China Modernization Report 2005
¡ª¡ªA study on the economic modernization
modernization is not only an important factor but also a basic and driving
power of modernization. That is to say, no economic modernization, no real
modernization. In the past three hundred years, economic modernization is
a main content in the change of world economy, every country has great
different performance and the world economic center has changed. In fact,
economic modernization is a global revolution and competition in economic
field. Economic modernization includes not only economic growth,
industrialization and knowledgization,
but also the changes of the frontiers of world economy, the gap of
international economy and so on, economic modernization is an integrated
former four reports of China Modernization have systematically
discussed the concept of modernization at national and regional level. In
this issue we will focus on the facts and principles of world¡¯s economic
modernization as well as its revelations.
Facts and revelations of
world¡¯s economic modernization in the past 300 years
this issue, we analyze the economic modernization of the world in the past
three hundred years (1700-2001) by cross-sectional study and time series
study, including economic efficiency, structure, institution and idea, and
mainly analyze the trends, frontiers, international gap and roads in
economic field. There are 15 countries (8 developed countries and 7
developing countries) analyzed by time series study and 130 countries analyzed by
cross-sectional study. Also we have concluded 26 facts and 14 revelations
of world¡¯s economic modernization.
14 inspirations of world economy modernization
modernization is comparatively expectable.
modernization is a kind of revolution.
Economic modernization needs a long time.
Economic modernization is a complex process.
Economic modernization isn¡¯t in balance.
Economic modernization has possibility of stagnation, interruption and
Economic modernization involves every country in the world.
Economic modernization is a process of divergence of economic
Economic modernization is a process of convergence of economic structure.
Economic modernization is a progressive process.
Economic modernization is full of risk.
Economic modernization is not thoroughly a spontaneous process.
Economic modernization can be analyzed quantitatively.
Theories and methods of world¡¯s economic modernization
Classic economic modernization theory
economic modernization theory, as an important branch of classic
modernization theory, was advanced in 1950s to 1960s. The publication of
¡°The Stage of Economic Growth ¡± (Rostow, 1960 ) marked the
birth of the theory.
economic modernization describes the great changes in economy field since
Industrial Revolution in the 18th century, including the
industrialization, increasing of productivity and continuous
intensification of international economic competition. Classic economic
modernization is a historical course affected by politics and culture, and
also interacts with social modernization, It was restricted by science,
technology and international relationship.
main results of classic economic modernization are: the transformation
from traditional agricultural economy to modern industrial economy,
formation and distribution of market economy ideas, widely application of
modern science, technology and energy resources, industrialization and
specialization of economic activity, mechanization and electrization of
production system, increasing of industrial proportion and decreasing of
agricultural proportion, continuous improvement of economic efficiency,
economic welfare and equity.
General economic modernization theory
the end of 20th century, world¡¯s economic frontiers have
changed greatly, more and more new economic ideas have appeared. These
changes take place in every aspect of economy field, especially in
economic structure, main technique and main industry. In economic
structure, the main change appeared
as from industrialization to de-industrialization. In main technique, the
as from industrialized, standardized technique to information
and greening technique, and in main industry, the change appeared
as from industry to knowledge and information industry, from agriculture,
industry to service and other new industry. The classic economic
modernization theory can¡¯t explain these changes. Prof He Chuanqi, a
China scientist, has applied the ¡°Second modernization theory¡± into
economic field, and proposed
the general economic modernization theory, which extends the classic
economic modernization theory.
General economic modernization theory.
economic modernization is the great changes in economic field since the
industrial revolution in 18th century, which includes the
transformation from agriculture to industrial economy and then from
industrial to knowledge economy, continuous increasing of productivity and
national income, great improvement of economic welfare and equity£¬and
change of competitive status in the world economy. General economic
modernization is a historical course with 12 features and 6 principles,
and comprises the first and second stages of the economic modernization
from the 18th to 21st century. It is also a constant
international competition, including the international competition whereby
different countries and regions pursue, reach and maintain the world
advanced level of the economy.
model of general economic modernization includes: economic timetable,
table, coordinate system, road map, quantitative model and dynamic model of general economic
modernization. There are three targets in general economic modernization
process, which are to complete first economic modernization, to complete
second economic modernization, and to reach and maintain the advanced
level of the world economy.
driving force of general economic modernization includes four, which are
of economic growth, the pull of demand change, the pressure of
globalization, and the gravitation of reasonable anticipation. To be
concrete, they are the increase of knowledge, social capital, material
capital, human resource, ecological consciousness and knowledge
consumption, as well as economic structure change and international
roads and models of general economic modernization are diversity, which
are the path-dependence and are affected by the history, geography and
external condition. In the 21st century there are three basic
roads: first economic modernization, second economic modernization and
comprehensive economic modernization.
