7 Deficit in Development and the Belt and Road

Xu Liping

Deficit in development is mainly manifested in development imbalance between the North and the South, loss of control over the gap between the rich and the poor, and loss of harmony between man and nature.

The imbalance between the South and the North means that the gap between developing countries and developed countries is growing wider, and the fundamental balance point between them has been lost. Since the beginning of the twenty-first century, with the rise of emerging economies, the focus of the world economy has begun to shift from traditional developed countries to emerging economies. The share of developed countries led by the United States in the world economy has gradually decreased, but they still take the dominant position in the world economic rules and agendas and occupy the centre of the world economy. There is no fundamental change in the macro situation of imbalance between the North and the South. According to the statistics of the International Monetary Fund over the years, by comparing the three indicators of GDP per capita, human development index, and Engel’s coefficient, the development gap between the developing countries and the developed countries is continuously widening.

The loss of control over the gap between the rich and the poor means that global issues such as poverty, unemployment, and income inequality are increasingly serious. The rate of return on capital is higher than the rate of economic growth and even higher than labour productivity, which is manifested as mismatch between personal wealth and distributed income and extreme disparity between the rich andthe poor. The Gini coefficient is an index that measures the degree of income equality of residents, and it is also an important reference index for measuring the disparity between the rich and the poor in a country. In September 2016, President Xi Jinping clearly stated at the 11th G20 Summit that “Gini coefficient has reached around 0.7, higher than the recognized alarm level which stands at 0.6. This is something we must pay great attention to”.[1]

The loss of harmony between man and nature means that with rapid development of global industrialisation and urbanisation, human beings have overly exploited and utilised natural resources, causing ecological damage to the global natural environment, which is mainly manifested in unsustainable development. According to the 2013 Human Development Report issued by the United Nations, the inaction in the aspects of environmental changes, deforestation, and water and air pollution may cause the world’s poorest countries and regions to lose more than what they gain. Humans need to focus more efforts on environmental issues. Climate changes have exacerbated long-term climate disasters. The lack of ecosystems has limited the survival and development opportunities for humans, especially the poor.

At the opening ceremony of the Belt and Road Forum for International Cooperation in 2017, President Xi Jinping stated that: “we should build the Belt and Road into a road of prosperity. Development holds the master key to solving all problems. In pursuing the Belt and Road Initiative, we should focus on the fundamental issue of development, release the growth potential of various countries and achieve economic integration and interconnected development and deliver benefits to all”.[2]

Unlike other regional economic cooperation mechanisms that are rule-oriented, the Belt and Road is oriented towards development and aims to crack down on the global problem of deficit in development. In response to the imbalance between the North and the South in deficit in development, the building of the Belt and Road has taken addressing the development issue for the developing countries as its core objective, aiming at promoting new types of South-South cooperation. The participating countries of the Belt and Road are numerous and vary greatly, so it is unrealistic to presuppose a unified cooperation mechanism. Therefore, the building of the Belt and Road has always been proceeded from the actual needs of the development of all countries, and it has pursued a diversified cooperation mechanism in accordance with the principles of extensive consultation, joint contribution and shared benefits and is committed to building a community of shared future for mankind based on the community of shared interests and responsibility. For example, it regards connectivity of infrastructure as a priority area because the backwardness of infrastructure is a bottleneck for the development of many developing countries. In practice, it can not only synergise the development strategies of various countries, but also complement with the current regional economic cooperation mechanisms and will effectively promote the development of countries along the routes and even the world.

The Belt and Road Initiative has provided opportunities for many developing countries to participate in regional economic cooperation on an equal footing. It will help bring into play the existing comparative advantages of various countries and help them to form new comparative advantages, and make economic globalisation more open, inclusive, balanced, and beneficial to all. In 2016, China’s direct investment in countries along the Belt and Road reached US$14.5 billion. Chinese enterprises have already established 56 economic and trade cooperation zones in more than 20 countries along the routes, which involve a total investment of US$18.5 billion, and added nearly US$1.1 billion in taxes and 180,000 jobs for the host countries.

