Hayward: China Boasts of Economic Might While Exploiting ‘Developing Nation’ Status

A screen shows Chinese President Xi Jinping speak during a ceremony to mark the 100th anniversary of the founding of the ruling Chinese Communist Party at Tiananmen Square in Beijing Thursday, July 1, 2021. (AP Photo/Ng Han Guan)
AP Photo/Ng Han Guan

China celebrated its vast and growing economic power during the 100th birthday celebration for the Chinese Communist Party on Thursday, with dictator Xi Jinping humblebragging that his party has achieved its first centenary goal of “building a moderately prosperous society in all respects.”

China, however, still presents itself as a “developing nation” to international economic forums like the World Trade Organization (WTO) and enjoys concrete benefits by claiming that status.

Xi boasted on Thursday that becoming a “moderately prosperous society” has “brought about a historic resolution to the problem of absolute poverty in China, and we are now marching in confident strides toward the second centenary goal of building China into a great modern socialist country in all respects.”

“The decisive voice of Xi when he made the declaration at the very beginning of his speech and the loud and lasting cheers from the crowd on the Tiananmen Square that was immersed in a festive atmosphere,” the state-run Global Times hyperventilated, “underscored the pride and exhilaration of the entire Chinese nation over the magnificent and hard-fought achievement reached with the blood and sweat of generations of Chinese. The historical weight of the announcement at such a historical moment cannot be overstated.”

The Global Times went even further than China’s authoritarian ruler, pronouncing Communist China’s economic growth to be the culmination of a 2,500-year physical and spiritual quest by the Chinese people to find xiaokang, that sacred state of modest prosperity that implies perfect social justice and harmonious effort – comfortable progress without greed or exploitation. 

The Party newspaper threw in an infographic that claimed China’s growth outstrips the widely acknowledged postwar “economic miracles” in Germany, Japan, and South Korea.

There are some problems with this burst of Communist economic triumphalism, beginning with a healthy distrust of any data released by the deeply dishonest Communist Party. Skeptics note that China has a habit of redefining its poor out of poverty instead of raising their standard of living. 

One way Beijing does that is by using definitions of “extreme poverty” that would be more appropriate for a Third World nation than a superpower that claims it will become the planet’s largest economy in a few years – in part because China’s coronavirus devastated the rest of the industrialized world in 2020.

Observers such as the World Bank credit China with making progress on the standard of living for its poor, but China uses a “poverty line” of $2.30 daily income – much lower than the World Bank’s recommended $5.50 per day – to argue that extreme poverty has disappeared completely. 

Chinese state media congratulates Communist Party leadership for clearing that very low bar with absurd levels of enthusiasm. India’s First Post wryly noted in March that a Chinese state media report congratulating Xi Jinping for making the “historic leap” to eliminate poverty referred to him by “his full name and title as party leader 121 times.”

First Post quoted former World Bank expert Indermit Gill explaining how China claims to be both an unstoppable colossus bestriding the world economy and a “developing nation”:

The accolades for the Chinese government were surely deserved in 2000 when China transitioned from low-income to lower-middle-income. The Communist Party might even have deserved praise a decade later when China became an upper-middle-income economy; reducing poverty headcounts gets harder as poverty incidence falls. But in 2021, as China approaches high income, measuring progress using the official poverty lines of the world’s poorest countries as a benchmark may be the very definition of underachievement.

Other skeptics noted that while a great deal of extreme poverty has been alleviated in China over the past two decades, a great deal of extreme poverty was caused by the Communist Party policies before that. Furthermore, while the Party and dictator Xi love to claim credit for lifting the Chinese people out of poverty, the people did most of that lifting on their own once the lunatic policies of the Party’s founding fathers were discontinued.

Advancement from not-so-extreme poverty to middle-class comfort remains extremely difficult for most of China’s poor. The Chinese government seizes their property and destroys their livelihoods with callous disdain, as when villages were obliterated by controlled floods in order to protect China’s manufacturing assets last year.

Just a year ago, government media was hailing China as “the largest developing country in the world” and whining about the United States removing China from its list of developing nations, even as Beijing tossed bags of money around the Third World with its Belt and Road Initiative and boasted it would soon eclipse America’s economic strength. On some days, China claims to be the world’s tallest dwarf; on other days, the world’s shortest giant.

Presenting itself as both a world-conquering superpower and a developing nation in desperate need of financial assistance has concrete benefits for China. Beijing is able to play a double game on energy, for example, by invoking its “developing nation” status to build dirty power plants and pump greenhouse gas, forever promising that it will clean up its act in a few decades. Climate change activists are apparently willing to keep falling for this scam indefinitely.

In 2018, CNBC grudgingly found a “grain of truth” in former President Donald Trump calling out China for reaping “tremendous advantages” from its status as a “developing nation.”

As CNBC explained, China secured developing nation status based on widespread poverty when it began applying for WTO membership in the late 1980s, and it has simply never upgraded its status – nor did anyone before or after Trump seriously challenge it – even though it is now the second-largest economy in the world, and arguably the first-boastful. 

China is able to evade many requirements that would be placed on a rich nation by simply claiming not to be one when the WTO asks, and other members are obliged to offer it preferential deals, as though its people teeter forever on the edge of starvation and ruin.

The WTO admits in official documents there is no real definition for a “developing” nation, so it is up to member nations to “announce for themselves” unless other members challenge their claim.

When pressed to give up its “developing” status, Chinese officials say they have a “fundamental right” to make the claim for as long as they please. Pressed a little harder, the Communist Party says much of its vast population still has infant mortality, adult illiteracy, and life expectancy issues consistent with developing nations.

“China is no longer an emerging economy and probably has not been one for nearly a decade. While the U.S. Trade Representative may have acted hastily in declaring that it would start considering China as a developed country for trade purposes last February, multilateral bodies should take a fresh look at such countries that have long ceased to be ‘emerging,’” Nikkei Asia wrote last August.

“It is absurd and ridiculous for China to be designated as a developing country,” Dan Blumenthal of the American Enterprise Institute said more bluntly to the Washington Times in November. “China is one of the prime movers of global markets at this point. It distorts global trade through mass subsidization of its state-owned enterprises and through massive thefts of intellectual property. It’s a major economy, not a developing economy.”

“It’s outrageous that Beijing, with its ‘developing’ country status, has been allowed to borrow money from the bank at very low interest and then turn around and, through its own expanding Belt and Road Initiative, offer up its high interest Chinese loans to poorer countries in places like Africa. How is that in any way fair?” a former bank official complained to the Washington Times.

Some observers – usually those who greatly underestimate the advantages of claiming developing nation status – speculate China will abandon its claims in another burst of self-congratulation soon, perhaps even as the culmination of the Communist Party’s 100th-anniversary celebrations. 

As recently as Sunday, however, state media was still describing China as “the largest developing country” and posturing as the brotherly champion of all other developing nations against “arrogant” Western “hegemony.” 

The Biden administration seems to have quietly abandoned Trump’s push to rescind China’s developing nation status and benefits – not even for the sacred cause of climate change, for which Biden’s party is prepared to turn America back into a developing nation. Biden’s climbdown has been rewarded with nothing but seething contempt from the tyrants of Beijing, who miss no opportunity to claim Biden is every bit as “anti-China” as Trump was.


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