Second economic modernization theory.
is the second stage of general economic modernization. In general, second
economic modernization is the results of knowledge revolution, a
revolutionary change of economic field since 1970s, which includes
knowledgization, informatization, greening and globalization of national
economy, increase of productivity and national income, improvement of
economic welfare and equity, as well as change of the status in the world
economic modernization is a historical process, which has the 12 features
and follows the 6 principles. The result of second economic modernization
includes the transformation from industrial to knowledge economy, the
coordination of economy with ecology, improvement of economic
competitiveness in the world, change of world¡¯s economic center and so
driving force of second economic modernization includes the improvement of
knowledge, information, ecological consciousness and knowledge
consumption, the change of economic structure and international
competition, and so on. Knowledge innovation and economic institutional
innovation is the origin of the driving force. There are many different
routes and models in second economic modernization and the model is
changing in different stages, such as information economy model,
ecological economy model, bio-economy model and experience economy model
Comprehensive economic modernization theory.
a basic path of general economic modernization in the 21st
century. It is a process to catch up and reach the world advanced level of
the economy for the development countries, which includes the development
of new industrialization, knowledgization, greening and globalization, and
the transformation from new industrialization to knowledgization, from
agricultural to industrial and knowledge economy, continuous increase of
productivity and national income, the improvement of economic welfare and
equity, as well as the economic competitive status in the world.
economic modernization needs to coordinate in
first and second economic modernization, paying equal attention to new
industrialization and informatizaton, de-industialization and
knowledgization and greening etc.
III. Strategic choice for China¡¯s economic modernization
the past 300 years of economic modernization, what had changed were not
only the content of world¡¯s economy, but also the distribution of
fortune. 300 years ago, just before world¡¯s economic modernization,
China was still the world¡¯s fortune center, perhaps one of world¡¯s
economy centers, the other was the emerging Europe. When industrial
revolution was changing Europe¡¯s economy, China was still dwelling on
the dream of ¡°powerful country¡±. The 300 years of world¡¯s economic
modernization is the success and prosperity of Europe and North America,
and the period of declining and reviving of China¡¯s economy. During the
last 20 years of the 20th century, China¡¯s economy began to
increase continuously, which was outstanding in the world. Though the
increase rate of China¡¯s GNP per capita was high, there was still great
gap from the world¡¯s advanced level and the gap was being enlarged, just
because China¡¯s GNP per capita was very small in the past, and the
increase value per year was still small.
realize modernization is our unalterable target. According to the ¡°Three
step¡± strategy advanced by Deng xiaoping, in 2050s, we will reach the
level of moderate developed countries. At the end of 21st
century, we will reach the level of developed country. To realize
modernization in the 21st century, we must realize economic
modernization. And to realize economic modernization, to reach the
world¡¯s advanced level, we should carry out more research on economic
strategy. In our opinion, the canal strategy coordinating the first and
second economic modernization can be considered. Using this strategy, we
anticipate our country¡¯s economy modernization will enter the top 40
countries in the world in 2050, and enter the top 10 countries at the end
of the 21st century.
Opportunity and Challenge
the first 50 years in the 21st century, China¡¯s economic
modernization will face many opportunities, such as:(1) Opportunity from
economic informatization and globalization. (2) Opportunity from
bio-economy and ecological economy. (3) Opportunity from experience
economy and cultural economy.
are a lot of challenges, such as: (1) Continuous and rapid increase of
productivity. (2) Change from tripartite economy to knowledge economy. (3)
Agricultural modernization. (4) Continuous supply of resources and energy
as well as maintenance of finance stability. (5) Ecological modernization,
coordinate of ecology and economy. (6) Harmonious development of regions.
(7) Balance the urban and rural area. (8) Improvement of the labor
quality. (9) Improvement of national innovation ability and efficiency.
(10) Attendance of globalization and maintenance of country¡¯s interests.
