China may be a rich pauper despite growth

A short while ago, on Valentine's Day, Tokyo confirmed belatedly that China has displaced Japan as the world's second largest economy when the country's GDP contracted 1.1 percent in the fourth quarter of 2010 for a total of US$5.47 trillion, compared to China's US$5.88 trillion.

Although the news appeared stale because the outcome was all but certain when China's economic output surpassed Japan's last June, the announcement nevertheless added fresh meaning to the milestone. Only a decade ago, China's GDP of US$1.1 trillion was only one quarter of Japan's US$4.2 trillion. And, as late as 2005, China's GDP, at US$2.2 trillion, was half Japan's US$4.5 trillion. Some analysts predict that if China's economy continues to surge at its current pace, it could surpass the United States as the world 's top economy in 2020.

Such sanguine prospects, however, do not obscure the fact that China is still a developing country, with a per capita GDP of US$4,500, which about one tenth of Japan's and one quarter of Taiwan's. China's new ranking as No. 2 contrasts starkly with the per capita ranking of No. 95 among the 182 countries ranked by the International Monetary Fund.

The plain fact is that the Chinese people are still poor, with 100 million people living below the U.N. poverty line of US$1 a day. The number of poor is nearly equal to the entire population of Japan. That's probably why we have not seen an official expression of elation over the historic event.

It is, therefore, time for China's leadership to revisit Deng Xiaoping's grand strategy that after “letting some people in some areas get rich first,” they should help other people in other areas to “gradually achieve common prosperity.” That moment has come. It is the moment to try to let other people get rich too.

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