EYESHENZHEN  /   Opinion

From GDP to GEP

Writer: Winton Dong  |  Editor: Jane Chen  |  From:   |  Updated: 2021-03-29

Shenzhen unveiled its Gross Ecosystem Product (GEP) accounting system, the first of its kind in China, on March 23.

As a new term, GEP means the total value of the final products and services by a regional ecosystem for human welfare and sustainable economic and social development.

In my point of view, an economic accounting system is the product of the times. It should be in full accordance with a country's social system and economic situation at that time. Before 1985, China used the former Soviet Union's System of Material Product Balance (MPS) to measure its economic scale during the planned economy period. Since 1985, China has gradually transferred to the market economy-oriented System of National Accounts (SNA), in which GDP is an important indicator to measure economic development.

Frankly speaking, the GDP accounting system has made a great contribution to China's success in the past decades. In order to compete with each other, every province and city in China have tried their best to get greater GDPs so as to take the leading position. Driven by such an incentive, the country's total GDP has witnessed an almost double digit increase annually and surpassed 100 trillion yuan (US$15.42 trillion) in 2020, ranking second globally.

As the country's most successful special economic zone and a pioneering city for reform and opening up to the outside world, any action taken by the Shenzhen Municipal Government is meaningful and even significant. So why does Shenzhen officially introduce the GEP accounting system and pay special attention to its ecosystem now?

As a country with a population of more than 1.3 billion, China faces a series of difficulties and challenges to protect the environment. Historically, China's rapid economic growth during the past four decades has benefited a lot from fixed-asset infrastructure investment, which heavily relied on fossil fuels consumption.

However, China's top leaders have realized that such a development model with high energy consumption and high carbon dioxide emissions is not environmentally friendly and unsustainable. China is one of the first countries to have ratified the Paris Agreement and has more than met its annual carbon emissions reduction goals. The country has also made clear that it will not repeat the "pollution first, treatment later" path taken by some Western countries in the past.

In November 2012, the 18th CPC National Congress decided to incorporate "ecological civilization" into the Party Constitution. Following the congress, China has launched three major ecological actions for the prevention and control of air, water and soil pollution, which have made substantial progress in recent years. And in 2018, China further incorporated "green development," "beautiful China" and "ecological civilization" into the country's Constitution.

All these efforts show that ecological civilization has become the common will and mission of the Party, the country and society as a whole. Actually, China's ecological civilization includes a series of new concepts such as the harmonious co-existence of human beings and nature, lucid waters and lush mountains being recognized as invaluable assets, and a good ecological environment being most conductive to improving people's livelihood.

Under the new policy of ecological civilization, China has adopted a holistic approach to conserve the country's mountains, rivers, forests, farmlands, lakes and grasslands. Meanwhile, the trajectory of our economic growth is also shifting from polluting industries to a new framework of growth based on renewable and efficient energy systems, water recycling conservation systems and smart urban planning.

As an important accounting system, the GDP measurement may continue to be used for quite a long time. However, new infrastructure investment will shift under the concept of ecological civilization, put greater value on sustainability and underpin massive fiscal support for research and development in clean and renewable energy and water conservation technologies.

(The author is the editor-in-chief of Shenzhen Daily with a Ph.D. from the Journalism and Communication School of Wuhan University.)