Prologue

Prof. HO, C.P. Patrick
Deputy Chairman and Secretary-General, China Energy Fund Committee

Prologue

A China Story: The Beginning

 

Ladies and gentlemen,

Welcome to the United Nations. Let me begin by expressing my thanks to all you who have travelled here from far and wide, to attend this forum on Sustainable Development and Governance.

Introduction to the Forum

CEFC shares the principles of the Incheon Communiqué issued in Nov 2012 that national strategies and development plans can serve as effective anchors and reference points for more detailed approaches to address the key challenges facing sustainable development.

Equally we are  impressed by the Rio+20 recommendations calling for building platforms for follow up action and continuous knowledge exchange, review of good practices, and in-depth case studies from which success stories and lessons learnt can be analyzed and shared.

With these points in mind, CEFC organized this “Forum on Sustainable Development and Governance - A China Story” for experience sharing and to discuss how developing countries, such as China, can cope with the recent energy and related crises around the world.  

This Forum will summarize how a country can seize the opportunities of the time while capitalizing on its unique strengths and advantages to answer the needs of its peoples while creating new foundations for future growth.

The Forum will show that sustainable growth involves a delicate balancing act that takes into account multiple competing forces and needs. China’s experience, both successful and the not so successful ones, will be highlighted. It takes into account five important factors – effective governance, prosperous economy, dynamic culture, social justice, and environmental protection. The lessons learnt would be shared at this Forum.

 

A China Story: The Beginning

Towering over the east of the world for 5,000 years has been a unique time-honored ancient civilization with a continuous history and culture - China. 

The industrious and brave Chinese people has made contributions such as the compass, papermaking, gunpowder, and printing to the development and progress of human civilization.

In those five millennia, the Chinese has recorded at least four periods of prosperity. The first in the Zhou Dynasty (BC 1042-996) in which the Chinese feudal system of administration was introduced. The second in the Han Dynasty (BC 180-141) when Emperors governed with non-interference, farming, peaceful development, and dispatched envoys to forge the first contacts with the West, and opened up the Silk Road for trade.  The third was in the Tang Dynasty (AD 627-649) when China’s GDP was about one third of the world’s, and students came from Japan and neighboring countries to study in China. The fourth rise of China occurred in the Ming Dynasty (AD 1403-1435) when Admiral Zheng He and his powerful fleets were sent to sail from the South China Sea to the Indian Ocean, to Africa and, arguably, even to America, some 71 years before Columbus. 

The Chinese people are a peace loving people. Whereas Julius Caesar said “I came, I saw, I conquered”, the Chinese said “I came, I saw, I made friends, and I went home”.  Not one battle was fought, not one colony seized, and nobody was enslaved.

On the contrary, when the West came to China in the 18th century to “open it up for trade” at gun-point, peace-loving Chinese suffered almost ceaseless humiliation from foreign invaders for two centuries.

In the 14th century, the Renaissance delivered Europe from the darkness of the Middle Ages, freed minds, stimulated innovation and creativity in literature, art, science and technology and hastened the birth of individualism, capitalism and colonialism.

At the end of the 15th century, European voyagers set out across the oceans to discover and conquer what lay beyond while colonizing whatever they discovered.

In the later period of the 18th century, Britain’s Industrial Revolution, America’s War of Independence and France’s Great Revolution dramatically changed the progress of human civilization. Modernization of human society became an unstoppable historical trend, but the Chinese – still complacent at that time in national peace and splendor -- were completely unaware of the misfortune about to befall them.   Western countries, aiming to enrich themselves with natural resources through their military supremacy, forcibly expanded colonialism to the East.   A turbulent situation unimagined  in the previous  3,000 years was around the corner for China, and the most painful  period in its history  was about to be forced upon this nation of peace-lovers.  

