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| Shanghai |
What is China
really like? I just returned from an 8
day trip to China. In a trip sponsored by the Vermont Council on World Affairs, we visited Beijing, Suzhoe
(pronounced su joe), Shanghai and Hangzhou (hang joe). While an eight day trip makes me just a tiny
bit more knowledgeable than most Americans, it does provide at least a first
impression of the country.
China
by any analysis is a booming, growing country.
In the big cities along the east coast where we visited, construction
projects are everywhere. In fact, some
people claim that the new national bird of China is the “boom crane”. It is not unusual to see four, five, six
cranes busily working on many construction sites in these growing cities and Shanghai must be considered
one of the most modern cities in the world.
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Construction, the Chinese "national
bird", the boom crane |
It’s also
easy to see that the people in China
are prospering. The citizens in the cities are dressing in nice business attire
and are usually on the go. People in the
parks and gardens are dressed in clean, casual attire and are strolling more
casually but still appear to be on a mission.
I saw only a few who were obviously poor. A few disabled sitting on the side walks
begging for money; but able-bodied pan-handlers begging for money, I saw none
of these. There are, however, the
ubiquitous street vendors, who we impolitely called “mosquitoes” because they
bug you whenever you get on or off the tour bus. These persistent sales people will offer you the opportunity to buy a “genuine” Rolex watch for five US dollars or other street trinkets that you just can’t live without and they don’t go away with a simple “no thank you”.
Also I saw many people sweeping the streets with brooms. In fact, I didn’t see street litter anywhere
in China, not even in Beijing or Shanghai
that are homes for millions of people. The government employs thousands of
people as municipal workers to keep the streets clean and that seems to work.
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| Keeping the city clean |
It’s
also obvious that the Chinese people are fond of Americans and Europeans (I
don’t think they can tell us apart).
If
you ask a Chinese person on the street to take their picture, he/she could not
be more willing.
Ask a Chinese woman to
take a picture with her adorable baby and she’s eager to do it.
Ask them to take your picture and they gladly do it.
In fact, they want to be
in the picture too!
Another
curious phenomenon is that the US dollar is accepted for currency everywhere,
not British pound or German deutsche mark that I could see, but US dollar, yes! Six yuan per dollar is accepted
everywhere. I soon became proficient at
dividing the price in yuan by six.
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Tienanman Square and Entrance
to the Forbidden City |
Of course,
China is thought of as a communist country and most of us were brought up to
believe that communism is bad, removing all liberty from the people, and ruling
the people with a heavy handed dictatorial power. Well if the Chinese people are unhappy they
certainly don’t show it. In fact, China is not
strictly communist. There are millions
of small businesses owned and operated by private people. China is a giant at making small
businesses thrive. In fact, I asked the
tour guide, “In China, who owns the electric company?” “The government” he replied. Then I ask him, “Who owns the office
buildings that are being constructed?”
“Well the development company owns that, and the construction company
builds it for the development company.”
That sounds capitalistic to me.
But many of the big businesses are controlled by the government, all the
provincial government employees work for the government, all the electronic, telecommunications and power companies are government controlled and some of the manufacturing and industrial companies are owned and operated by the government However, some foreign
manufacturing companies are owned by the foreign company. For example car parts made for Ford and
General Motors are owned by Ford and General Motors and employee’s paychecks
probably have Ford and GM at the top. These
businesses operate in China
according to Chinese regulations and must pay the Chinese government for the
opportunity to have factories in China. The point being, China in not a strictly communist
country where all the means of production are owned by the government (or in
communist lingo, all the means of production are owned by the “people”). China is a blend, a mish mash, of
government operations and private operations.
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| High speed rail |
There’s no doubt though that
China is a
centrally controlled country, how else could birth rates be controlled to only
one child per family.
I think that this
is a more important fact then it’s supposedly communist form of
government.
China deals with issues, whether
political, economic, social, international, by centralized government
control.
Yes,
China is a single party system. All
members of the government are communists, but it is the central control that’s
the crucial factor, not that it is nominally communist.
