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Streamlining Administration
Special> 65th Anniversary of the People's Republic of China> Transformative Reforms> Streamlining Administration
UPDATED: September 1, 2014 NO. 36 SEPTEMBER 4, 2014
Letting Go of GDP
Diversified evaluators have been introduced to assess local officials' performance amid growing ecological concerns
By Wang Jun

Incorporated into the province's agricultural and ecological zones, Anxi is numbered among the 34 counties and cities of the province that will not be evaluated on GDP growth. This means the most important task for local officials will be ecological protection.

Liu felt that he has a greater responsibility. He believed emphasizing ecological protection instead of GDP growth will make local government officials focus on indicators of environmental protection, such as forest coverage and per-capita area of afforested land.

To protect the environment, Anxi has paid a heavy price. In 2011, all of the county's 630 stone material factories were closed, which reportedly incurred a loss of 2 billion yuan ($324 million) in the county's GDP and 150 million yuan ($24 million) in fiscal revenue. But the resulting environmental protection has helped the county attract some big projects in the photovoltaic industry.

Once a poverty-stricken county, Anxi has now taken its place as one of the top 100 counties in the country in terms of economic power. In the first half of this year, the county's GDP reached 16.7 billion yuan ($2.71 billion), rising 11.4 percent year on year.

"With government performance no longer being evaluated in terms of GDP growth, we will be able to spend more time and effort adjusting our industrial structure, and we will no longer go down the path of addressing the problem only after the damage caused by pollution has been done," Liu said.

Although Fujian has announced its decision not to gauge 34 local governments' overall performance on GDP growth, it has not yet formulated detailed alternative policies on how it will measure their achievements.

Liu thinks since the government at higher levels has shifted the focus of work to ecological protection, they should allocate more administrative resources and powers to environmental protection departments. Otherwise, he claimed, this policy will not have the desired effect.

Ecological GDP

"GDP calculation is an indicator with a history of more than 100 years. It is unrealistic to completely abandon the measure," said Wang Jinnan, Vice President of the Chinese Academy for Environmental Planning.

"We hope 'ecological GDP' can replace conventional GDP," said Wang Bing, a researcher with the Chinese Academy of Forestry. At the end of 2012, he proposed the concept of "ecological GDP," a system in which environmental degradation and resource consumption are deducted from conventional GDP and ecological beneficial activities, such as conservation of water resources, are added.

An earlier concept was "green GDP," proposed by Wang Jinnan and his team in 2004, which deducts resource depletion and environmental losses from the conventional GDP. Wang Jinnan said this statistical method still needs improvement.

Another potential indicator is "gross ecosystem product" (GEP), which was jointly introduced in 2013 by the International Union for Conservation of Nature and the Elion Green Foundation. The GEP will measure the gross product of both natural and artificial ecosystems—including forests, deserts, wetlands, farmlands, pastures and aquaculture farms—and corresponds to the gross domestic product of the area.

All three of the proposed indicators combine economic growth with ecological costs, and all have received the support of local governments across China.

An article in International Financial News revealed that Heilongjiang and Jilin provinces in northeast China now calculate their ecological GDP, while GEP has been adopted by Guangdong Province in the south. Guizhou in southwest China has been designated as a province for the research of GEP.

Email us at: wangjun@bjreview.com

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