For a long time, China's Foreign Trade had focused on exporting tea and agricultural products, fine silks and porcelain, which the West purchased with silver dollars. Following the Industrial Revolution and the booming productivity it brought, Britain’s most urgent desire was to enlarge its global markets – and, in particular, find a way of getting back the huge amounts it had paid China in silver dollars.  British colonists flooded China with opium and so were able to plunder over one and half million kilograms of silver dollars in the following four decades.

In response, and painfully aware of the hazards of opium , the Chinese Government decided to prohibit opium smoking and forced the Western merchants to surrender their stocks of the drug, and destroyed it. In 1840, the opium merchants, nearly all British, together with the British men-of-war invaded China and launched the First Opium War. China then, as the main Power in the East, enjoyed about one-third of global GDP, and had military forces of 800,000. The British had just 7,000 men in their expeditionary force, and fewer than 20,000 at the end of the war. Yet China lost the war. Hardly had the Qing Government negotiated grossly unequal treaties with Britain and the other invaders than the Second Opium War broke out in 1860, when China’s GDP was 1.6 times that of Britain. Yet China lost again.

Accordingly, the Chinese Emperor in 1860 ordered that the advanced technologies of the West must be learned.

The first Westernization Movement saw the initiation of new industries to improve military hardware. New naval and land forces were established. More schools were built and the students were sent overseas for higher education.

The disastrous Sino-Japanese War broke out in 1894 when China’s GDP was five times that of Japan.  China newly equipped forces lost once again.

The Westernization Movement was deficient because China’s GDP represented prosperity but not   proportionate national strength.  In 1895, a batch of scholars attempted to organize a coup to install a constitutional monarchy; but this Hundred Days' Reform was terminated forcefully 103 days later by the court.

 A battle cry became louder in China in the beginning of the 20th century – revolution – with Dr Sun Yat-sen in the forefront. The revolution broke out in 1911 and took down the Qing Dynasty, ending 2,000 years of feudal monarchies, replacing it with the first Chinese republic.

The emperor was gone and the pig-tail braid was cut. There was the Congress, the Provisional Constitution and many political parties, but in reality political power was controlled by Yuan Shih-kai and the Northern Warlords.  

At around that time, the October Revolution succeeded in Russia; the world’s first socialist country emerged, intellectuals in China opted Marxism over other political models.

The first National Congress of the Communist Party of China (CPC) was held in July 1921. With the death of Sun Yat-sen and an attempt by KMT to purge CPC elements, the two parties’ collaboration was ruptured in 1927.

In the same year, the CPC launched its Land Revolution and armed uprising.

Japan invaded China in 1937, leading to the setting up of the anti-Japanese KMT-CPC united front. Chinese people, then united, defeated the invader.

After the wars, the peace which the Chinese people had craved for so long did not arrive. The KMT-CPC civil war broke out in June 1946.  It was a hard and bitter struggle, but with the Chinese People's Liberation Army occupation of Nanjing in April 1949, Kuomintang’s administration in mainland China came to an end. 

The People's Republic of China was established on October 1st, 1949 and, led by Chairman Mao Tzedong, immediately set about its strength and prosperity, and spread the wealth among the common people.

It took only half a year for the new nation to stabilize the price of commodities and tackle other serious national issues that had plagued China since ancient times. Land reform was carried out continuously in rural areas so that more than 300 million peasants obtained about 700 million acreage of land. There was great optimism to build a better new China despite many obstacles.

The Korean War broke out in 1950, and China joined the war.   Relations between China and Western countries collapsed, China was isolated and sanctioned by them and faced a painstakingly long period of total self-reliance.

In 1957, China had just finished its First Five-Year Plan when some of its leaders decided to launch the Great Leap Forward in the misguided belief that it’s a shortcut to strengthening the country. This was followed by the tragic Great Chinese Famine which almost crippled the country.

National economy recovered gradually between 1962 and 1965.  However, the country was weakened and power was excessively concentrated in a few individuals.  

The Great Cultural Revolution was initiated officially on May 16th, 1966, which created considerable turmoil and exploited by counter-revolutionary groups. This resulted in the most destructive upheavals to the country and injustice to countless people. The national economy was seriously disrupted, social, cultural and legal institutions were trampled and the gap in modernization with advanced countries was further widened.

