China faces a new future By Isabel Hilton - Saturday, March 12, 2011

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Two years ago a book called became a bestseller in the People`s Republic. It was a collective effort by a group of nationalists who complained that their government was giving in to western bullying. It carried an unpleasant political message, but it did raise the question of why — given that China had prospered for 30 years and its people were better off — should unhappiness be an issue.
Earlier this week, as reported, China`s censors in the State Council Information Office issued an order: “All websites are requested to immediately remove the story `In China 94 per cent Are Unhappy; Top-Heavy Concentration of Wealth` and related information. Forums, blogs, microblogs and other interactive spaces are not todiscuss the matter.”
The figures came from a global Gallup Poll in which Denmark scored an impressive 82 per cent of respondents who described themselves as happy. In China only six per cent said they were, ranking the country 125th. China`s least happy respondents lived in the first-tier cities, where people are relatively better off. Results like this are not good news for a government whose legitimacy for the past 30 years has rested on rising living standards.
Since Deng Xiaoping announced that “to get rich is glorious”, a minority — mostly in the Communist party — have grown very rich indeed. Millions more are better off. However, for the last decade, average household incomes have flat-lined as a percentage of GDP and the wealth gap has yawned. Across China, people have rediscovered that material satisfaction is relative.
The party is worried. For the last two Sundays, some areas of Beijing and other cities have been swamped with police to forestall any possible imitation of demonstrations in the Middle East. In China, there has been little public response but nothing seems to calm the nerves of a government that now spends more on internal security than external defence.
Happiness is much on the collective mind of the National People`s Congress. Before the 3,000 delegates is China`s 12th five-year plan that aims to spread the wealth a little more evenly. From this year, China will attempt to chart a course that will transform the economy from its current export-led, low-wage, low added-value model into a greener and more equitable mode of development. If it succeeds, it will be a shift in China`s economic direction that will have global importance.
The fear of popular discontent is only part of it. The real imperative is that China has exhausted all the elements that made the old economic model work: energy, resources, cheap labour, water and markets.
It has the world`s most rapidly ageing population, and the most developed parts of China are facing labour shortages that make wage levels uncompetitive. Industrial pollution of air and water have brought soaring cancer levels and irreversible land degradation, and the value added by churning out cheap goods for richer countries is not enough to pay for the damage. China has to change or implode.
Like Japan, Taiwan and South Korea before it, China must now attempt to move up the value chain, inventing its own technologies, not assembling those of others. There will be huge investment in seven strategic emerging industries including electric cars, biotechnology, nuclear and renewable energy and IT. Government investment in research and development is aimed at ensuring that the next generation of key technology patents are Chinese.
More people will move from the countryside to cities, which will aim to be more habitable as China shifts its climate narrative from the defensive truculence of `the West caused it; the West must fix it` to a story of economic opportunity and promise. If the plan works, the West will have to look at its assumptions of technological dominance, and the country that has been emblematic of the world`s environmental problems could become the key to solving them. Whether it will succeed in cheering up 94 per cent of Chinese who are unhappy is another question. — The Guardian, London

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