Category Archives: inequality

“Party Congress Diary, Day 4″

FP’s Kathleen McLaughlin has been posting updates from Beijing over the last week, and her latest is a look at the unrelenting sexism of the Communist Party:

Moving in synchronicity with their interchangeable smart suits and tidy hairstyles, the most noticeable women at the 18th party congress are, by design, part of the backdrop. Several hundred young women, chosen from a nationwide search, are working during the week as “ceremony girls,” a ubiquitous feature of official China, inside both the Great Hall of the People in Beijing where the congress is being held and the media center in the Western part of the city, as the Chinese Communist Party installs its next generation of top leaders.

Serving tea, ushering people to their seats, and standing in neat rows while posing for the cameras, “ceremony girls” are ever present in official China, from the sexy soldiers marching in China’s 60th-anniversary parade in 2009 to the young women delivering medals at 2008′s Beijing Olympics.

Their constant, attentive presence is a glaring reminder of what is forever missing from China’s top tier of power: women. They can pour tea with a smile, but they don’t get a seat at the table.

Gender discrimination often seems to be getting worse in China: Although a large percentage of Chinese women are employed (70 percent, compared with 25 percent in India), urban Chinese women earn about 67 percent of what men make, according to a 2010 survey from the All-China Women’s Federation. This summer, women in Guangzhou shaved their heads in protest of growing discriminatory policies around the country that require girls to score higher than boys on college entrance exams.

China’s ranking in the World Economic Forum’s annual Global Gender Gap report, which measures gender parity, is falling, from 57th place in 2008 to 69th this year.

“The gender-equality situation in China has not actually been improving in the past 30 years,” says Chan. “A small percentage of women can rise to the top in business and some sectors, but far more women are stuck in low-paid positions and service industries.”

Chan said there is “massive need” for policies that will improve women’s standing in China — things like girls’ education, affordable child care, and basic social services. “If any country prioritizes economic development and social stability ahead of social development, this kind of thing is bound to happen,” she says. “Historically and culturally, women in China have always been treated and still are treated as less important.” Just ask the People’s Daily, the official newspaper of the Communist Party, which on Nov. 9 published a slide show called: “‘Beautiful scenery’ at 18th CPC National Congress.” The scenery in the slide show? Women.

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Filed under 2012 power transfer, Communist Party, inequality, women

“China inequality causes unease – Pew survey”

Pew has a new survey out, asking Chinese about a whole lot of things. The results confirm what a lot of us have sensed about China:

A slowdown is particularly troubling for Xi because, as China prepares for its once-in-a-decade leadership transition, a Pew Global Attitudes survey conducted there this year finds that its citizens are also increasingly worried about a variety of other domestic issues, especially corruption, inequality and consumer protection.

In the economic realm, while standards of living have improved for the vast majority of Chinese, and the country’s middle class has expanded tremendously, there is nonetheless a widespread belief that not everyone is enjoying their fair share. And as consumers, many Chinese feel at the mercy of a system that cannot guarantee the safety of life’s basic necessities.

Half say corrupt officials are a very serious problem in China, up from 39% in 2008.

Second, there is a consensus that some people are being left behind by China’s rapid growth – 81% of those polled agree that today the “rich just get richer while the poor get poorer”. Nearly half (48%) describe the gap between rich and poor as a very big problem, up from 41% four years ago.

And in another sign that many do not see a level economic playing field, less than half (45%) agree with the statement “most people can succeed if they are willing to work hard”.

Roughly four-in-ten (41%) now consider food safety a very big problem, up from just 12% in 2008.

During that same time period, concerns about the safety of medicine have more than tripled, from 9% to 28%. Similarly, the percentage saying they are very worried about the quality of manufactured goods has jumped from 13% to 33%.

These are important points, and I think they’re very telling for the crisis of confidence the Party is facing. Xi needs to seriously change course if he wants these numbers to stop climbing.

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Filed under Communist Party, corruption, economy, inequality

“Rebalancing a Divided China”

From Tom Orlik at the WSJ, a look at wealth inequality in China:

A 2011 survey from China’s South Western University of Finance and Economics found that 55% of China’s households had little or no savings for the year. That busts the myth of industrious farmers and migrant workers saving to pay for education, health care and pensions.

