By: The Middle East Times

3 DECADES OF REFORM — Three girls pose as the girls in the photograph to take a picture at an exhibition showing the change of China in the past 30 years in Beijing on Dec. 16. The photo exhibition named “30 Years Of Daily Life” is held to mark the 30th anniversary of China’s reform initiative. (Photo by ChinaFotoPress via Newscom)

Thirty years ago this week, the history of the world changed gear when Deng Xiao Ping launched the economic reforms that began the extraordinary growth of modern China and the strange hybrid of Communist Party rule and capitalist enterprise.

Under the raw statistics of gross domestic product, China is now running equal third with Germany as the world’s third-largest economy, after the United States and Japan. Under the World Bank’s purchasing power parity reckoning, China is already the world’s second-largest economy.

But the World Bank’s personal income figures reveal what those 30 years have meant for so many of China’s 1.3 billion people. Personal income has leaped from $293 per head per year to $2,025. Hundreds of millions of people have been hauled out of abject poverty and into the new world of prosperity and possibilities where they can hope to own a home and a car, to travel and save and start a business and to chart their own destinies.

Few countries have ever made such leaps in the short space of time of a single generation.

But we all know the daunting challenges that lie ahead, that China must tackle its environmental damage, its water shortages, its lack of arable land and also overcome the immediate economic crisis of the global recession.

On Monday this week, we learned that China’s electricity output fell during November by 9.6 percent from a year ago to just over 254 billion kilowatt-hours. A key indicator of economic activity, this was the second consecutive monthly decline and the largest fall on record. Other data pointed to a 3.5 percent fall in demand for crude oil during the month.

On Thursday, Beijing’s official purchasing managers’ index declined to 38.8 in November, from 44.6 in October. Any figure under 50 indicates a contraction in economic output, so the prospects are now that China’s GDP growth next year could well shrink to 5 percent or less, after the record 12 percent in 2007.

The great French historian Alexis de Tocqueville noted of the storming of the Bastille in 1789 that revolution comes not when conditions are at their worst but when they have been steadily improving, and the improvement suddenly stops. That now looms as China’s new challenge, according to a leading Party scholar, Zhou Tianyong of the Central Party School in Beijing.

“The redistribution of wealth through theft and robbery could dramatically increase and menaces to social stability will grow,” he suggests in the latest issue of China Economic Times. “This is extremely likely to create a reactive situation of mass-scale social turmoil.”

Other countries face similar dangers as the American mortgage crisis and the Wall Street credit crunch metastasize into a global recession. But the dashing of China’s hopes and the crashing of hundreds of millions of individual Chinese dreams may be the most serious outcome of all, testing the Communist-capitalist hybrid of China’s government to the limit in the coming new year.