The Untold Cost Of Chinese Economic Growth

Over the last two decades, China underwent enormous economic growth. Household consumption nearly quadrupled. Millions of people left poverty. And the country was hailed the new Asian tiger, poised to overtake the United States as the largest economy in the world.

But while economic statistics tell one story about China, a new study published by the Brookings Institution reveals a more sobering narrative about the country’s growth. The study shows that while China burgeoned, the people who stood to gain the most were often deeply unhappy.

Carol Graham, a senior fellow at the Brookings Institution, talks about this phenomenon in terms of “happy peasants” and “frustrated achievers.” The peasants in China who live out their lives in rice paddies and wheat fields are generally content with their existence. Meanwhile the achievers—the socially mobile professionals and middle class workers driving economic development in China—are often frustrated with their lot in life, as they reach for ever more professional success and fall short.

“Rapid levels of economic growth tend to come with inequality,” Graham says. “Even if you’re doing okay, there are a lot of people around you doing better, and that frustrates you.”

When China started to expand its economy, during the nineties, building factories and skyscrapers that now loom over the skylines in Beijing and Shanghai, more and more people moved to those cities, seeking economic opportunity outside the rice fields. They were vaulted from peasants to achievers saddled with all the insecurities that come with living in the modern age.

Suicide rates rose, and mental health disorders became increasingly prevalent. During the nineties, China had one of the highest suicide rates worldwide. About 23 people in 100,000 committed suicide every year between 1995 and 1999. Compare that to the United States, where only around 12 people in 100,000 committed suicide in 1995. Ten years later the number of people suffering from mental health disorders in China was also dramatically increasing. In 2011, around 27 million people visited hospitals as outpatients seeking mental health treatment.

Those statistics speak to a broader trend in global development. “Upwardly mobile respondents in growing developing economies reported lower levels of satisfaction with their lives than very poor respondents with no change in their income levels,” authors Graham, Shaojie Zhou, and Junyi Zhang wrote in their paper.

These trends go against a basic widely held idea about economic development—that greater wealth and higher life expectancies yield higher levels of happiness.

That may be true in the long run, Graham says, but economic development in its early stages can produce very different results. Achievers are often deeply insecure about their ability to keep pace in a rapidly changing economy. They are also troubled when they see the growing economic inequality that comes with an economic system that suddenly creates winners and losers.

“In a way it’s a classic development story,” Graham says. “People move out of poverty and they become more aware both of what they can achieve and what they can’t.”

This is a tale as old as time. The Russian novelist Leo Tolstoy wrote in Anna Karenina about happy serfs during the nineteenth century who labored away threshing wheat in the countryside, while the aristocracy, living in Russian metropolises, remained unhappy. That same dynamic now seems to be playing out in China as the country industrializes.

Graham, however, thinks that these trends may settle down as China becomes more comfortable with its economic transformation. According to her, people are already showing higher levels of happiness than 20 years ago.

And yet, she says, there are still fundamental problems in China: “The quality of life is awful. The pollution is awful. It’s crowded, and people work very long hours. Even the Internet is not completely free. For young people who are aware of what the rest of the world is like, that’s a downer.”

 

Text: Forbes by Laura Reston 02-07-2015

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s