ABSTRACT
For two decades following 1978, China witnessed rapid economic growth. It has also performed well in the face of the current Asian economic crisis which threatens to end the so-called East Asian economic ‘miracle’, as Japan continues to be stuck in prolonged economic recession and the South Korean economy drags itself back slowly from the brink of the currency crisis that began in mid-1997. Although China’s growth in the second half of 1998 slowed down as a result of unprecedented flooding which devastated vast areas of southern and northeastern China, the Chinese economy does not appear to have suffered from a loss of investors’ confidence and the ensuing capital flight, as experienced in the rest of East and Southeast Asia. Thus, it is reasonable to predict that economic growth will continue in the near future, perhaps at lower annual rates. As was often emphasised by the late Deng Xiaoping, who liberalised the economy, the ultimate purpose of economic development is to improve the social and individual welfare of the population, a commitment that has been maintained by his successors. The obvious and significant question, therefore, is: Exactly how much improvements have been generated in the living standard of the population as a result of the rapid economic growth in China?