China proposed the new concepts of “innovative, coordinated, green, open and inclusive” development to provide a new path for the building of the Belt and Road Initiative.

The concept of innovative development (or innovation-driven development) is the core of new development concepts and it emphasises that innovation is the primary driving force for development. The driving force for development determines the speed, effectiveness, and sustainability of development. Innovation is the primary driving force for the development in the new normal and the vitality and source of promoting coordinated development, green development, open development and shared development. The concept of innovative development emphasises all-round innovation in theory, system, science and technology, and culture, with particular emphasis on innovation in science and technology. Xi Jinping stated that innovation was a complex social systematic project involving all areas of economy and society. Various areas are closely linked to each other, so it is necessary to break the constraints and obstacles in an all-around and systematic way and carry out multi-dimensional innovation. Among them, innovation in science and technology is the key and core part. Science and technology constitute a primary productive force and are an important lever and fundamental driving force for economic and social development.

The concept of coordinated development emphasises that we should avoid preference for unitary development, break path dependence, and pursue coordinated development in all aspects and links such as balance of the relations between production and productivity forces and between the superstructure and the economic base, expand the development space in various fields, and strengthen coordinated, integrated, and systematic development to promote the smooth development of socialist cause with Chinese characteristics and build a well-off society in all respects. The concept of coordinated development stresses that we should seriously handle the major relations in development, address the issue of development imbalance, and form a balanced new structure. China adheres to coordinated regional development and is adjusting its economic structure and spatial structure and adopting a new model of optimised development in densely populated areas and an intensive economic growth model. China insists on balanced urban and rural development and promotes the simultaneous advancement of new industrialisation, IT application, urbanisation, and agricultural modernisation to realise the integration of urban and rural development. China fosters both material progressand cultural and ethical (cultural and ideological) progress, improves people’s material and spiritual life, and enhances the material and spiritual strength of construction of the socialist cause with Chinese characteristics.

The concept of coordinated development emphasises cooperation, development, mutual benefits, and win-win outcomes. China enhances coordinated development in all areas and has launched the development strategies to encourage the government, enterprises and non-government organisations to carry out comprehensive cooperation in politics, economy, culture, and ecology. China enhances cooperation with various countries in the world, puts aside cooperation barriers and disputes and works hard to seek interest integration points and economic balance to achieve mutual benefits and win-win outcomes.

The concept of coordinated development emphasises the establishment of an equal and balanced global development relationship to achieve common development and common progress. Due to the uneven development in today’s world, it is necessary to eliminate imbalanced and inequitable development burdens and political attachment conditions, expand the integration of economic interests, narrow the development gap between countries, allow countries and people of all ranks in society to share development dividends, and promote all countries to achieve different levels of development and eventually achieve common prosperity.

How to realise the harmonious coexistence of man and nature is unarguably apressing issue that all countries in the world should ponder over and address. The concept of “green development” advocated by China is precisely the scientific outlook on development that promotes sustainable development of human society. Green development advocates green productive forces, aims to achieve mutual benefit and integration in productive force development, ecological development and social development, and pursues the dialectical unity of development and environmental protection. Green development advocates the concept of green nature, emphasises that mankind is a part of the natural environment, respects and protects nature, pursues the harmony between man and nature, and opposes the confrontation between man and nature. The development of human society has experienced agricultural civilisation, industrial civilisation, and even the current post-industrial civilisation era. Particularly, the wave of industrialisation in the modern world has brought about positive effects to humankind. Meanwhile, it has also brought a lot of negative effects and resulted in waste of resources, environmental destruction, ecological imbalance, and eternal swelling of people’s materialism and hedonism. Such a mode of development at the expense of destroying mankind’s own living conditions does not serve the overall interests and long-term interests of mankind. Green development advocates green development modes, optimises the economic production structure, transforms the modes of economic growth and development, and seeks new growth points that can achieve both economic and ecological benefits. Green development emphasises the relationship between poverty, development, and the environment and advocates comprehensive, all-around and equitable development. It is a concept of sustainable development different from the traditional concept of development and a mode of development that is subject to assessment, constraints and regulations. Green development advocates environmental protection awareness and value orientation and insists that that everyone has the responsibility and obligation to take care of and protect the environment. Everyone should start from small things and from everyday life and work together to build a beautiful homeland for mankind. Green development is not only a rational response and choice made by human society after deep reflections on the ever-increasing contradiction between population, economy, environment, and resources, but it is also an internationally recognised economic ethical norm. It is also a criterion and value-oriented guidance for regulating and restricting the behaviours of human beings in the process of coordination between mankind and nature.