The survey of 8,000 households also found that the top 10% of China’s households control 86% of wealth and account for 56% of household income. That’s a considerably higher share of income than the 32% suggested by the official National Bureau of Statistics data and points to a worrying level of inequality.

International and historical comparisons suggest China’s wealth gap should be ringing alarm bells. Surveys in 1995 and 2002 found that back then China’s top 10% controlled just 30% and 41% of wealth, respectively. In the United States, Federal Reserve numbers show the top 10% are eating 74% of the pie.

China’s rich are already buying passports and homes abroad. With such a high share of assets in their hands, if they all decide to leave at once, that would leave a big hole in the banking system. China’s poor have acquiesced in an iniquitous system because their income is also rising; if that stops, they might not be so tolerant of entrenched privilege.

The main takeaway though is on the prescription for addressing China’s consumption-light growth model. The government’s efforts so far have focused on extending public health, education and pension services to reduce the need for household precautionary saving and to free up income to spend at the shops.

It’s pretty shocking that China could pull off wealth inequality higher than that of the USA, but somehow they did it. We’ll see what happens if these trends continue.

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“The Souls of Chinese Cities”

FP has put out a bunch of great China-related content in the last few days. The first one I’ll post is from Christina Larson, who explores three very different Chinese cities. From her description of Urumqi:

China’s far western region of Xinjiang follows its own time. Officially, all of China recognizes a single time zone, but Urumqi’s clocks are set two hours behind — referred to unofficially as “Xinjiang time.” It’s just one more example of the ways in which history here has tended to move in fits and starts, out of sync, both accidentally and by design.

Each evening at sunset, the adhan, or Islamic call to prayer, briefly fills the streets of Xinjiang’s capital, before being overtaken by the modern static of traffic noise and blaring horns.

But with the fall of the Soviet Union in 1991, history, having been frozen in time, suddenly lurched forward. The long border went from being Xinjiang’s biggest liability to its greatest asset. Within two years, borders had opened with 16 countries, and Yimirhan, who had by then been promoted to a driver, was soon driving across them. He recalls his first time navigating the “beautiful and frightening” hairpins turns of the famous Karakorum highway. (His 30-year-old daughter, translating for him, smiled at her father’s youthful excitement.)

Sensing a power vacuum in Central Asia, Beijing soon turned its attention to strengthening economic and political ties with its western neighbors, as well as investing to extract Xinjiang’s rich reserves of coal, gas, copper, and other minerals. If China’s modern construction boom came 15 years late to Urumqi, building is now on overdrive here, for economic and political reasons: a 21st century form of manifest destiny.

Today the paved road from Urumqi to Yili takes 10 hours, not 24. New rail lines have opened between Urumqi and Altay, and between Kashgar and Hotan, and there’s even talk of extending the Urumqi-Kashgar rail line all the way to Istanbul. There’s also a plan floated to build a rail link between Urumqi and the port of Gwadar in Pakistan.

Alas, Urumqi’s new wealth has not been evenly distributed. The man appointed in 1994 to be Xinjiang Party Secretary was Wang Lequan; until his ouster following the 2009 ethnic riots in Urumqi, which left roughly 200 people dead, he was a chief architect of Xinjiang’s modernization: well-connected, savvy and adept at wrangling funding from Beijing. He was also a hardliner whose policies toward ethnic minorities — including restricting religious fasting, praying, and other observances in schools and government offices — earned him no love from the city’s Uighur Muslims. One professor told me that the most harmful result of his policies was to systematically deny Uighurs opportunities and promotions in government agencies.

Urumqi today is a divided city. Government investment is flowing into the northern part of the city, but the southern part, the Uighur corridor, has seen little development since the 2009 riots. One Saturday evening, I went to a Uighur wedding, held in a third-floor hotel ballroom, with fraying rugs and chipping paint. The guests, dressed in everything from gowns to jeans, danced to a mix of pulsing techno music and traditional Uighur songs; groomsmen sprayed the happy couple with silly string from a can. The bride and groom had met at Xinjiang University, and although they and their guests were also mostly well educated, they lived in a world apart; there were no Han Chinese guests. (As a Han friend put it: “Even in the same city, Han and Uighur barely talk to each other; segregation is not an ongoing process, it is a fact.”)

