This analysis first appeared in Caixin
According to the United Nations' just released World Happiness Report, Denmark is the happiest country in the world. It is followed by Norway, Switzerland, Holland and Sweden. The world's unhappiest people are in West Africa's Togo and Benin. Among the list of 156 countries, the United States ranks 17th, Taiwan 42nd, Japan 43rd, Hong Kong 64th, and China 93rd - the latter an improvement over last year's 112th-place finish.
Though China's ranking has improved, it is still badly ranked overall. As the world's second-largest economy, its economic growth is obvious to all. China's fiscal revenue totaled 6.86 trillion RMB ($1.12 trillion) for the first six months of the year, an increase of 7.5% over the same period last year. Of that, the central budget for education, health care, social security, employment, affordable housing projects and other spending amounts to 1.57 trillion RMB ($26 billion), an increase of 13.5% over last year.
So why is China still ranked poorly - No. 93, remember - when it is increasingly spending on its citizens livelihood and when its national living standard has also risen? Developing countries that are ranked happier than China include Romania, Kyrgyzstan, Pakistan, Libya, Indonesia, Vietnam, Albania, Angola, Turkmenistan, Kazakhstan, Malaysia, Venezuela, Mexico and Panama.
It's actually not very meaningful to compare China with those countries. Although its total economy looks impressive, China is positioned poorly globally when considering its 1.3 billion people. In 2012, China's total gross domestic product (GDP) totaled 51.9 trillion RMB ($8.48 trillion) with per capita GDP at 38,852 RMB ($6,348). By comparison, Denmark, the happiest nation this year, has a GDP more than 9 times that of China.
Objectively speaking, numerous countries ahead of China on the list are not necessarily the ones where people have the highest incomes. But they are nations with the most comprehensive social security and where income and expenditure are the most balanced. Apart from economic factors, Chinese people are confronted with all kinds of dangers - unsafe food, personal information leaks, deteriorating environmental quality, an intensified doctor-patient crisis. There are many dissatisfactions here.
Many hope that economic and social problems will be solved as China develops. But for now, Chinese people simply don't have a strong sense of well-being.
The poorer poor
For example, migrant workers live and work amid hardship all year for very little money. From an overall socioeconomic perspective, there are major imbalances in quality of life among Chinese citizens. Whereas corporate executives are highly paid, ordinary people experience the opposite. Most of those born in the 1980s or 1990s can't afford to buy a house and aren't in a position to get married.
When the Gini index, a measure of income distribution, is higher than 0.4, it means that wealth is concentrated among too few people. The internationally accepted view is that 0.47 is the "red line" that a society can tolerate. But according to a study conducted by two researchers at Xinhua News agency, China's Gini index has risen from 0.28 in late 1970s to 0.48 in 2007. And the index has continued to climb since, and is now above 0.5. The rich are getting richer, and the poor are getting even poorer. This is just one of the many reasons that Chinese citizens feel a diminishing sense of well-being.
In recent years, advanced countries such as the United States, England, Holland and Japan have all started conducting research related to the happiness index, creating different models to evaluate well-being. While GDP and GNP (gross national product) are the standards for measuring economies and wealth, the happiness rating index is the standard for measuring a nation's sense of well-being. It is just as important as the GDP because it monitors both socioeconomics and life satisfaction.
So what is China's poor rating telling us this time? Why aren't a robust economy, climbing incomes, infrastructure improvements, and China's improving international status not bringing its people more happiness?
Here's why: While tackling the economy, the government has ignored the people. Rather than spending so much energy to augment GDP, the government could have focused on creating stable incomes for working people, developing a sound social security, and helping graduates find employment easier. All of these measures would have helped ordinary families, who must constantly worry about housing prices.
Whether China is the world's second-largest economy and whether its GDP is growing are not so important, it turns out. What's important is how to create prosperity and happiness for its citizens.
Well-being doesn't have a direct correlation to official GDP statistics. People have their own standard, which is all about being able to live and work happily. It's clear that in countries such as Switzerland and Sweden, experts and media outlets aren't citing GDP when they discuss the happiness rating index.