the route and process for China’s development with those of India, Latin America, Japan, and Korea. It was after reading the proof of this valuable book that I agreed to write the preface. The following year, I received his other book entitled Chinese Dream and China’s Road that answers the question of China’s “way out” after the reform, aroused by the previous book, including solutions to the future problems of popula- tion, resources, and environment. Professor Zhou Tianyong pro- posed a comprehensive, long-term, and extensive strategic plan for China’s development, reform, and employment over the next three decades. This book examines, in detail, what steps China should take during the next 30 years. In my opinion, this is one of the finest books on basic Chinese policies I have ever had the pleasure of reading. Since the reform and opening up, China has made unprecedented achievements in economic and social development. While ushering in a new age, China has maintained sound development by seizing opportunities, overcoming difficulties, avoiding risks, and achieving v bb11553399__FFMM..iinndddd vv 88//2277//22001133 11::1177::3366 PPMM b1539 The China Dream and the China Path b1539_FM 27 Aug 2013 1:17 PM vi The China Dream and the China Path scientific development in the first decade of the 21st century. The rapid development and rise of Chinese economy is an unstoppable trend in the 12th five-year plan period. In fact, some predict this rapid development will continue well past the 12th five-year plan period. Meanwhile, it should also be noted that the social and economic development of China has encountered many difficulties and chal- lenges, with both long-term and short-term problems in the economy concerning employment, system reforms, and development. These issues are integrally linked, making it even more difficult to find effec- tive solutions to these problems. The year 2011 marked the 90th anniversary of the founding of the Communist Party of China (CPC), which was also the first year of the 12th five-year plan. The 18th Congress of CPC will be held in 2012. Therefore, at this critical development transformation period, it is of great importance for academic, political, industrial, and all other circles to pragmatically reflect on past achievements and experiences in order to plan future development in a rational and systematic manner. I believe that the publication of this book will promote and direct more scholars to actively research major problems related to the future of China and its people. During the critical transformation period, a more cohesive, opti- mistic, and ambitious common perspective is necessary for future societal development. This common perspective shall also embody the goal of socialist politics with Chinese characteristics. The foremost objective in the late 1970s was to eliminate poverty and lay out a road to prosperity through hard work, which precisely outlined the ideo- logical basis for civilians actively responding to and participating in the reform and opening-up. As China has ushered into a new era and a new life for its people, the interest demands of the people have sig- nificantly changed during the current transformation period. The base for the formulation of correct development strategies and the new objective forces for development lie in understanding the change of people’s interest demand, respecting the objective law for eco- nomic and social development, and summarizing and extracting the new common perspective on social development. Professor Zhou Tianyong has proposed the idea of the “Chinese dream” and carried bb11553399__FFMM..iinndddd vvii 88//2277//22001133 11::1177::3366 PPMM b1539 The China Dream and the China Path b1539_FM 27 Aug 2013 1:17 PM Foreword by Zheng Xinli vii out a systematic in-depth analysis. According to Professor Zhou, the “Chinese dream” includes living in urban areas, living and working in contentment, social security, equal public service, beautiful ecological environment, family security, and favorable spiritual life, that collec- tively represent people’s longing for a better life in the future, reflect the direction of social reform and progress, and highlight the liveli- hood issue that currently calls for a solution. As demonstrated by development practices, a correct develop- ment path is an important factor toward realizing the “Chinese dream.” The path and method for development in the past three decades since the reform and opening-up have been widely recog- nized and acclaimed, both at home and abroad. In fact, China has developed a productive development path, maintained rapid growth of national economy for more than 30 years, constantly improved citi- zens livelihood, and significantly enhanced comprehensive national strength by focusing on developing productivity, reforming both the state-owned and collective economic system, adjusting and optimiz- ing the industrial structure, gradually propelling political system reform, and adopting the strategy of opening-up. However, when focusing on the course of development, some obvious weaknesses can be seen in the early stages of development, such as the excessive dis- tortion of economic structure, comparatively lagging