8% of GDP Growth Drives 1.3 billion People and Beyond

For the past twenty years with a few exceptions, China has been experiencing annual growth over 8% measured in GDP. This rate of growth has created wealth for millions of people and the country and lifted even more people out of poverty. For the most populous country with less than average natural resources per capita, it is nothing short of a miraculous feat. However, this growth has come with disastrous environment pollution.


(Oct 2013, Harbin, China, Source: http://www.theatlantic.com/china/archive/2013/10/air-pollution-has-shut-down-a-major-chinese-city/280743/)
The general agreement is that in pursuing economic growth, Chinese ignored the environmental consequences. My opinion is that one specific measurement or one number has been crucial in leading this development path. That is annual growth of 8% or more in GDP.
This number had been driving everything about a nation’s development. (Is it still? There are hopeful signs indicating that it will not be). Nothing else mattered. For thousands of local municipalities, that is their goal and only measurement of performance year in and year out. Hence, all public policies, strategies, and private investment were oriented toward this single-dimension and short-term number. Examples of investments that beefed up the growth in GDP included many short-lived transportation infrastructure projects and little-occupied housing.
Now, it is in the open air that this single number does not work anymore. It is certainly a very expensive lesson to learn the power of clear measurement.
Positive work has been initiated such as China’s reporting of air quality measurement and China’s carbon markets in several metropolitan areas (http://www.nytimes.com/2013/12/20/business/energy-environment/chinese-carbon-market-opens-to-a-busy-first-day.html?ref=environment&_r=0).

I believe that more will come and one of them is the right measurement!


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