However, in the 1960s and 1970s friendships with other countries in Asia, Africa and Latin America were continuously expanded, winning China more room for international development.  Four months before U.S. President Richard Nixon’s visit to China in 1972, China regained its seat in the United Nations.

The Gang of Four responsible for the Cultural Revolution was smashed in October 1976. In 1978, Deng Xiaoping delivered a speech saying: “A party, a country, a nation...if it only abides by the books, then thinking rigidifies, superstition prevails, progress stops, vitality wanes, and the death of the party and nation would be in sight.  If reform doesn't proceed now, modernization and socialism would collapse.” The speech was described as emancipating the mind, seeking truth from facts, uniting as one and looking forward.  The reform and opening up of China officially began.

Deng Xiaoping further specified the four modernizations proposed by Premier Zhou Enlai in the 1960s (namely to develop China in the 20th century as a socialist power with modern agriculture, industry, national defense and science and technology) while meeting with the Prime Minister of Japan. He also indicated that the aim was for China to reach about US$1000 per capita by the end of the 20th century.

Following the creation of four Special Economic Zones, 14 coastal port cities were opened in succession; a more prosperous lifestyle was enjoyed by many ordinary families.   Greater creativity and innovation along with respect for knowledge contributed to an upsurge in entrepreneurship and economic success, which benefited even more people through gainful employment.

In 1988 unrest and buying of commodities swept like a tidal wave across China, and the savings of depositors decreased by 30 billion RMB in three months. The critical situation was caused by seismic shifts in the market economy which in turn was triggered by the collapse of old financial systems.

Political turmoil rocked Beijing between May and June 1989 due to dissatisfaction over certain domestic issues compounded by international political pressures.

In the face of such internal and external pressures, Deng Xiaoping said the basic route of the reform and opening up will last for a century and cannot be changed. He also dismissed opposition to new things and new ideas and maintained that development was the absolute principle. In 1992, 88-year-old Deng Xiaoping made his famous southern tour and delivered several landmark speeches: “China faces a dead-end if it gives up socialism, refuses reform and opening up, economic development and improving people’s life gradually”. His words continued to exert their influence to this day. The way of reform and opening up was practically institutionalized for China.

From 1989, President Jiang Zemin led China’s reform and opening up efforts. In the ensuing 13 years, the world witnessed the dramatic changes of China brought about by the success of its socialist market economy.

China’s flag was hoisted in Hong Kong in 1997, indicating that the land ceded forcefully over 150 years earlier had been returned to its rightful owner. Two years later, Macao also rejoined the Motherland.

In 2001 China became a member of the World Trade Organization, affording it a major steppingstone to a higher level of economic growth.

That same year, President Jiang Zemin initiated “Three Represents” theory - namely, that the Party must always represent the development of China's advanced productive forces (economy), the development of China's advanced culture (culture), and the fundamental interests of the masses (politics).

In 2003, President Hu Jintao declared a manifesto of putting people’s interest people first, pursuing a sustainable outlook on development and promoting an all-round development of the individual.

The government committed itself to building a harmonious socialist society, attaching importance to democracy, the rule of law, and harmonious coexistence between human and nature. These social core values were to complement economic, political, and cultural developments. 

Chinese people love peace and pursue harmony. Such inclination not only serves its own interests, but that of others they come in contact with. This is the desire of the people, and bespeaks the path of development China pursues and follows.

 

 

Modern China: Some basic facts

 

China has a vast territory of 9.6 million sq km and is the third largest country in the world. It contains 23 Provinces, 5 Autonomous Regions, 4 Municipalities and 2 Special Administrative Regions, and its population is drawn from 56 different ethnic groups.

China also has the largest population of any country in the world, which totalled 1.37 billion in 2010. Half of these people now live in urban areas due to the rapid urbanization progress.

