What is the reason for China's growth

China: on the way to "qualitative growth"?

In 2013, a German radio station quoted the then and current Prime Minister of China Li Keqiang with the assessment that his country needed economic growth of at least 7.2 percent in order to be able to guarantee a stable labor market. Ten million new jobs could be created annually and the unemployment rate would remain within limits.

At that time this rate was a good four percent, and the growth in gross domestic product reached a lively 7.3 percent. Li Keqiang's statement was in line with the common wisdom that the Chinese rulers could ensure that rural dwellers who moved into the cities could earn a living through (high) growth alone. This reduces the glaring prosperity gap between town and country and ensures social stability - a prerequisite for any stable rule.

The population pressure is easing

Seven years later, unemployment of 3.8 percent is expected with growth of 6.1 percent - social unrest on the terrain is not known. This may be due to the fact that the population pressure in the largest country in the world in terms of inhabitants is decreasing, the number of people able to work is shrinking. However, whether the unemployment rate, which has been sticking at four percent for many years, is absolutely correct in the country is definitely doubted, reports the correspondent of Frankfurter Allgemeine Zeitung. The decline in the working population is beyond doubt.

Old people in Shanghai

For the current year, economists expect a survey by the economic service Bloomberg for China still with growth of 5.9 percent. At the same time, however, the Institute for Economic Research at the People's University in Beijing comes to the conclusion that the communist leadership could still achieve one of its most important goals with growth of 5.8 percent: the promise, namely, the income of the people in the country to double from 2010 to 2020.

720 million poor

In this area, too, China has come an impressive way. In the middle of the last century, Chinese economic output per capita was below that of 1820, and poverty was correspondingly high. There are now a handsome number of billionaires and a wealthy middle class is expanding. But China is currently only in 80th place on the global prosperity scale - according to forecasts, it will be until 2049 before China will be a fully developed industrial nation. With corresponding prosperity for a broad population. The number of poor farmers and migrant workers is still estimated at 720 million - with a total of 1.4 billion inhabitants.

So if the per capita income of the Chinese last year was roughly that of the population of Macedonia or Algeria, there is still a lot to be done - even if the country, as some speculate, will become the USA as the largest economy in 2028 Should replace earth. Whereby only about 327 million people live in the USA, a quarter of the population of China.

Bought on credit

A certain degree of social peace could therefore be maintained even with growth of less than six percent. That would not be bad for the development process, the weekly newspaper recently judged The time: "Currently growth is shrinking to a healthy level." The assessment aims among other things at a potentially explosive problem of the Chinese economy: Much of the previous economic growth has been bought on credit.

This does not only apply to the ongoing promotion of loss-making and ineffective large state corporations. It also applies to expensive investment programs for airports, highways, high-speed trains. "Increased prosperity through excessive public investment in the provinces bought at a dear price," is how it is called The time.

It is hardly surprising that the country's debts are gigantic. The total debt is according to a report by Neue Z├╝richer Zeitung at almost 300 percent of the total economic output. These debts are widely spread among banks, regions, state-owned companies and private households. In addition to consumer offers, a lack of provision options promote this private debt - to provide for old age and illness. By the way, more than half of private debt is accounted for by other sources, real estate loans. And the volume of bad loans at banks has risen sharply. A time bomb when you think of the world financial crisis of 2008.

Investment property in China, Shenzhen Railway Station

Qualitative growth

This is how the Communist Party's mouthpiece is now China People's Daily in a comment that the six percent growth is "no longer an important threshold" and that the quality of the growth is decisive.

"China doesn't need any more machines and roads," said an author of last year Le Monde Diplomatique. "Instead, there is primarily a lack of state social security." This would also create new jobs, for example in hospitals or old people's homes.

Whether 'qualitative' growth or growth without quality - if it decreases in China, it will affect the global economy. The Institut der Deutschen Wirtschaft (IW) calculated the following scenario: "If the Chinese GDP grew by one percentage point less annually in real terms by 2028 than currently assumed, the growth in global GDP would be 2.8 percentage points lower overall." If China's growth collapsed by as much as three percent, there would be eight percent less growth worldwide.