Another afternoon I visited the famous Border Hotel complex, where Central Asian traders come to do business. Typically, I was mistaken for Russian. With me was a young Uighur guide, whose own language is close enough that he can understand most Central Asian languages. But as we entered one hotel lobby, the doorman, a pale, sweaty Han Chinese man with a receding hairline and a nervous manner, stopped him: “What are you doing? Where are you going?” Behind us, an assortment of unshaven Uzbeks, Kazakhs, and Tajiks passed by unmolested. “To be Uighur is to be under constant suspicion,” my guide hissed through his teeth. I could easily see that a negative feedback loop was at work. He waited for me outside, puffing nervously on his cigarette; when I came back, he complained: “It’s getting worse.”

I asked if he’d ever been to any of the bordering countries, but he shook his head. “I can’t get a passport.” Fearful that Uighurs will radicalize if they travel abroad, the government has limited their ability to cross borders — a policy that raises the uncomfortable question of just who is supposed to benefit from the “New Silk Road” strategy.

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Filed under ethnic conflict, inequality, Xinjiang

“China and the Unofficial Truth”

Evan Osnos has a funny-ish piece about Chinese netizens watching the opulence on display at the NPC and NPCC:

While Premier Wen Jiabao was pledging that the government would “quickly” reverse the widening gap between rich and poor—last year he said it would do so “gradually”—Chinese Web users were scrutinizing photos of delegates arriving for the meeting, and posting photos of their nine-hundred dollar Hermès belts and Birkin and Celine and Louis Vuitton purses that retail for car prices. As Danwei points out, an image that has been making the rounds with particular relish shows the C.E.O. of China Power International Development Ltd, Li Xiaolin, in a salmon-colored suit from Emilio Pucci’s spring-summer 2012 collection—price: nearly two thousand dollars. Web user Cairangduoji paired her photo with the image of dirt-covered barefoot kids in the countryside and the comment: “That amount could help two hundred children wear warm clothes, and avoid the chilly attacks of winter.” And it appended a quote from Li, of the salmon suit, who purportedly once said, “I think we should open a morality file on all citizens to control everyone and give them a ‘sense of shame.’” (This is no ordinary delegate: Li Xiaolin happens to be the daughter of former Premier Li Peng, who oversaw the crackdown at Tiananmen Square.)

Another message making the rounds uses an official high-res photo of the gathering to zoom in on delegates who were captured fast asleep or typing on their smart phones. (h/t ChinaSmack.) A separate message provides instructions on how to be a good delegate: “After you eat, remember to go to the Great Hall to clap! Raise your hands! Clap! Raise your hands! Clap! Raise your hands!” And yet another message going around involves high political stakes: a property developer and conference delegate named Zhang Mingyu was using Weibo to send out calls for help, saying that Chongqing police had raided his Beijing apartment and were planning to detain him for earlier announcing (online, of course) that he planned to tweet juicy new information about a politics/corruption/mafia/police story in the big city of Chongqing. Got that straight?

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Filed under Communist Party, inequality, National People's Congress

“The End of the Chinese Dream”

There should probably be a question mark at the end of that headline, but many Chinese might leave it as is. Essentially FP is writing about the growing income inequality that is making many common Chinese angry- they notice that while the economy is still growing quickly, less and less of the money is making its way down to them. Have the Chinese rich managed to pull an America and cut the rest of the country out of the rise?