Top Priority: to solve the food problem

After China adopted its reform and opening-up policies in1979, the late Chinese leader Deng Xiaoping set a target for the country to realize “Xiaokang”, (which means a moderately prosperous society) by 2000.  But there is no easy way to meet that target.

With only 8% of the World’s arable land, China has to feed 20% of the world’s people! That was why the former Premier Wen Jiabao addressed, “to solve the food problem of the 1.3 billion Chinese people has always been a top priority”.

Achievement of Reform and Opening-up

However, since its landmark economic reform in 1978, China has successfully transformed itself from a low-income rural-based country to a middle-income country with a widespread industrial economy.  Life expectancy rose from 68 to 74 years; the urbanization rate increased from 18% to 52%. In 2012, its government revenue increased exponentially from $US180 million in 1978 to $US1.8 trillion in 2012. Its total GDP output reached $US8.28 trillion, which is 142 times larger than for 1978.

In 2002, then Vice Premier Hui Liangyu said, “The problem of rural residents’ survival, food and clothing has been basically solved since the 16th Congress (2002)”. Starting from that point, China is going to continuous its route on building its overall Moderately Prosperous Society.

Overall Moderately Prosperous Society

In 2003, an evaluation system in respect of building a moderately prosperous society in all respects was introduced with 23 indicators in six sectors related to economic development, social harmony, living quality, democracy and legal system, culture and education, and resources and environment. Relevant statistics are:

l   Per capita GDP reaches $US5,000;

l   Proportion of urban population reaches 60%;

l   Gini Coefficient is between 0.3-0.4;

l   Engel Coefficient is less than 40%;

l   Per capita usable floor space is 27m2;

l   Mortality rate for under-fives is less than 20%;

l   Life expectancy is more than 75 years;

l   Average length of education reaches 10.5 years.

In 2012, China set the goal of completing the building of an overall moderately prosperous society in all aspects by 2020, requiring a new model for economic growth.

The “Two Doubling”

Under the new guiding principles, the country's 2010 GDP and per capita income for both urban and rural residents should be doubled. This was the first time that per capita income has been included in the economic growth target set for 2020, and was termed the “Two Doubles”.

In 2010, China's annual GDP is $US6.42 trillion, it will be doubled to over $US12.84 trillion in 2020.

In 2010, China's per capita income for urban residents was $US3,082 while the per capita income for rural residents was $US955. In 2020, these figures therefore will be doubled to over $US6,164 and over $US1,909  respectively.

To achieve the “Two Doubles” in 2020, the average annual growth rate of GDP should reach about 7.1%, while the average annual growth rate of per capita income should reach about 7.2%.

New Urbanization Model - A Sustainable Driving Force

In order to accomplish this goal, China new leaders have launched a new urbanization plan.

According to the reports by Chinese media, the government now has plans to move 400 million people into small and medium sized towns and cities with under 2 million residents over the next 10 years and involving a capital investment of $USD 6.4 trillion, resulting in 70% urbanization of its population at completion. The urbanization plans will be a major driving force for China’s future developments.

Evolution of the "Overall Approach" for China's Modernization Drive

Since Deng Xiaoping in 1978 rolled out reform and opening-up for China’s development, economic growth has dominated China’s agenda for three decades. In 1997, Deng Xiaoping Theory was written into the Constitution as a realization that China would remain in the primary stage of socialism for a long period of time, and should make economic development the central task.

Despite the double-digit annual growth rate for about three decades, the Chinese economy is now strained by a shortage of energy and resources, the wealth gap, inequitable income distribution, corruption and environmental woes.

In 2003, President Jiang Zemin’s “Three Represents” was incorporated into the Constitution to clarify the three aspects of socialism with Chinese characteristics. These are economic (advanced productive forces), cultural (advanced cultural direction) and political (the fundamental benefit of people) developments.

Around the same time, the idea of building a harmonious socialist society was put forward by Hu Jintao adding social development to the combination of economic, political, cultural development.

In 2003 the concept of Scientific Outlook on Development was put forward. China started to advocate ecological progress.