  • The dream of young dropouts in China

    Chen's look into the sun

    A pad, a collection of brushes and her paint box - that's what Chen Yan (24) needs to capture the sunset in Guanzhong. The young woman lives in the settlement they call "AnotherCommunity". The name alone is proof that these Chinese are interested in a different way of life than, for example, the people who live in Beijing.

  • The dream of young dropouts in China

    Generations lunch

    Ghuazhong is located in Fujian Province, one hour from the provincial capital, Fuzhou. Here, 30-year-old Tang Guanhua (in the door frame) and his wife Xing Zhen (with hat) made their ideas of an alternative life a reality in 2015. In addition to the five permanent residents, "AnotherCommunity" offers people of different generations a temporary home.

  • The dream of young dropouts in China

    In the rice field

    One of the livelihoods of the municipality is to provide food as independently as possible. In "AnotherCommunity" students learn to cultivate their own rice field. According to the Reuters report, the small community had to destroy a large part of its income in 2018 - under pressure from the authorities.

  • The dream of young dropouts in China

    Between the loom and the saucepan

    Xing Zhen, the co-founder of "AnotherCommunity", makes the food for her roommates and the students in her weaving class. With the 35-year-old Chinese woman, you can also learn to make your own wardrobe. Jackets made of wool according to your own patterns, for example, but not quite as colorful as the circles on the wall here.

  • The dream of young dropouts in China

    The online line to the world

    On the left the laptop, on the right - next to the fan and hairdryer - all kinds of useful tools: This is how it looks in the house of 30-year-old Tang Guanhua. Together with his wife he built "AnotherCommunity". Anyone who has lived here for a year has a say in the fate of the municipality. A life away from the big Chinese metropolises - but Guanhua cannot do without online chat either.

  • The dream of young dropouts in China

    Morning meditation

    Reflection, calmness and "finding your own self" - that is now a great asset for many younger Chinese. Yang Zhaoyu (front) quit his job nine months ago. His life as a software developer was no longer fulfilling. In the morning he and the videographer Chen Yan seek silence during a meditation - not quite in the open air.

  • The dream of young dropouts in China

    School for life

    A common room in Guanzhong. Xing Zhen passes on their knowledge to her young students - who live here for a shorter or longer period of time - for example when it comes to making their own fabrics by hand on the loom. In addition to enjoying this work, one must above all be patient - including a school for life.

  • The dream of young dropouts in China

    Better to keep an eye on everything here too

    But anyone who believes that life in Guanzhong functions entirely according to different laws than in the city is wrong. Also in "AnotherCommunity" it is necessary to protect yourself from thieves or unwanted intruders. The call for state power will not be of any use in the remote settlement anytime soon, so - to be on the safe side - some surveillance cameras have been installed.

  • The dream of young dropouts in China

    Not just for young residents

    Liu Peilin is one of the elders in the settlement. She is 63 years old and as a transgender has not only found a home here, but also the solidarity of others and protection from the discrimination that she experienced in China. Liu Peilin lives as a woman with her partner in "AnotherCommunity".

  • The dream of young dropouts in China

    Everyone helps out in the field

    If you come to Guanzhong, you should be prepared for the fact that you have to lend a hand everywhere. For example in the fields that Xing Zhen travels with her green vehicle - here, too, the achievements of civilization can definitely be a blessing. Da Wang is only helping her here by holding the fence up. Shortly afterwards, he turned back to bamboo in the field.

  • The dream of young dropouts in China

    The song of the harmonica

    When the evening comes to "AnotherCommunity", the residents usually know what they have achieved. Yang Junhao then likes to pick up the harmonica while the other villagers are eating. He too had made himself useful in the bamboo fields that afternoon. Those who stay in the community like Yang in the long run appreciate the free and informal life in the country.

  • The dream of young dropouts in China

    Moonlight at the end of the day

    "Will I ever be able to live any other way?" Does Xing Zhen think about such questions when she returns to her house late in the evening in "AnotherCommunity"? The Reuters news agency writes that the Chinese media are full of stories about people looking for alternative ways of life in the countryside. And sometimes the local authorities let them go. Like in Guanzhong.

    Author: Stephanie Englert, Marko Langer