In June, a Chinese friend of mine who grew up in the northern industrial city of Shenyang and recently graduated from university moved to Beijing to follow his dream — working for a media company. He has a full-time job, but the entry-level pay isn’t great and it’s tough to make ends meet. When we had lunch recently, he brought up his housing situation, which he described as “not ideal.” He was living in a three-bedroom apartment split by seven people, near the Fourth Ring Road — the outer orbit of the city. Five of his roommates were young women who went to work each night at 11 p.m. and returned around 4 a.m. “They say they are working the overnight shift at Tesco,” the British retailer, but he was dubious. One night he saw them entering a KTV Club wearing lots of makeup and “skirts much shorter than my boxers” and, tellingly, proceeding through the employee entrance. “So they are prostitutes,” he concluded. “I feel a little uncomfortable.”

But when he tallied his monthly expenses and considered his lack of special connections, or guanxi, in the city, either to help boost his paycheck or to find more comfortable but not more expensive housing, he figured he’d stick out the grim living situation. “I have come here to be a journalist — it is my goal, and I do not want to go back now. But it seems like it’s harder than it used to be.”

Despite China’s astonishing economic growth, it has gotten harder for people like my friend to get by in the big city. His is not a particularly lucrative profession. Like many in Beijing, he cannot count on his annual pay to keep pace with China’s official rates of inflation — which many economists suspect are lowballed anyway.

Could it possibly be true that a swath of people in China’s big cities is downwardly mobile, if one compared wages with living expenses? I asked Patrick Chovanec, an associate professor at Tsinghua University’s School of Economics and Management in Beijing. Alas, he told me, it’s difficult to find much clarification in China’s famously fudgeable official statistics. (For instance, the official unemployment rate only includes individuals with urban hukous, or permanent residency permits — which excludes the most economically vulnerable.) Still, he noted: “If you perceive that you’re losing buying power — or have rising but unmet expectations — that’s when people get upset.… And this country, for a country growing at over 9 percent, is in a foul mood.”

As Michael Anti, a popular Chinese blogger and political commentator, told me, “The rich are becoming a dynasty.” Now people in China recognize that “you get your position not by degree or hard work, but by your daddy.” Anti added that though corruption and guanxi are hardly new concepts in China, there was previously a greater belief in social mobility through merit. “Before, university was a channel to help you to ruling class. Now the ruling class just promote themselves.”

There is a dark sense that something has changed. “It’s not simply income equality that bothers people — that’s a misconception,” Chovanec told me. “When Jack Ma makes a billion dollars for starting a successful company, that’s OK.… It’s inequality of privilege. It’s how people make their money. There’s now a whole class of people getting wealthy because of who they are, not what they do — and they follow a different set of rules.”

In today’s China, the abilities to buy and sell real estate and to win government contracts are among the greatest drivers of wealth, and it’s those who are already wealthy and well-connected who have access to these opportunities. If their children are lazy or dull, they can use their stature to create opportunities and positions for them, cutting short the trajectories of more able aspirants. Social status is becoming further entrenched because, as Chovanec notes, “Government is so pervasive in China’s economy.… Government has great power in determining winners and losers, so who you are and who you know does more than anything else to determine success.” And those at the top increasingly act above the law. “Privilege begets money, and money begets privilege.”

There are certainly many counter-examples, but the trend of super-rich getting super-richer while the middle class admits fewer and fewer members (and at a higher and higher price) seems undeniable.

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Filed under capitalism, class conflict, inequality

“Naked begging reveals loss of dignity among China’s migrants”

Naked protests for Ai Weiwei just a few weeks ago, now naked migrant workers? What is happening in this country?!

A family of four in China were discovered walking naked on the street begging for money to pay for the medical expenses of their newborn baby, an act which has generated criticism of shameful behavior on one hand, while others have felt the family’s behavior is a reflection of what society has done to them first, the official China Youth Daily reports.

Other instances of naked begging have also been seen of late: migrant workers, who have relocated from rural areas to the country’s cities in search of work, going naked to beg for their pay or asking others to beg naked on their behalf. In Chinese culture, nudity is considered the ultimate disgrace, therefore to beg naked is perhaps the strongest expression of degradation. This controversy has therefore served to highlight the hardship of these workers’ lives and the problems that have caused them to shed any vestige of self-respect.

