China’s seemingly eye-catching economic success is not enough.
Chinese Communist Party President Xi Jinping said in his New Year’s message for 2021 on the evening of December 31, 2020 that the gross domestic product (GDP) is expected to reach a new level of one trillion yuan in 2020 and the 13th Five-Year Plan will be successfully completed. However, many messages indicate that the seemingly eye-catching Chinese economy is not enough.
Xi Jinping’s New Year message praises China’s economy
In the evening of December 31, 2020, the official media Xinhua News Agency released a New Year’s message for 2021 from Chinese Communist Party President Xi Jinping.
According to Xi, the 13th Five-Year Plan has been successfully completed; GDP is expected to reach a new level of one trillion yuan in 2020; and grain production has been “seventeen consecutive bumper years”.
Xi said, “In 2020, a great historic achievement will be made in building a moderately prosperous society in all aspects, and a decisive victory will be achieved in the decisive battle against poverty …… After eight years, nearly 100 million rural poor people under the current standard will all be lifted out of poverty, and all 832 poor counties will be removed.”
However, China’s GDP data has always been questioned by research institutes as having water in it. In recent years, Liaoning, Inner Mongolia and other provinces and cities have taken the initiative to reduce their economic indicators (commonly known as “water squeezing”), giving research institutions conclusive evidence. After the reduction, some local GDP figures have changed significantly.
China is not out of poverty or even back into poverty
The so-called War on Poverty Alleviation is a program started by Beijing authorities at the end of 2015 with the aim of solving the problem of all poor areas and people by the end of 2020.
In August 2020, Chinese official media reported that “this year is the closing year of the poverty eradication campaign, and winning the battle against poverty is a hard task that must be completed to build a moderately prosperous society in all aspects.”
Liu Yongfu, director of China’s State Council Poverty Alleviation Office, told the media that China’s standard per capita annual income for poverty eradication is about RMB 4,000.
Based on the exchange rate of the yuan to the U.S. dollar on Dec. 31, 2020, China’s standard for poverty eradication translates to $1.67 per day.
In 2011, China standardized its poverty line to the extreme poverty standard of $1.90 per person per day used by the World Bank. However, what Communist Party officials did not tell the people is that in 2018 the World Bank added two new levels to the original standard: a poverty line of $3.2 per person per day for low- and middle-income countries, and a poverty line of $5.50 per person per day for high- and middle-income countries.
The website of China’s National Bureau of Statistics (NBS) published an op-ed by Zhang Jun, director of the International Statistical Information Center of the Bureau of Statistics, on August 7, 2020. The article mentions that China’s gross national income (GNI) per capita rose further to US$10,410 (equivalent to 72,000 yuan) in 2019, surpassing the US$10,000 mark for the first time.
According to the article, “In 2000, China’s GNI per capita was only US$940, which was among the lower middle-income countries classified by the World Bank based on GNI per capita; in 2010, China’s GNI per capita reached US$4,340, reaching the standard of upper middle-income countries for the first time; in 2019, China’s GNI per capita further rose to US$10,410 , breaking the US$10,000 mark for the first time, above the average of US$9,074 for upper-middle-income countries.”
Now, Communist Party officials are supposed to set the poverty line at $5.50 per person per day. By this standard, essentially all of China’s 832 national-level poverty-stricken counties have not been lifted out of poverty.
On May 28, 2020, Li Keqiang said at a press conference, “There are 600 million people who earn just $1,000 a month, and $1,000 may make it difficult to rent an apartment in a medium-sized city, and now we have hit an epidemic, and after the epidemic, people’s livelihood is important. Employment is the biggest livelihood, no employment that is 900 million mouths to feed.”
The sudden outbreak of the Wuhan pneumonia epidemic in 2020 left many companies closed, employees unemployed, and the Chinese people’s wealth did not increase, and some areas even returned to poverty.
Xi Jinping Says Grain Production ’17 Consecutive Bumper Years,’ but Food Crisis Looms
The Economic Work Conference of the Central Committee of the Communist Party of China, which ended last month, identified eight key tasks for 2021. For the fifth key task, the meeting proposed to ensure food security; to strengthen the protection and utilization of germplasm resources, strengthen the construction of seed banks; to carry out seed source “neck” technology research; to firmly guard the red line of 1.8 billion mu of arable land; to build a national food security industry belt.
The word “security” is a high-frequency word in the Central Economic Work Conference of the Communist Party of China (CPC), increasing from one time in the CPC Central Economic Work Conference at the end of 2019 to 10 times in 2020, including scientific and technological security, food security, supply chain security, energy security and so on. Among them, the word “security” appears 2 times in the food-related expressions.
On December 10, 2020, the Communist Party of China (CPC) officially said that there was another “bumper harvest” of grain, and that it was 0.9% higher than that of 2019.
However, since the Wuhan pneumonia outbreak, China has continued to purchase foreign grain. According to Chinese customs data, the scale of grain imports is expected to reach a record high in 2020.
With the Wuhan pneumonia epidemic and flood damage in 2020, China’s grain production has actually decreased significantly, with some mainland Chinese media estimating a 30% reduction in production. However, no specific official figures have been released.
Chinese grain merchants believe that the issue of Chinese grain imports could be a major problem worldwide in the coming years. China’s food imports from Southeast Asia are bound to increase exponentially, which will have a huge impact on the security and price stability of the Southeast Asian region.
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