Quantification of the target and road
strategy of China¡¯s economic modernization in the 21st
century, there are different opinions. From the point of modernization
research, economic canal strategy and roadmap of China¡¯s economic
modernization can be a reference for making the economic modernization
of China¡¯s economic modernization is an integration of canal strategy
and road, which includes canal strategy, basic objective, basic mission,
monitoring indicators, economic quality and structure monitoring etc.
canal strategy: To adopt the comprehensive economic modernization theory,
to coordinate and accelerate the first and second economic modernization,
new-industrialization, knowledgization, greening and globalization, and to
accelerate the transformation from new-industrialization to
knowledgeablization, from first to second economic modernization, and
finally accomplish second economic modernization, reach the advanced level
of world¡¯s economic modernization.
economic canal strategy demands the coordinative development of
industrialization and agricultural modernization, environment protection,
informatization, globalization, high tech and appropriate tech industries,
industrialization and de-industrialization, and take the high-quality,
greening new-industrialization road to realize the transformation from
industrialization to knowledgization, from industrial economy to knowledge
quantitative objective of China¡¯s economic modernization: To complete
first economic modernization, reach the moderate level of world¡¯s
economic modernization and enter the top 40 countries in the world¡¯s
economy before 2050. During the latter 50 years of the 21st
century, to complete second economic modernization, reach the developed
level of world¡¯s economic modernization, and enter the top 10 countries
in the world¡¯s economy.
to finish the quantified objectives: The international level of China¡¯s
economic modernization should go up 3 steps, the historical process should
go through 6 stages, and the rank of China¡¯s economic modernization in
the world will advance 60 positions.
the details, about the level, China should upgrade from the less developed
country to the primary developed country in economy around 2020, the
moderate developed country around 2050, the developed country around 2080,
and leap into the frontier ranks of the developed country before 2100.
historical process of China¡¯s economic modernization will enter the
mature period of first economic modernization about 2020, the transition
period of first economic modernization about 2030, the start-up period of
second economic modernization in 2040, the developing period of second
economic modernization in 2050, the mature period of second economic
modernization about 2080, and enter the transition period of second
economic modernization about 2090.
rank of China¡¯s economic modernization in the world should advance about
30 positions before 2050s, and about 30 positions in the latter 50 years
of 21st century.
quality and structure monitoring. The economic quality monitoring includes
3 groups: economic efficiency, economic progress and economic
infrastructure. The economic structure monitoring includes 3 groups:
change of economic structure, circulation and distribution structure, as
well as coordinative development of economy. There are 6 indicators in
each of the groups, totally 36 indicators. Before the 2050, these
indicators in China should reach the level of moderate developed country
in the world.
Suggestion on accelerating China¡¯s economic modernization
the first 50 years of 21st century, there are three
bottlenecks, which are economic quality, economic structure and
international economic competitive power. In our idea, China¡¯s economy
should focus on economic quality and structure, especially economic
quality, at the same time improve the international competitive power
accelerate China¡¯s economic modernization, we advance ten suggestions
(1) To develop roadmap of economic modernization for our
country and different regions.
(2) To focus on economic quality, realizing two strategic
changes of the economic development model and improving labor quality
completely before 2050.
To complete new-industrialization and informatization, realizing the 6
changes of industrialization pattern before 2030.
To complete modernization of economic infrastructure before 2030.
Advance the strategic changes of our economic structure, complete the
reform of the industrial structure and the ten industries.
Advance the regulation of circulation, consumption and distribution system
continuously, and improve the fairness of the income distribution.
To control and reduce the economic imbalance, and improve the economic
To enhance the macro-basis of the international economic competition. We
proposed to edit the state economic law codes, constitute Information
Transparency Act, and establish evaluation center of state economic policy
and state small business service agency etc.
To cultivate the micro-basis of the international economic competition. We
do need to cultivate and improve company¡¯s international competitive
power, carry out theory study of international economic competition, and
train millions of enterpriser in 5 years.
Improve international competitive environment for Chinese corporation.
The 50 years of economic modernization
former analysis is based on single indicator, which can¡¯t state economic
modernization completely. To grasp the whole trends and reality, we should
assess world¡¯s economic modernization. So we constitute the economic
modernization model, including the assessment of first economic
modernization, second economic modernization and comprehensive economic
modernization, the assessment result is ¡°economic modernization
The 50 years of economic modernization in the world
The level of world¡¯s economic modernization in 2002
have assessed 131 countries in 2002, and found that there were 24
countries finished first economic modernization, accounting for about 18%
of the all samples, and 18 countries entered the period of second economic
modernization, about 14% of the all.
to second economic modernization index, there were 18 economic developed
countries, 9 economic moderate-developed countries, 24 economic primary
developed countries and 79 economic less developed countries.
to second economic modernization index in 2002, the first 10 countries
were the United State, Switzerland, Norway, Denmark, Sweden, Netherlands,
Japan, French, England and Belgium. Among them, the first 8 countries¡¯
index had exceed 100, and 6 countries had entered the stage of second
economic modernization, which are America, Netherlands, French, England
and Australia. These countries represented the frontier level of world¡¯s
Main features of world¡¯s economic modernization in the past 50 years.
