By Huang Yiping

(Caijing.com.cn) China's gross domestic product (GDP) grew by nearly 8 percent in the second quarter, according to the National Bureau of Statistics. The economy apparently hit bottom and has started rising again thanks to the government's massive stimulus plan.

The national statistics agency rushed out with the good news, thus reflecting how highly the central government values GDP figures. But is GDP growth the most important gauge for evaluating economic policy? Some Chinese scholars have questioned whether it's proper for the government to overemphasize economic growth, while ignoring efforts to improve the economic structure and welfare of ordinary people.

I recently took a trip to Tibet. What impressed me was not the scenery and infrastructure in the region, but the pious and content expressions on Tibetan faces. Their happiness is not necessarily linked to economic condition. More people in the world are richer than Tibetans, but how many people feel happier and more satisfied?

The attitude among Tibetans made me think about the ultimate goal of economic development. The doctrine – “economic development is everything” – was justified when the Chinese government was trying to provide its people with clothing and shelter. But the country has outgrown that stage.

History shows economic growth started about 200 years ago. During the previous 1,800 years, total world GDP was between zero and 0.5 percent, and people lived in harmony with the environment.

The Industrial Revolution changed it all. GDP grew 1.5 percent in the 19th century and 3 percent in the 20th century. Nowadays, most people no longer worry about food and clothing. They even own cars, apartments and luxury goods. But are they happier? City dwellers with multi-level villas and cars are not necessarily happier than poor villagers.

In my opinion, economic development's ultimate goal is a better quality of life based on material wealth, a clean environment and economic security. Why may city dwellers not be as happy as rural residents? The answer is that urban residents face many uncertainties and overwhelming work pressure, which in turn may harm their health and offset any happiness brought by wealth. 

Modern economics theories basically care about only material wealth -- maximizing profits and optimizing allocations of resources. Economic policymakers make economic growth a top priority. The blind pursuit of GDP leads to materialism. When a person has a BMW, he wants a Mercedes. Possessing material goods seems to become the only measure for success. When people are driven by materialistic desires, happiness becomes more and more elusive. 

The balance between humans and the environment has been broken, bringing global warming. Industrial expansion has accelerated the depletion of natural resources; oil, coal and iron ore may be depleted in a few decades.

Since 2003, the Chinese government has been reconsidering China's development model, advocating “people-centered” guidelines and “scientific development.” But policies do not really reflect these values. The excessive pursuit of GDP growth should be halted. GDP is only a means, not an end.

The government needs to do more to reach its ultimate goal of economic development. The government must first change the economic structure, protect the environment, support sustainable growth, and improve the quality of life among its citizens. Moreover, it must expand the reach of a social security system, allowing ordinary people to at least temporarily escape financial restrictions and taste the accompanying freedom.

Huang Yiping is a professor at the National School of Development, Peking University, and the Crawford School of Economics and Government, Australian National University.