GDP miracle results in per capita myth

Source:Global Times Published: 2009-12-9 2:08:44

By Chen Chenchen

Ordos (or Erdos), to most Chinese, is a brand of high-quality cashmere sweater, and not the remote city in China's Inner Mongolia.

The sweater's TV advertisement, with the familiar pitch, "Warm the entire world," takes us to the lush grasslands that have inspired eclogues and is home to the Khatag scarves, milk tea and some of the finest wines. Few would compare Ordos with Hong Kong.

However, an official did make the surprising comparison. Lian Ji, vice-chairperson of the People's Government of Inner Mongolia Autonomous Region, said Tuesday that "China develops fastest in the world, Inner Mongolia grows fastest in China, and Ordos grows fastest in Inner Mongolia. The per capita income of Ordos will soon surpass that of Hong Kong."

Lian's expectation was not entirely without a basis. Statistics show that the GDP of Ordos soared from $2.2 billion in 2000 to more than $29.3 billion in 2009, thanks to the exploitation of the region's rich natural resources. With a thin population of 1.6 million, the city's per capita income is predicted to touch $18,500 this year. Given Hong Kong's estimated per capita income of $29,600 in 2009, Ordos may manage the miracle of surpassing Hong Kong in a few years at current growth speed.

Sadly, no one in Ordos is celebrating yet. In the past eight years, the disposable income of city dwellers in Ordos grew at a lazy annual rate of 10 percent while the government's fiscal revenue expanded by 30 percent every year. Last year, a commoner in Ordos had only $237 to spend each month, less than one-fifth of a typical Hongkonger's disposable income. It seems that local residents haven't tasted the benefits of Ordos' economic miracle.

That is because of the way Ordos achieved its economic miracle. The city is a typical example of living off the fat of the land.

 

Since the beginning of this century, coal, rare earths, natural gas and petroleum reserves were discovered and processed in Ordos. The land where Genghis Khan once rode became industrialized overnight. Enterprises remarkable for high-energy consumption and heavy pollution mushroomed and flourished. Ordos grew rich, as the locals put it, "by digging holes in the ground and erecting chimneys in the air."

The result of the industrial development was paradoxical.

Some enterprises, with modern manufacturing facilities, hired few local employees. Instead they brought in skilled workers from other parts of China. These workers, who had families and hukou in their hometowns, did not spend or splurge in Ordos.

The residents lost large tracts of grassland due to excessive exploitation. Many gave up their original nomadic lifestyle, although some have not abandoned it. The migrants, without good training and education, are doing their best to survive as city dwellers whereas shepherds have become even poorer with the sheep suffering from neglect.

The Ordos model is replete with lessons. For most people in Ordos, the improvement in living standards was little or short-lived. The miracle itself is meaningless.

The GDP of Ordos surpassing that of Hong Kong, or even New York is, at best, a "figure" of speech. It foists the myth of per capita income on people who may have no income.
 



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