China’s ‘rejuvenation index’ greeted with derision

November 22, 2013 11:28 am

China’s ‘rejuvenation index’ greeted with derision

By Jamil Anderlini in Beijing

Chinese president Xi Jinping has pledged to reduce the role of central planning in the economy and usher in the “great rejuvenation of the Chinese nation”, but the unveiling this week of the country’s latest ‘rejuvenation index’ has been greeted with derision by many ordinary people and online commentators. By the end of 2012, the Chinese nation was 65.3 per cent rejuvenated, according to the index published by the Social Development Research Centre of the National Development and Reform Commission, China’s powerful state planning agency.That was an enormous improvement on the 46.4 per cent recorded in 2005 and steady progress from 2010’s 62.7 per cent level, according to Yang Yiyong, director of the research centre and the main author of the rejuvenation index.

But Fenyi, a popular online commentator with more than 110,000 followers on China’s twitter-like Weibo service, scoffed: “Most people can’t afford to buy a house, see a doctor when they’re sick or pay for schooling and the retirement age keeps being raised; can we really call this rejuvenation?”

“There’s a rejuvenation index and it goes up every year? Can I invest in it?” asked another online commentator writing under a pseudonym.

In an interview with state media, Mr Yang likened his index to the “happiness indices” that economists in various countries have started to compile and said he used a wide array of measurable criteria to reach his conclusion.

These broadly fell under several categories, which he identified as: economic measures of national strength; prowess in technology, education and healthcare; “even more perfect socialist democracy” and “even more complete rule of law”.

Other criteria he used to judge how well China is rejuvenating were its level of sustainable development and “harmonious development between humans and nature”, as well as progress in “unifying the motherland”.

In response to some of the online criticism, Mr Yang said his goal was not to “try to please the public with claptrap” but to “use various indicators to discover where the problems exist in the process of rejuvenation”.

Around six years ago China explored using “green GDP” as a measure to capture the environmental costs of the country’s energy-intensive and highly polluting rapid growth, but the attempt was abandoned because of difficulties in quantifying those costs.

“Of course GDP doesn’t capture everything so economists have been looking for other measures of wellbeing, but [Mr Yang’s rejuvenation index] probably isn’t going to catch on internationally,” said Stephen Green, head of China research at Standard Chartered.

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Zhou Pengan, a member of a government advisory body in Anhui province, has publicly claimed to have found the real formula for Mr Yang’s index.

Mr Zhou worked out the number of days between 1949 and 2049 – 100 years from the founding of the People’s Republic of China – then calculated the proportion of days that had passed by the start of July 2012, when Mr Yang first published his rejuvenation index for the year 2010.

The result was 62.74 per cent of the 100 years had passed by then – exactly the same level of rejuvenation that Mr Yang said had been achieved in China by the end of 2010.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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