Common prosperity takes center stage

China offers new path to modernization

By Victor Meijers

Europe's modernization has been ongoing for decades, even centuries. However, European modernization, like the United States' modernization, has focused on economics, economics and… economics. The entire concept of the European Union is an economic market.

The predecessors of the EU were based upon the principle that a sound economy will bring peace and prosperity to all. Hence, all of their energy was focused on the economy, with the expectation that citizens would do the same.

In my country, the Netherlands, people are coming to realize that their leaders were more interested in pumping out natural gas in a remote province than in the safety of the simple people living there. To most people's surprise, the CEOs of giant corporations such as Shell and Exxon Mobil, as well as top Dutch politicians, including the Netherlands prime minister, were not too concerned about earthquakes in the region.

The public-private joint venture company that split the profits from this natural gas — 90 percent to the Dutch state and 10 percent to Shell and Exxon Mobil — considerably increased the volume of gas to be extracted after the first serious earthquake. This was despite very clear warnings from experts that the volume should be reduced, not increased, to prevent quakes.

The huge sums (an eye-watering€363.7 billion or $357.12 billion) the Netherlands state profited from extracting gas were not used to create a sovereign wealth fund as in Norway or Abu Dhabi of the United Arab Emirates. The cash was invested to modernize the Netherlands. Housing, roads, hospitals, industries, farming, education, state pensions for all were modernized at great cost. Incidentally, the Dutch government forgot to compensate the inhabitants of the actual region where the gas was found.

The idea to invest in society is good. There was never a vote or a congress on this strategic national issue: leaders at that time boldly tried to let the whole society leapfrog forward, including pensioners and students.

The lack of discussion on the topic made people unaware of our national strategy based upon the bonus gas income. Somewhere in time, it was forgotten that our position as a developed country was not a right from the Gods. The Dutch were simply lucky to find this huge deposit of fossil fuel. The Netherlands' top-tier position was not cherished or guarded, rather taken for granted.

That was a mistake, because the gas income is now history. Drilling and pumping gas has become too dangerous even in that "backward" region. After criticizing southern states for spending too much in relation to their respective incomes, the Dutch may soon find themselves in similar dire straits.

China is already a top-tier country and may soon be the No 1 country in many economic and financial respects. It is smart to learn from the mistakes made by others. It is also smart to publicly discuss national strategies, which in a way happened at the 20th National Congress of the Communist Party of China. People should be made aware of the direction the country is taking. A top-tier position in the world should not be taken for granted, even though in China's case this ranking is nothing new when looking back the past millennia.

The most interesting circumstance for me is that Europeans carried out their modernization as developed countries. China is making the change from a developing country to a developed country at the same time as addressing modernization.

Because of this, China is able to skip some in-between phases. It has been at the forefront of mobile phone development and use, because many consumers have jumped straight from no phones to smartphones, skipping land lines. Therefore, it is natural for them to use WeChat for everything, including financial transactions.

Europe's in-between phase of modernization can be described as an "economic reality" phase. The economic reality phase shows that more stakeholders in society need to be considered rather than only those providing capital. This phase was probably necessary after brutal capitalist phases in the 18th and 19th centuries.

At that time, Europeans even sold people into slavery to make profits. Now, slowly, Europeans are starting to think about the importance of harmony with nature and common prosperity, as well as transferring some riches from the Global North to the Global South. It can be a big leap for China if it focuses on objectives, rather than economics, in its modernization policy.

The opportunity here is to skip the economic reality phase. China's history and culture are different from Europe's. Europeans today are caught in the trap of economic percentages, like a small shopkeeper unable to think bigger. Of course, economic growth is important as a means to achieve goals. But the economy is not the ultimate objective. The well-being of the people, social stability, respect for nature and Chinese traditions, good relations with other countries, rule of law as well as vigilantly safeguarding its top-tier position are the right goals that China has set.

The author, a foreign exchange scholar at Tsinghua University from 2012 to 2015, is a civil law notary at The Hague. The views don't necessarily reflect those of China Daily.