It may be that a central authority works well
in a country like
China
where people are more society oriented.
Perhaps it is centuries of people living in close proximity that allows
them to work more closely as a society, as a community.
Or perhaps it is the approximately 40 centuries
of being ruled by an emperor who was the ultimate authority.
China was ruled by an emperor from
2000 years before Christ until 1912, when the emperor was overturned and a more
democrat government called the Republic of China was established by Chiang Kai-Shek.
Chiang lasted until 1949 when
Mao Zedong forced Chiang into
Formosa
(present day
Taiwan) who
formed the Republic of China (ROC) and Mao formed the People’s Republic of
China (PRC) over the rest of
China.
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431 Km/h or 270 mph on the High
Speed Rail line |
The
centralized government has several distinguishing features.
It allows the government to direct policy
swiftly and efficiently.
This has
resulted in phenomenal economic growth in
China.
Over the last 30 years,
China has
experienced a GDP growth rate hovering around 10% per year.
China’s
GDP, after adjusted for inflation and cost of living differences, is approaching
that of the
US’s
($16.7 trillion in 2013) if it hasn’t already passed it.
So
China will become the largest
economy in the world.
But really, so
what?
China
has 1.35 billion people, the
US
has 325 million (.325 billion).
So
China has over
four times as many people as we have.
You wouldn’t expect a small country like
Switzerland
to out produce a big country like the
United States.
Likewise you wouldn’t expect the
US to out produce
China.
Also remember that
China after World War II was a
third world country.
After the war,
China reformed
itself and has been catching up with other countries ever since.
Starting from a lower level of productivity
it’s easier to have high rates of growth.
As time passes, however, growth becomes more difficult, the low hanging
fruit of progress has already been picked.
China’s rate of growth will slow as
the economy catches up.
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| Typical housing complex |
Furthermore,
even if China’s
economy is bigger that ours, Chinese citizens are not better off. Using the GDP per person as an estimator for
the citizen’s wealth, China’s
GDP per person is about $12,000 per year in 2013 after inflation adjustments
while the US
has about $53,000. So the US
population, in general, enjoys a higher standard of living. While we were in China, we were graciously allowed
to have lunch in what I believe to be a typical Chinese apartment. The food was good and plentiful. The apartment consisted to three rooms, each
about 12 to 15 feet wide and 12 to 15 feet long, aligned in a row. The first room was the dinning room, the
second the bedroom and the back room was the kitchen. The bathroom was provided for by a public
bath down the block. In spite of the
fact that the hostess was very hospitable and kind, the dwelling was modest by
any description.
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China per capita GDP compared
with other countries, World Bank Dec 2014 |
Another feature of a central
government, as you may guess, the powerful will do everything they can to stay in power and to empower and enrich themselves through graft, criminality and nepotism. The people are, of course,
aware of these actions and, according to Tiger Head Snakes Tails by Jonathan
Fenby, previous editor of South China
Morning Post, there are about 180,000 protests a year on such matters. Occasionally public officials are arrested
and jailed by the government. But I
believe most of these criminal actions go unpunished. Relatives of Xi Jinping, the new Chinese
leader, has assets of $376 million while outgoing Premier, Wen Jiabao, has
asset of $2.7 billion. Forty per cent of
the private wealth in China is held by 1 per cent of the population.1) Unfortunately, and surprisingly, in the
United States in 2010, wealth was also distributed almost as un-equally, 1% of
the population own 35.4% of the wealth.2) Distribution of wealth is
important because it portrays how the common citizen partakes in the economic
success of a nation and how widely the wealth is spread throughout the country. For right now, the US is the leader of the financial
and democratic world, but based on distribution of wealth statistic,
this may not always be the case.
1) “Tiger Head Snake Tails, China Today, How it got There
and Where it is Heading, ”, by Jonathan Fenby, The Overlook Press, Copyright,
2012
2) “Who Rules America? Wealth, Income and Power,”
G. William Dornhoff, Socialogy Dept, University
of California, Santa Cruz