And in 2012, Mr Hu elevated ecological progress to a higher strategic level, in which he outlined the "overall approach" for China's modernization development in five aspects -- economy, politics, culture, society, and ecology. And these five pillars make up the Chinese interpretation of an overall approach to sustainable development.

At the same time, the concept was enshrined in the Party’s Constitution.

Scientific Outlook on Development

In placing such importance on the Scientific Outlook on Development, the top priority is to promote economic and social development; the core value is to put people first; the fundamental requirement is to pursue a comprehensive, balanced, coordinated and sustainable development; the basic method is to adopt a holistic approach; and the spirit is to free up the mind, seek truth from facts, keep up with the times and to be realistic and pragmatic.

Ecological Development

The 18th Party Congress in 2012 incorporated the building of ecological civilization into the country’s scheme of overall development. It is a landmark move in support for sustainable development across the world.

During the period of (2006-2010), China’s quantity of sulphur dioxide emission decreased by 14.29%, while the quantity of chemical oxygen demand fell by 12.45%

As for land, China’s total forest area increased from 2.39 billion acres in 2002 to 2.93 billion acres in 2011. In addition, the percentage of forest coverage rose from 16.55% in 2002 to 20.36% in 2011.

Concerning water, in the seven main river basins, water of standard quality rose from 29.1% in 2002 to 61% by 2011. In 2002, the area with seawater quality reaching Grade 1-II covered 49.7%, while by 2011 it had risen to 62.8%.

As for air quality, in 2011, among 325 cities at or above prefecture level, 89% of them met the Grade II national air quality standard, an improvement of 26% in 2002.

“Beautiful China”

In 2012, President Hu Jintao put forward plans for ecological development to build a “Beautiful China”. It consists of considerations for geographical space, all round resource conservation, protection of ecosystem and environment, and system building to promote ecology.

National space has to be planned carefully for production, living, and ecology. Marine resources will be developed.

Resource conservation involves reducing energy, land, and water consumption, imposing ceiling on total energy consumption and a cap on total water consumption.

In his report, Mr Hu called for efforts to leave to future generations a beautiful homeland with green fields, clean water and a blue sky. By doing so, China pledged in its 12th Five-Year Program to cut energy consumption per unit of GDP by 16% while slashing carbon emissions by 17% in the five years to 2015. That will help China meet its pledge of reducing carbon intensity by 40% to 45% by 2020 from their 2005 levels.

Ecosystem and environment protection includes protecting biodiversity, water conservancy projects and a holistic approach to prevent and control water, soil and air pollutions.

Systems will be built to promote ecology, protect geographical space, farmland, water resources, system for paying for resource consumption, and for compensating for damages, as well as for trading energy savings, emission rights, and water rights.

The building of a "beautiful" China is not simply a national image project. It demonstrates the sincerity of the Chinese people and its government to assume the responsibility of sustainable development for future generations and for the world as well.

Ladies and gentlemen,

Significant progress towards sustainable development has certainly been made in the last three decades. There is an urgent need to summarize all our previous accomplishments and experience to shore up our aspirations towards a more inclusive, equitable and sustainable growth development, and translate them into decisions and actions.

Development, as we know, results from the complex interaction of multiple competing considerations, including economic, political, cultural, social and ecological factors. It is time-specific and also context-specific. Each country has its unique cultural, demographic, geographic, historic legacies and governing traditions, and political and social philosophies. There is no blueprint, and certainly no universal blueprint, for any one country to follow or simulate while overcoming these disparities and deficits. However, while there is no “model” of development that can be replicated or exported to other countries, experience accumulated in the process and lessons learnt can be shared, reviewed, and analysed to benefit all stakeholders.

The purpose of this Forum is thus not to prescribe specific development strategies or policies, but to serve as references to accentuate the ongoing discussions on sustainable development and the broader consultation process taking place among governments, the UN system and other international organizations, civil society, academia and the private sector.

Now, let us listen to more China Stories as told by our experts.

Thank you!

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