Thursday January 20, 2022

China and global challenges

December 02, 2021

China has taken some surprising yet bold steps to combat the three major global challenges: the relentless fight against economic inequality, addressing catastrophic climate change effects, and vaccinating a billion people in a year. On top of this list is the country’s remarkable success in ending extreme poverty in just two decades.

The entire world is facing these three major challenges, but Chinese leaders paid attention to the latest trends and either took concrete action or are devising plans to deal with the challenges in a swift manner.

The last three decades have seen an unprecedented level of income and wealth inequality. Despite the global Covid-19 pandemic, the wealth of the world’s billionaires increased significantly, and they bounced back – after facing the slump in business operations caused by worldwide lockdowns – within a few months. On the other hand, the world’s poor may need a decade to reach pre-pandemic levels. These disparities are an outcome of the neo-liberal economic policies that were promoted in the 1980s.

A flawed market-driven economic model where a government – whether elected or unelected – just plays a subservient role to the global capital has caused extreme levels of inequalities.

China has been a beneficiary of market-led economic growth. But the benefits of this growth were not equally distributed. By 2018, China had 373 billionaires – 331 new billionaires were added between 2008 and 2018, with the top one percent increasing its share in national wealth from 21. 1 percent in 2000 to 32.6 percent in 2018. It is well known that China used to be an egalitarian country, but following the 1978 economic reforms, the country’s income gap widened sharply.

This massive inequality and the rising divide are still a major challenge for the Chinese government which has initiated several programmes to tame it. The first step is to reduce the urban-rural income gap through migration, urbanisation, subsidies to farmers and social protection programmes. Second, China’s targeted poverty reduction actions include increasing wage income, government transfers and regional development programmes – all of which helped in reducing poverty.

Third, the country took several steps to narrow down the gender gap. The urban economy and government policies contributed to narrowing the gap. Education also played a significant role in dealing with the problem. Through the country’s efforts, the gap in the education level between women and men decreased and the proportion of women with college degrees and higher education caught up to that of men.

Despite these progressive policies, realising the higher level of the rich-poor divide, Chinese President Xi Jinping announced, in August this year, to “adjust excessive incomes”, giving a clear message to the super rich that the state plans to redistribute wealth to tackle widening inequality. During a meeting of the Chinese Communist party’s Central Financial and Economic Affairs Commission, the president said that the government should “regulate excessively high incomes and encourage high-income groups and enterprises to return more to society”. This declaration could be an example for the world and other countries in the Asia Pacific, which are drafting inequality reduction policies.

Climate change is another major and existential threat. China is on the forefront to combat climate change – both at home and abroad – and is investing in renewable energy, climate adaptation, and resilience building. It also tried to fill the vacuum created by the US under former president Donald Trump. However, the major challenge remained with China’s coal-based power plants abroad. During his speech at the recently held UNGA – in September – Chinese President Xi Jinping announced that China will stop financing coal power plants. This announcement, though be taken cautiously, will be a game changer in the future energy development in Asia.

Asian economies were on the path of rapid growth before the pandemic hit in 2020. There is a danger that countries will rely on fossil fuel-based energy sources for their economic recovery. Therefore, it is critical that countries implement this Chinese decision of doing away with coal-based power plants and have a robust monitoring mechanism. This will lay the foundation of more sustainable and greener recovery. Other rich countries must also follow this decision to combat global climate change effects.

Covid-19, which was first detected in China in late 2019, has been affecting the entire world for the last two years now, causing a high number of deaths and economic shocks. Millions of workers were sent home; a majority of them were women and low-paid or underpaid care workers. The situation required swift action from governments and communities to get back to normalcy. Despite its huge population, China was able to contain the virus to a large extent.

Like some Western companies which were able to introduce Covid-19 vaccines in the market, Chinese companies also produced their vaccines in a timely manner. They not only succeeded in vaccinating over a billion people in a year, but also donated vaccines to other countries including Pakistan. Because of the Chinese vaccines, today, over 50 million Pakistanis are fully vaccinated and over 80 million partially vaccinated. It also helped mitigate the spread of the virus in Pakistan.

China follows a different political system, which does not allow the same level of individual freedom that exists in Western societies. The state has much more control over people’s right to assembly and association, and freedom of information. However, progressive policies and their long-term impact on China and the world are long lasting. Pakistan and countries in the region have lot to learn from the country’s economic policies and see what is better for the people.

The writer is an Islamabad-based environmental and human rights activist.