UN Resident Coordinator and UNDP Resident Representative
Ladies and gentlemen,
As we gather to celebrate the 40th anniversary of China’s Reform and Opening Up, what is the best way to capture the scope of China’s remarkable accomplishments of the last 40 years? What standard we should use to assess progress of the last four decades, both against China’s own past and against the track record of other nations?
Using new data, some not yet officially released by us, I’d like to take a look today at China’s development using an indicator that was designed precisely to answer this question: the Human Development Index.
This analysis shows clearly that the reform and opening up era has been about much more than economic growth. Reform and opening up have placed vastly greater financial resources at the disposal of China’s people and China’s government, and has given them access to new ideas, technology and global experience. These have all been applied, both by households and by government, to a highly successful effort to address the most central challenges in human development.
Let’s keep in mind that during these 40 years it is not only China that has changed. The world’s understanding of development has also changed. By 1980 there was growing recognition of many problems in relying on national income, usually measured in terms of Gross Domestic Product, GDP, as the primary measure of a country’s level of development. There was a sense that GDP was an incomplete and at times even misleading indicator; and that the real goal of development is not simply economic growth.
In response, in 1990 two great economists, Amartya Sen and Mahbub ul Haq, working on behalf of UNDP, devised an alternative, the Human Development Index, or HDI.
Sen and Haq’s great achievement was capturing in a simple indicator, using data that was available in virtually all countries, this recognition that income is not an end in itself, but is rather a means to an end.
The real goal of development is to enhance human capabilities, to allow people to lead good lives, to enjoy good health, to have the ability to acquire knowledge, and yes, to have enough income to maintain a decent standard of living.
The HDI, an equally weighted index of three sub-indices for per capita national income, life expectancy and education including both literacy and school enrollment rates, was first used in 1990 in the first Global Human Development Report, and since then it has gained widespread acceptance.
Using the HDI to analyze China’s progress since Deng Xiaoping and his colleagues launched the reform and opening up era in 1978 reveals many striking findings. In this analysis I will be drawing on data from two new sources; the 2018 Statistical Update to UNDP’s Human Development Indices and Indicators Report, just released two weeks ago in New York, and UNDP’s new 2018 China National Human Development Report, not yet launched but in the final stages of preparation.
Where was China in 1978 in terms of human development? Since the HDI had not yet been created there are no official UN data to compare China’s HDI at the start of reform and opening up with the rest of the world. However the Tsinghua University authors of the new China NHDR, working with our office, have calculated China’s 1978 HDI as 0.41. Held down by China’s very low per capita GDP, 18th from lowest in the world, China was squarely in the ranks of the world’s low Human Development countries.
However even in 1978 China’s life expectancy and education indices were higher than those of most other countries with similar per capita GDP. China was very poor, but a foundation of human capital had already been laid that created favorable conditions for rapid development.
Through the forty years of reform and opening up the evolution of China’s HDI has followed a remarkable path; income has risen rapidly, but the other components of Human Development have risen strongly as well.
- In 1990 China was still a low HDI country, but HDI had climbed to 0.501, putting China #103 in HDI out of 144 countries in the first global HDI table. 65.85% of that increase was from the surge in income following reform and opening up.
- By 2000 China’s HDI had climbed to .594, #111 out of 172 countries. China had now entered the ranks of middle HDI countries.
- In 2010 China’s HDI was .706, and China ranked 99 out of 188 countries.
- Latest UN data show that in 2017 China’s HDI was .752, 86 out of 189 countries. China’s HDI is now approaching .8, the High Human Development threshold. From 2010-2017 43.7% of China’s improvement in HDI came from improvements in education, a clear reflection of China’s refocusing of policies in recent years from speed of growth to quality of growth.
Since 1978, China’s HDI has increased by an average of 1.6% per year, an extraordinary achievement. The handful of other countries with comparably rapid HDI growth all started much lower and are still much lower than China. This improvement in HDI reflects some of the greatest strengths that China utilized in crafting its path through the reform and opening up era. Development planning has been comprehensive and broad, not just focused on one goal such as GDP but taking a full set of key challenges into plans and policies.
Inclusiveness has also been a priority; GDP growth was rooted in policies that allowed all of China’s population to share in it, through providing access to social services, markets, infrastructure.
Of course, China still has some distance to go to catch up with high human development countries, and especially the 58 countries who are classified as very high human development countries. But here is an interesting fact: since the first global report in 1990 China has risen past 31 countries whose HDI was higher than China’s then. Not one country in the world that was ranked below China in 1990 has overtaken China.
Given the government’s ever greater emphasis on quality of life as its central goal, rather than speed of growth, I am confident in predicting that before China becomes an upper income country it will become a High Human Development Country. That will be another moment to celebrate in China; we at UNDP will host the event!
As China looks forward to more decades of development we should note that the many innovations in the HDI that have been created, to supplement it by reflecting new challenges that humanity faces. There is an inequality-adjusted HDI reflecting development gaps between population groups. Although the Chinese government is rightly focusing a great deal of attention today on reducing inequality, China’s global ranking in the inequality-adjusted HDI is 81, already higher than its basic HDI ranking. There is also a Gender Development Index, the GDI, which compares male and female HDIs. China falls into the second group of countries in terms of GDI, just as it is not yet in the high HDI group.
As the world pursues the 2030 Sustainable Development Agenda there is an active global discourse about refining our indicators for measuring development, including proposals to incorporate environmental issues. I hope that all present here today will actively join in that discussion, as China’s remarkable achievements and equally remarkable goals for further development can both benefit from and contribute greatly to it.
Still, the HDI will not be easy to replace, as a clear, understandable and far better alternative to GDP as the yardstick by which we measure development. I am delighted to congratulate our Chinese friends and colleagues today for China’s extremely impressive progress in broad human development since Deng Xiaoping and his colleagues launched reform and opening up in China in 1978, and to promise our support to your efforts to achieve even greater results for China’s people in the future.
As delivered on 27 September 2018, in Shenzhen