Sustained Development Leads to Higher Living Standards
Moreover, China’s consumption structure has been obviously optimized. In 2012, the Engel coefficient, the proportion of total family income spent on food, of Chinese urban residents was 36.2 percent, 21.3 percentage points lower than in 1978. The Engel coefficient of rural residents, meanwhile, was 39.3 percent in 2012, 28.4 percentage points lower than in 1978.
Key Factors in Rising Living Standards
Since 1978, China has stuck to the basic national policy of reform and opening-up, which is why its economy has maintained and sustained rapid growth. From 1979 to 2012, China’s average annual GDP growth hit 9.8 percent, about seven percentage points higher than that of the entire world over the same period. China’s GDP soared to RMB 51,894.2 billion from RMB 364.5 billion in 1978, in which year China was the world’s 10th largest economy. By 2012, the country had become the world’s second largest, next only to the U.S., the proportion of its economic output in the world total that year having risen to 11.5 percent from 1.8 percent in 1978.
China’s reform and opening-up has optimized the allocation of resources and vastly improved economic efficiency. China’s development is similar to that of certain other countries and regions in the world. The development history of the U.S., the U.K. and Japan show that those countries maintained high economic growth for 10 or more years. From the 1960s to the 1980s, the “Asian Dragons” – Hong Kong, Singapore, South Korea and Taiwan – maintained high growth rates for more than a decade. All of these countries and regions realized fast economic development and none got stuck in the “middle-income trap” because they let the market play its role in optimizing the allocation of resources.
China, in addition, has fully developed its comparative advantages. Compared to more developed countries, China enjoys the obvious advantages of labor resources and industry chain. The Chinese government, based on conditions of socioeconomic development, has steadily improved the trade and investment environment and brought proactive policies and measures into effect. For example, China’s entry into the WTO at the end of 2001 further advanced reform and opening-up in various fields, so enabling the country to integrate into the global economy.
After the international financial crisis broke out, the Chinese government adopted an expansionary fiscal policy and monetary policy, so guaranteeing economic growth and also promoting global economic recovery. Since the second half of 2008, China has become an important engine for the world economy’s recovery. From 2008 to 2012, China’s average annual contribution to world economic growth was more than 20 percent.
China is still at an important stage of development, and about to embrace an era of new-type urbanization. Although the world’s most populous country, China’s demographic dividend is gradually weakening, to the point of disappearing. Pushing forward the development of new-type urbanization, therefore, conforms to the historical trend of the times. A higher urbanization level promotes coordinated development of the urban and rural economy; it is conducive to upgrading residents’ consumption structure and continuously generating new economic growth points. Urbanization will moreover promote economic, social and cultural vigor, hence raising people’s living standards even higher.
The average life expectancy of Chinese people in 2011 was 75-year-old. That in developed countries such as Japan and in Europe, however, exceeds 80. This disparity implies that China still needs to raise its citizens’ living standards. Chinese people’s lives have obviously improved. But were it not for heavy financial pressure, their life quality could be higher. Similar to the situation in Japan in the 1960s, there have been instances of people dying from overwork. Too few Chinese people, therefore, truly enjoy and savor their lives.