The concept of open development emphasises that we should implement a more proactive opening-up strategy, raise the quality of opening up, and improve the open economy so that it promotes mutual benefit and is diversified, balanced, secure, and efficient. China will continuously improve its foreign trade and foreign investment structure, deepen its all-around opening-up to the outside world, develop an open economy of higher standards, establish an open socialist economic system with Chinese characteristics, further integrate itself into global economic development, make full use of advanced scientific and technological achievements and useful management experience created by the human society, and strive to enter the middle and upperends of the global industrial value chain and take a favourable position in the international division of labour so as to continuously inject new vitality for socialist modernisation. Open development emphasises emancipating the mind, enhancing confidence in opening up, and expanding awareness of opening up. China has always adhered to the ideology of emancipating the mind and opening up to the outside world, and will strive to build a pattern of opening up and international environment conducive to China’s economic development and continuous rise.

The concept of shared development adheres to the principle of development for the people, by the people and to the benefit of the people so that all our people have a greater sense of fulfillment as they contribute to and gain from development and the people of the world can share China’s contributions. China’s development has benefited from the international community, and it is willing to share its own development experience and opportunities with other countries. China welcomes all countries to ride on its development and share the achievements of its reform and opening up.

The concept of shared development emphasises on ensuring that the achievements and fruits of reform and opening up benefit all people and that China’s programmes and contributions benefit the people of all countries. Ever since the reform and opening up, China has made material and non-material achievements in the fields of economy, politics, society, culture, science and technology, education, health care, and ecology. These achievements have not only met the material needs of people such as food, clothing, shelter, etc., but also satisfied people’s spiritual needs for the pursuit of their own values, their sense of fulfillment, and their sense of well-being. These achievements should bring benefits to all people. Meanwhile, the active explorations made by China and the development models forming in the process of its reform and opening up are all of great significance and value. For the world, they are all shared results that can play a positive role and effect.

The concept of shared development emphasises reducing poverty, narrowing the gap between the rich and the poor, and pursuing fairness and justice. Without fairness and justice, it is impossible to realise shared development. Shared development objectively requires that all fruits of reform and development should be distributed in a fair and reasonable manner among all people, and that we should achieve shared benefits while making joint contribution and promotes joint contribution while achieving shared benefits. Strengthening efforts in reducing poverty, narrowing the gap between the rich and the poor, and safeguarding the rights and interests of the disadvantaged groups in society is an important issue we are facing in shared development. We should establish an institutional guarantee system to safeguard the rights of people in equal participation and development, which is an important guarantee for achieving shared benefits.

The concept of shared development advocates common development and pursues common prosperity. Xi Jinping once stated that a self-perpetuating divide between the haves and have-nots was not acceptable. True happiness should be shared and enjoyed by all. Shared development is to eliminate the disparity and polarisation between the rich and the poor, realise the common development of the Chinese people, share the benefits, and create a better life and ultimately achieve common prosperity for everyone so as to realise the ideal state of common development and common prosperity of China and the rest of the world.

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[1] Xi Jinping, “Implementing the 2030 Agenda for Sustainable Development to Promote Inclusive Development”, Xinhuanet, September 4, 2016,www.xinhuanet.com/world/2016-09/04/c_129268985.htm

[2] “Xi Jinping Made Five Comments on Promoting the Building of the Belt and Road”, Xinhuanet, May 14, 2017,www.xinhuanet.com/world/2017-05/14/c_129604239.htm