urbanization, the increasing gap between the rich and the poor, and the high con- sumption of resources and environment. The development road shall be appropriately adjusted based on the new development background, development tasks, and people’s demand for loans and interests. This is an important issue, covering a wide range of subjects and compli- cated relations, such as how to adjust the development road? What direction should the development road take? How to break from the constraints exerted by the current interest pattern? In this book, Professor Zhou has summarized the achievements, experiences, and shortcomings of the previous development road and proposed his individual insight on the adjustment of China’s development road and ideological improvement. The new development road shall focus on the following: adjusting urban and rural structure; realizing free residence and movement of population; creating public service for all bb11553399__FFMM..iinndddd vviiii 88//2277//22001133 11::1177::3377 PPMM b1539 The China Dream and the China Path b1539_FM 27 Aug 2013 1:17 PM viii The China Dream and the China Path urban inhabitants and favorable housing for migrants; assigning importance to the adjustment of industrial structure and vigorously promoting the third industry; emphasizing the business structure and vigorously developing small enterprises; carrying out the strategy of science and technological advancement; improving competitiveness; and building an innovation-oriented country. Since reform is the most important objective for determining China’s future path, pro- pelling reform is the key to achieving China’s goal. The most urgent reform issue is to temper controls on entrepreneurship and employ- ment. The most crucial reform issue is to promote the fiscal and taxa- tion system, which is the focal point of the second reform. The realization of the Chinese dream needs both constant eco- nomic development and progress in all aspects of society. Along with the increase in economic production and improvement in people’s living standards, the key factors for selecting China’s course turn to the constraints of resources and environment and the decrease of the gap between the rich and poor. According to Professor Zhou, if the development mode remains unchanged, there will be no evading of the issues of resources and environment. China shall conquer the constraints of resources and environment by improving technologies, adjusting urban, rural, and industrial structure, changing consump- tion style, and establishing market and governance systems that rationally utilize resources and environment, thereby moving towards sustainable development. The essential requirement of socialism, with China’s characteristics, is to eliminate polarization and achieve com- mon prosperity. However, China shall not follow the old path in achieving common prosperity, but shall be free from fixed idea modes, such as: “more state-owned economy and less private economy” and “more planned economy and less market economy”. China should recognize the reason for income inequality in a scientific and compre- hensive way; deliberate the question from a higher level based on economic laws and tendencies such as social transformation, eco- nomic structure change and regional population flow; encourage business startups; improve employment; adjust the employment structure; avoid the rise of the Gini coefficient in the transformation bb11553399__FFMM..iinndddd vviiiiii 88//2277//22001133 11::1177::3377 PPMM b1539 The China Dream and the China Path b1539_FM 27 Aug 2013 1:17 PM Foreword by Zheng Xinli ix from agricultural society to urban society; actively mobilize the mech- anisms and forces of self-balanced income distribution; and promote rational income distribution. Professor Zhou has conducted an in-depth study on some long- standing, major issues in China’s development strategies, proposed numerous influential views on policy making, published a series of works, and has successfully generated widespread influence on the society with his commitment, academic courage, solid theoretical basis and all his energy. As is often emphasized, one might be a master in his own special field, but it is quite difficult to research on such a large subject as national development plans and strategies, without wide research perspectives, proficient knowledge, and absolute dedi- cation. After reading this book, I find that Professor Zhou has two essential bases for writing such a book that exhibits his proficient knowledge on economics and a familiarity with the practices of devel- opment, reform and people’s livelihood in China, including a knowl- edge and understanding of many professional fields. I believe Zhou Tianyong’s expansive knowledge has created a book that will provide a helpful reference in policy making, while his spirit and research method will produce a profound influence in the current academic world. This book is a valuable resource for anyone concerned with the future and prospect of China over the next 30 years. Zheng Xinli First Deputy Director of the China Center for International Economic Exchanges 6 March 2013 bb11553399__FFMM..iinndddd iixx 88//2277//22001133 11::1177::3377 PPMM