A high-speed train passes through Suzhou, Jiangsu province. Photo: VCG

 
Editor's Note:

As the Chinese economy, along with the entire global economy, has been confronted with considerable challenges in recent years, some Western officials and media outlets have stepped up their long-standing smear campaign against the world's second-largest economy. They cherry-pick information and even distort facts to hype various specious narratives such as "Peak China," while turning a blind eye to China's considerable strengths and vast potential. 

As part of the Global Times' multimedia project to set the record straight, the opinion page is publishing a series of in-depth interviews and signed articles with economists, experts and scholars from different countries and regions who share their views on the prospects of the Chinese economy and debunk the Western rhetoric.
In the ninth article of the series, Global Times (GT) reporter Wang Wenwen talked with Barry Trembath (Trembath), a retired hydropower engineer living in Sydney who worked for the World Bank for 17 years and worked in 23 provinces and province level cities in China, about his understanding of high-quality development and the prospects of the Chinese economy.

GT: Last week, the Communist Party of China (CPC) convened the third plenary session of its 20th central committee in Beijing, which focused on further comprehensively deepening reform and promoting high-quality development. Based on your working experiences in China, what do you think of China's pursuit of high-quality development and its accomplishments in this regard?

Trembath: As I understand it, high-quality development is quite an advanced concept encompassing several objectives. It has several dimensions:

Development should be coordinated: The concept of coordinated development is development that addresses the various structural imbalances that occur during uncoordinated development or development which is driven purely by market forces. In China's situation, the primary imbalance is between the rural and urban economies. The income in China's most advanced economy, Shanghai, is several times that of communities in the western mountainous area of China. Early attempts at evening out this disparity focused on affirmative action to correct the imbalance. Coordinated development addresses the issue in the planning stages, taking advantage of China's planned economy.

The success of coordinated development can be measured by the ratio of GDP in rich provinces to poorer provinces. Another measure is the Gini coefficient, a measure of inequality between rich and poor. According to World Bank data, the Gini coefficient has been steadily declining. In 2008 it was 0.495. The latest data I have seen put it at 0.467 in2022. A similar improvement is evident when comparing GDP per head in richer to poorer provinces. China's tradition of collecting data makes it easy to make these comparisons.

Innovative development: This focuses on areas such as 5G, artificial intelligence, quantum computing, robotics advanced manufacturing, research, and other technologies, particularly development which originates from basic research rather than development from ideas generated by others. A measure of innovation is the number of patents issued by Chinese firms and individuals, research organizations and individuals. This is clearly on the rise with China being one of the leading countries in this regard. Considering the authors of papers in international journals including in the United States, Chinese names are very evident.

Green development: Green development is perhaps the only aspect which is self-explanatory. Early in China's modernization, this was characterized by air and water pollution and the destruction of natural resources, mining and coal fired power stations. Today, coal fired power stations are rare and if they are constructed at all they will be to the highest standard. In my time with the World Bank, my colleagues carried out a project called CRESP, (China Renewable Energy Scale Up Program) and it is gratifying to see that China is now the leader in several renewable electricity technologies such as wind and solar photovoltaic. They are also a leading manufacturer of equipment in these areas.

Open development: This dimension recognized the value of opening the economy to outside participants, which enables China to benefit from ideas that originated in other countries.

Shared development: This concept relates to the balanced development and the development of a middle class rather than excessive wealth in the hands of the few, recognizing that China's task now is to provide its entire population a reasonable standard of living, rather than the early task of eliminating poverty. Statements from China's leaders emphasize that this is now their primary focus.

GT: China is accelerating the development of new quality productive forces. What is your understanding of this term? How will it help advance China's high-quality development?

Trembath: As I understand it, this is focusing on the innovation objective, particularly in manufacturing where robotics are used extensively and less reliance is placed on low-cost labour or goods. Production efficiency is also gained by the improvements in infrastructure so that the cost of getting goods to market is reduced considerably.

GT: You worked for the World Bank in 23 Chinese provinces between 1989 and 2005. How would you compare China's development during that period and its development today?

Trembath: I have been back to China several times and development appears to have proceeded exponentially. The main differences I have noted are the tastes of middle-class people and infrastructure. During my time working in China, I found that only Shanghai was catering to tastes such as Western food, such as steak and table wines. When I last visited Chongqing, I found that the price of good quality wine in the shops was extremely high. The other notable difference is infrastructure. I have many funny stories about travelling in China in the early days. Air travel and road travel were the first to change and see improvements. Since then, they have been joined by the high-speed railway network, the envy of the world.

GT: What "Chinese characteristics" help China to realize its development?

Trembath: I consider the key characteristic to be the economy being planned rather than reliant only on market forces. In a pure market economy, many people are left behind.  Western economies rely on "safety nets," the best of these is in Scandinavian countries. But they are imperfect. In Australia, I am constantly reading about people who "have fallen between the cracks." Yet, others are exploiting the system. An economy planned by educated professionals is better in many ways.

GT: In your article you said, "In the context where China is mainly responsible for Australia's wealth, it is time to celebrate their achievements rather than to continue to denigrate them." Many countries, including China and Western countries like the US, are economically interdependent. But why do they keep badmouthing China's economy and even calling for decoupling?

Trembath: This is the million-dollar question. There is no question that this is led by the United States, particularly the two recent presidents and the arms industry. It is joined by other allies including Australia. I believe that the US is losing its position as a world leader which it assumed after World War II. Of course, the arms manufacturers simply want to sell more arms. I am in no position to advise China. They should continue what they are doing and resist any temptation to be drawn into a fight. "It takes two to tango." 

China should continue to cater to its natural allies, the firms operating in China. While the military industrial complex in the United States have many lobbyists in Congress, the firms who rely on manufacturing in China and trade with China also have many lobbyists.

The other thing is a dimension of openness. My experience is that many people change their opinion of China when they visit the country. Before then, they have an old-fashioned view drilled into them by their parents that communism is bad and democracy is good. China is increasing the rate of visa free entry and electronic visas. This is good. China has reached agreements with Singapore and Thailand on mutual visa exemption up to 30 days. Anything that can be done to dispel the negative image that communism has will be beneficial.

GT: How do you see the prospect of the Chinese economy?

Trembath: Despite the slowing down of the economy, I think the prospects are very good. A growth rate of about 5 percent is excellent for an economy which is the largest in the world using purchasing power parity (as used by the World Bank and the IMF). I have learned in investing not to go against the trend and the trend is rising.