王晋斌：高收入国家意味着什么 - 2021-04-23

Wang Jinbin
In 2020, China’s GDP (Gross Domestic Product) exceeded the 100-trillion-yuan threshold. Meanwhile, the per capita GDP surpassed US$10,000, which was the second time that the country had made such an achievement. According to previous data, there is little difference between its GDP and GNI (Gross National Income) figures, with the GDP slightly higher than the GNI. This means that China’s per capita GNI exceeded US$10,000 for two consecutive years from 2019 to 2020. According to the standards released by World Bank in 2020, a country with a per capita GNI of more than US$12,535 is considered high income. In the near future, China’s per capita GNI will reach the threshold of high-income countries and become a member of them. However, we must also realize that high-income countries are not equivalent to developed countries, and that we can’t be complacent. Currently, the per capita GNI in generally recognized developed countries is above US$30,000. There is still a big gap between high-income countries and developed countries. In addition to advanced economic development, developed countries also meet other requirements such as high-quality manufacturing industry, modern service industry, high-level environmental and social governance and high human development indicators, while high-income countries only need to reach the income threshold.
People’s living standards have been greatly improved
China’s per capita GNI is going to reach the standard of high-income countries, which means that the people’s living standards have been greatly improved and socialist modernization has reached a new stage. It also represents increasing labor costs. Therefore, in order to develop international competitiveness, China needs to increase productivity. Technological progress and innovation becomes the key to high-quality economic development. Amidst the tremendous changes unseen in a century, the backlash against globalization will continue. Technology blockade and prohibition on sales have severely hindered the deepening and development of international division of labor, and reduced the opportunity for developing economies to narrow the South-North gap by virtue of the knowledge spillovers of developed economies.
Only by upholding the core position of innovation in China’s modernization drive, taking scientific and technological self-reliance as the strategic support for national development, adhering to the path of strengthening the country through science and technology, and giving play to the role of science and technology as the primary productive force, can we realize the vision of gradually shifting from a high-income country to a developed one. Technological innovation is the core of the new development pattern featuring dual economic circulations, the basis for ensuring the safety of the county’s industrial chain and supply chain, and the key to advancing the optimization of the county’s economic structure and making new achievements in promoting high-quality economic development.
The era of consumption upgrade is officially approaching
The fact that China’s per capita GNI is going to reach the standard of high-income countries means that the era of consumption upgrade is officially approaching, making it of more realistic significance to enhance the fundamental role of consumption for economic development. Therefore, we should continuously carry out supply-side structural reforms to provide diversified, high-quality products, and conduct effective demand-side management to stimulate effective demand potential and achieve a better match between supply and demand.
While actively expanding the middle-income group, we should vigorously implement the rural revitalization strategy and promote the building of a new socialist countryside, so as to increase the income of rural residents and narrow the urban-rural gap. Moreover, we should make a scientific regional development strategy to form a new pattern in the development of the western region and achieve new breakthroughs in the revitalization of Northeast China. We also need to make good use of the experience in the development of the southern region and the Yangtze River Delta to boost the economic development of the western and northeastern regions, lower regional disparity, and achieve relatively balanced development between the north and the south. Overall efforts should be made to increase residents’ income and demand levels, cultivate and create a large domestic market featuring coordinated development between urban and rural areas, relatively balanced development between the north and the south, and promote comprehensive consumption upgrade.
Take a more open attitude and adopt higher standards in international competition
The fact that China’s per capita GNI is going to reach the standard of high-income countries means that the country will take a more open attitude and adopt higher standards in international competition. History shows that it’s impossible for a country to become a great power through close-door policies. As China is about to enter the ranks of high-income countries, it will assume more responsibilities and obligations in international governance. The new development pattern featuring dual economic circulations aims for win-win results. Under the pattern, China will encourage foreign investors to participate in its economic construction and share with them the opportunities and benefits of the large domestic market according to the principle fair treatment. It will actively participate in the international division of labor, as well as the formulation of international economic, trade and investment rules. It will shoulder all the responsibilities of a major economic power to create a more transparent international economic environment featuring fairness and justice, and promote sound and orderly development of global economy.
As the Engel’s Coefficient drops, cultural consumption will increase
The fact that China’s per capita GNI is going to reach the standard of high-income countries means that the country will enter the key period with people’s demands shifting from material to spiritual needs. Currently, cultural consumption has become an important way to enhance national happiness. Statistics show that urban residents have an increasing demand for cultural experience such as increasing knowledge, improving self-cultivation, parent-child interaction and parenting. They are willing to pay for higher-level cultural experience. In 2019, the proportions of urban residents with spending on culture between RMB500 and 1,000, and above RMB1,000 are 37.27% and 22.83% respectively. According to the survey data in the first half of 2019, residents in northern and eastern China are more enthusiastic about cultural consumption, and account for a high proportion in the RMB1,000-1,500 and above RMB1,500 group. As the per capita disposable income of residents has increased, and the Engel’s Coefficient of urban residents (Engel’s Coefficient refers to the percentage of expenditure on food in the total consumption expenditure) has dropped significantly in particular, the household consumption expenditure on culture in China will continue to rise. More spending will be used to promote culture-related development, such as tourism, fitness, online and offline movie theaters. China’s per capita GNI is about to reach the standard of high-income countries, which means that it will forge ahead with a higher starting point, more urgent tasks and a clearer development vision.
(Author: Wang Jinbin, Professor, Deputy Secretary of the CPC Committee and Assistant Dean of School of Economics at Renmin University of China)