Is China Rich or Poor?

When it comes to China’s economy, there seems to be very diverse narratives of its prowess. On the one hand, China’s economy is second only to United States at $14.7 trillions and may have in fact surpassed the United States on a price parity base. China has more billionaires than the United States in 2021. Early in December 2020, China announced that it had eradicated extreme poverty (less than $1.95/day according to World Bank classification) within its territory. This achievement is breathtaking in scale. No country has improved its people’s wellbeing as much as China. On the other hand, it is widely reported and confirmed by Chinese Premier Li Keqiang that 600 million people still live with a monthly income of barely $155, equivalent to an annual income of $1,860. Of these people, 75.6% live in rural areas. They are not living under absolute poverty, nor officially being affected by China's poverty elimination goals, but their living standards are certainly nowhere near the general perception of China’s economic development in the media.

To understand and engage effectively with China, one should remember that China is not an economic monolith. Behind the world’s second-highest GDP are hundreds of millions of people who just want to stop being poor. One has to take a multi-dimensional and panoramic view of China to understand the government policy priorities. On the other hand, it is a centralized system, the focus of the central government has to balance the needs for both the industrialized coastal region while at the same time to support the needs for development of the vast inland region in central and Western China. At the same time, the regional economic imbalance is driving mass domestic migration and urbanization. While most of the western media focus on US-China relation and the fast economic development in the major metropolitan areas, it is likely the Chinese government is going to be more preoccupied for at least another generation by the need to increase domestic incomes for the less developed inland regions. Internal political and economic challenges are much more daunting than the external ones. China will proceed with reform and change at its own pace and most likely based on domestic agenda, rather than external pressures.

For people growing up in the United States, they tend to romanticize farmer’s life: staying away from the busy traffic, picking your own vegetables, breathing the morning fresh air, enjoying the morning coffee. Who would not want such a life? For many parts of the world including large part of China, farm life has a very different connotation. It means backbreaking work, limited opportunities for children, and limited access to modern life. I came across this touching documentary by a Japanese reporter Mr Ryu Takeuchi (竹內亮) about the rural life in Yunnan province, one of the most ethnically diverse provinces in Southwest China. It documented a visit to a remote region and included the interactions along the way with banking staffs who climb so high to provide mobile banking services to the locals, with children who thirst for knowledge and education, with volunteer teachers who love the children, with the mother and father who did not have any formal education yet fully appreciate its importance for the future of their children. I have lived and visited various parts of China over the years and to a large extend, life in rural areas in other parts of China is not that different.

Most of us have read the ancient India parable about the six blind men and an elephant when each of the blind men believed that he knew just how the animal looked based on how it felt when each touched different parts of the elephant. They were all partially correct and partially wrong, but none had the totality of truth. Human have a tendency to claim absolute truth based on their limited, subjective experience as they ignore other people's perspective which may be equally true. It is important for us to have a fuller picture in order for us to effectively engage with other people, and equally important when we try to understand another country, especially a country with very different culture and history.

I will end with this humor I came across on the internet. “Six blind elephants were discussing what men were like. After arguing they decided to find one and determine what it was like by direct experience. The first blind elephant felt the man and declared, 'Men are flat.' After the other blind elephants felt the man, they agreed.”

Related Articles

Understanding China is a Challenge but also a Necessity (11/30/2019)

Understand China Through Historical Lens (2/25/2019)

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