the last 50 years of the 20th century, the direction of
world¡¯s economic modernization had changed greatly, such as the
transformation from industrialization to de-industrialization in developed
countries, and the number of country finished first economic modernization
increased from 1 to 24, and the number of country entered the period of
second economic modernization increased from 0 to 18.
the past 50 years, performance of economic modernization of different
country was greatly different in the world. From 1950 to 2002, 21
countries had upgraded such as Japan, and 6 countries had downgraded such
as Venezuela. From 1960 to 2002, there were 15 countries whose economic
status had upgraded and 5 countries downgraded. Therein, Japan, Singapore
and Korea¡¯s status had gone up 2 steps.
the past 30 years, growth rate of economic modernization were greatly
different in the world, international gap of economic modernization was
widening. From 1970 to 2002, 36 countries¡¯ first economic modernization
index decreased, such as Argentina, and 10 countries¡¯ second economic
modernization index decreased, such as Zambia. If maintaining the average
annual growth rate of the period from 1970 to 2002, it will take about 85
years to complete first economic modernization for the medium-income
countries, about 53 years for the world averagely.
The 50 years of China¡¯s economic modernization
Features of China¡¯s economic modernization during the last 50 years
1950 to 2002, China¡¯s first economic modernization index had increased
from 7 to 22, and the rank had risen from 75th in 1960 to 64th in 2002 in
the world, economic modernization had shifted from traditional
agricultural economy to the developing period of first economic
modernization. From 1970 to 2002, China¡¯s comprehensive economic
modernization index had increased from 12 to 16, and the rank in the world
had risen from 92nd to 69th.
past 50 years, there is an interruption from 1960 to 1980. During this
period, China¡¯s first economic modernization index had decreased and the
rank downgraded. From 1980 to 1990 China¡¯s economic modernization began
to recover, and after 1990 it began to increase rapidly.
China¡¯s economic modernization in 2002
belonged to less developed countries in 2002, the gap between China and
the world¡¯s advanced level was great. China¡¯s first economic
modernization index was about 22 in 2002, ranking the 64th
among 108 countries in the world; the second economic modernization index
was 17, ranking the 68th ; and the comprehensive economic
modernization index was 16, ranking the 69th . In 2002, Chinese
economy was in the developing period of first economic modernization, just
as the middle of industrialization, and the economic modernization level
was below the world¡¯s average.
keep the average annual growth rate of first economic modernization index
between 1990 and 2002, it will take about 28 years (before 2030) to
complete China¡¯s first economic modernization. If keep the average
growth rate between 1980 and 2002, it will take about 47 years to complete
China¡¯s first economic modernization.
China¡¯s regional economic modernization in 2002
2002, China¡¯s Hong Kong, Macao and Taiwan had completed first economic
modernization, Hong Kong and Macao had entered the period of second
economic modernization, and Hong Kong was developed level in economy,
Macao and Taiwan was moderate-developed in economy, Beijing and Shanghai
was primary developed and others were less developed.
2002, excluding Hong Kong, Macao, Taiwan, Beijing, Tianjin and Shanghai,
the provinces whose first economic modernization indexes were in the first
10 regions were Zhejiang, Jiangsu, Guangdong, Liaoning, Fujian, Shandong,
Heilongjiang, Hebei, Hubei and Jilin; and the provinces whose
comprehensive economic modernization index is in the first 5 regions were
Guangdong, Zhejiang, Fujian, Jiangsu and Liaoning. Zhejiang, Guangdong,
Jiangsu, Fujian and Liaoning are relatively developed regions, located in
2002, the average gap between our 34 provinces and the world¡¯s advanced
level: average gap of first economic modernization index was 69; average
gap of comprehensive economic modernization index was 75.
The global modernization index in 2002
issue has complete the assessment of world¡¯s and China¡¯s modernization
in 2002. There were 68 countries had finished or had almost completed the
first modernization, and among them, 23 countries had entered the second
modernization, 1n 2002.
2002, China was still a primary developed level country, the extent of the
realization of first modernization is 82%, ranking the 60th among the 108
countries in the world. The second modernization index was 32, ranking the
56th in the world.
2003, the extent of the realization of China¡¯s first modernization was
82%. Excluding Beijing, Tianjin, Shanghai, Hong Kong, Macao and Taiwan,
the provinces whose realization of first modernization were in the first
10 regions were: Zhejiang, Liaoning, Jiangsu, Guangdong, Heilongjiang,
Hubei, Chongqing, Jilin, Fujian and Shandong.
Study Task Team on China¡¯s modernization strategy
China Center for Modernization Research, Chinese Academy of Sciences