One migrant worker surnamed Han reportedly paid a man to stand naked in public with a sign to protest that he had not been paid by his employer. When asked the reason for the manner of his protest, the man told the China Youth Daily reporter, “I am not afraid of losing face. I am afraid of starving and dying with no one caring about me.”

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Filed under inequality, migrant workers, protest

“China labour unrest flares as orders fall”

FT reports on this trend, which is a key part of the argument claiming that a severe dip in the Chinese economy could easily topple the government:

China is facing its worst wave of labour unrest since a series of wildcat strikes at Japanese-owned car plants last year, as declining export orders force factories to reduce worker pay.

More than 10,000 workers in Shenzhen and Dongguan, two leading export centres in southern Guangdong province, have gone on strike over the past week. The latest protests broke out on Tuesday at a Taiwanese computer factory in Shenzhen.

Last week, Guangdong’s acting governor said the province’s exports dropped 9 per cent in October from the previous month. Provincial leaders are also contending with widespread protests by farmers over land seizures. On Monday nearly 5,000 residents in the town of Wukan marched on government offices in a peaceful protest.

Factories are cutting the overtime that workers depend on to supplement their modest base salaries, after a drop in overseas orders.

According to CLB, the average basic wage for electronic workers is about Rmb1,500 ($236) a month, but rises to Rmb2,500 with overtime. “Their basic wage is never enough on its own without overtime,” Mr Crothall said.

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Filed under economy, inequality, labor dispute

“At 105, Chinese Linguist Now A Government Critic”

Zhou Youguang, whose involvement in developing pinyin took Chinese romanization methods into the modern era, is in the news again. Now the man who put a stop to linguistic madness like saying ‘Peking’ for a city roughly pronounced ‘bay-jing’ is in trouble, though. From NPR:

Zhou has published an amazing 10 books since he turned 100, some of which have been banned in China. These, along with outspoken views on the Communist Party and the need for democracy in China, have made him a “sensitive person” — a euphemism for a political dissident.

When Zhou was born in 1906, Chinese men still wore their hair in a long pigtail, the Qing dynasty still ruled China, and Theodore Roosevelt was in the White House. That someone from that era is alive — and blogging as the “Centenarian Scholar” — seems unbelievable.

In the late 1960s, he was branded a reactionary and sent to a labor camp for two years. In 1985, he translated the Encyclopaedia Britannica into Chinese and then worked on the second edition — placing him in a position to notice the U-turns in China’s official line.

At 105, Zhou calls it as he sees it without fear or favor. He’s outspoken about what he believes is the need for democracy in China. And he says he hopes to live long enough to see China change its position on the Tiananmen Square killings in 1989.

“June 4th made Deng Xiaoping ruin his own reputation,” he says. “Because of reform and opening up, he was a truly outstanding politician. But June 4th ruined his political reputation.”

Far from shying from controversy, Zhou appears to relish it, chuckling as he admits, “I really like people cursing me.”

That fortitude is fortunate, since his son, Zhou Xiaoping, who monitors online reaction to his father’s blog posts, has noted that censors quickly delete any praise, leaving only criticism. The elder Zhou believes China needs political reform, and soon.

“Ordinary people no longer believe in the Communist Party any more,” he says. “The vast majority of Chinese intellectuals advocate democracy. Look at the Arab Spring. People ask me if there’s hope for China. I’m an optimist. I didn’t even lose hope during the Japanese occupation and World War II. China cannot not get closer to the rest of the world.”

The elderly economist is scathing about China’s economic miracle, denying that it is a miracle at all: “If you talk about GDP per capita, ours is one-tenth of Taiwan’s. We’re very poor.”

Instead, he points out that decades of high-speed growth have exacted a high price from China’s people: “Wages couldn’t be lower, the environment is also ruined, so the cost is very high.”

Zhou’s century as a witness to China’s changes, and a participant in them, has led him to believe that China has become “a cultural wasteland.” He’s critical of the Communist Party for attacking traditional Chinese culture when it came into power in 1949, but leaving nothing in the void.

Someone really should compile a list of old men who terrify Beijing.

