Economic growth hasn’t brought real wellbeing in China

China is one of the key global producers and  has the world’s second-largest economy. Yet, with air and water pollution at record levels, many wonder: Has rampant economic growth actually been good for the country?

Scientists from Stanford University and Beijing have set out to explore the question and their findings are rather alarming. The researchers found that despite continued economic growth, the improvement in real wellbeing in China over the last two decades has been around twice slower than the growth of GDP.

Moreover, in recent years, some of the provinces have even seen a decline in wellbeing, despite high growth levels. Only some of the less vibrant provinces, such as Heilongjiang and Jiangxi, have shown a close correlation between wellbeing and GDP levels.

To measure the progress towards a sustainable economy, the team relied on the Genuine Progress Indicator (GPI). The index was designed to measure real economic well-being instead of simply adding up consumption, investment and spending, as indicated by GDP. Since its first release in the 1990s, GPI has been calculated for a dozen countries and often used to improve decision-making on local and regional levels.

This has been the first comprehensive GPI estimate for China, featuring individual scores for each of its 31 provinces. The GPI score provides a single monetary value that can be broken down into components like personal expenditures, inequality levels and time spent on leisure, among 20 other factors. GPI is also sensitive to impacts of climate change, pollution and resource depletion. Thus, if the costs of water pollution or crime go up, the GPI score does not rise.

Due to factors like water pollution and carbon emissions the real wellbeing of the country’s population might soon diminish even more, no matter how high economic indicators get. The findings underline another recent study, which highlights the direct impact of pollution on people’s overall happiness.

Along with critical insights, the researchers conclude that GPI for almost every province in China can improve with well-tailored strategies regarding the weakest aspects of the score. For example, provinces like Liaoning and Shanxi might benefit from improved environmental regulations, while those with high levels of inequality might need more efficient welfare distribution policies.