As the people of China celebrate their new year today, they have good reason to feel proud of their achievements and can look forward to another prosperous 12 months. Last year the economy grew by 9.1 percent and appeared to be accelerating since in the last quarter of the year, growth approached a stunning 10 percent. The extraordinary expansion in economic activity that this signifies nevertheless has to be weighed against the fact that for 50 years, the country’s commercial genius was crushed by communist dogma.
Thus the economic explosion represents in part the release of the pent-up pressures of five decades. But China is growing even faster than Japan’s postwar recovery and South Korea’s copycat leap onto the world economic stage. There are some analysts who believe that it will far outstrip the economic expansion of the United States near the end of the 19th century.
No one can doubt the Chinese capacity for hard and diligent work. It is these qualities, coupled with their still-low pay scales, that are turning it into the world’s workshop, whether for advanced clothing, computer hardware or myriads of other consumer devices. But both financially and psychologically, this helter-skelter growth presents serious risks.
Financially, an overheating economy inevitably leads to increasingly poor business and banking decisions, based upon the erroneous assumption that the good times are not going to end. Thus even a mild hitch in economic growth can cause business failures which set in train a far more serious domino effect.
Shanghai was once a city of bicycles. This year, because of the pressure of new cars and the city’s mass transportation system, bicycles are to be banned from the city center. This massive transformation to both the shape and priorities of China’s leading commercial center is leaving behind the ability of its citizens to assimilate and make sense of their new lives. At the moment, everyone is probably too busy working to worry very much. But the time will inevitably come when, at least temporarily, the harum-scarum economic march forward will falter.
At that point China may struggle to find the traditional conservative values that have underpinned their remarkable and ancient civilization. In a society based purely on pursuit of material gain, the dry rot of moral uncertainty and social dislocation can easily take hold.
And by no means everyone in China is yet benefiting from its startling economic boom, as the government in Beijing seems acutely aware. Thus as they welcome an exciting new year, the Chinese would do well to consider where their economic triumphs are leading their society as a whole.