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Filed under democracy, history, inequality, political reform

“Migrant workers: Restlessness of a new generation”

FT- whose use of a paywall drives me crazy with fury- has an article here about how the attitude of migrant workers is changing with time:

In some ways, the new generation of migrants is luckier and better off than the earlier one. They not only earn more, but they can spend more of it on themselves and their advancement since their parents are less likely to live in poverty – the original generation of migrants helped to ameliorate that.

“The first generation left the village to make money and then come back to build a house,” says Liu Kaiming, head of the Institute for Contemporary Observation, which monitors workers’ conditions in Shenzhen. “Now, the family’s house is built and there are no jobs there. They go to the city for their future.”

As a result, they are less docile and harder to manage. Factories in the region commonly experience labour turnover of 10 to 15 per cent a month – or well in excess of 100 per cent a year. This generation does not find it so easy to settle.

“Fifteen years ago, if it was the third day after the new year holiday and you went over to the dormitories and said: ‘We have a heavy order, come to work,’ they would all do it. The company was the most important thing. These days if you told them the same thing, they would say ‘no’.”

Ms Cheng says the younger workers are, as the Chinese saying has it, “riding a donkey and looking for a horse” – they work in factories for money but are looking for opportunities.

Migrants are still bound by the hukou system of household registration, which excludes rural dwellers from education and social benefits in their adopted cities. It has also become very expensive to live outside factories that provide them with free dormitory accommodation and meals. Although they can see wealth and expensive property in the city, their opportunities are limited.

The government’s attempt to shift low-cost manufacturing into inland provinces is partly aimed at easing the problems of migrants. The idea is that they will be able to find work closer to home and not face the same isolation as in the coastal cities.

Yet young people will carry on coming to the Pearl River delta to seek not only money, but a better life. Unless factories or the government can fulfil those hopes, they will remain restless.

These are some of the groups that I’d be most worried about during a financial downswing if I worked in Zhongnanhai. They’ve been waiting for the ‘China miracle’ to makes it way back to them, but if they realize that there aren’t any plans for them to get a slice of the pie, and that Shaanxi coal mine owners are going to spend the next few generations riding around in black BMW’s while they cram into hard seat trains to go home… we’ll see what happens next.

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Filed under inequality, migrant workers

“Ordos: Boom town to ghost town”

Melissa Chan from Al Jazeera has yet another great piece up on her blog- this one about Ordos, a city that exemplifies the weirdness of the housing market here:

We had discovered Ordos by accident. Our team was in the area filming a report on the environment when we learned the city was nearby. I had heard about “Ordos 100″, a residential building project that had invited 100 globally renowned architects to design 100 homes for the city. It would be a fun detour.

We imagined wealthy residents, made rich over the past decade from the region’s mining boom, living in homes created by the Ordos 100 project. But instead, we found ourselves arriving at Ordos in the evening, checking into the only hotel we could find – a fancy one, encased in marble whose staff looked perplexed to see us.

We were the only guests there for the night. In the morning, we drove past streets of empty, but beautiful buildings. Never mind Ordos 100 – we never found it. City centre had us spellbound, and wondering if officials had watched that film classic, Field of Dreams.

Others who later visited Ordos, including economist Ting Lu of Bank of America-Merrill Lynch, pointed out that the real estate was not sitting idle, but had all been sold. So while the city lacked human beings, it was certainly supplying this odd demand from Chinese purchasers for empty apartments.

Inflation hit a three-year high this past July at 6.5 per cent, meaning that wherever Chinese store their savings, it had better yield something that can keep up with the rate of inflation.

The stock market is no longer a popular choice for many ordinary citizens, who find it too unpredictable. That really only leaves property to dump your money.

Ordos is one oversized, inefficient bank vault.

And when we decided to check in after two years to see how “Bank of Ordos” was doing, we found a surprise: construction is still happening at a fierce pace.

Ordos now boasts Asia’s largest fountain show. Its theatre has managed to hold a few concerts this year. There are definitely more signs of life than the last time around – but still comparatively little relative to the size of the city. We came to realise just how little when our team got thirsty midway through our shoot and decided to buy water.

We ended up spinning around and around city blocks, searching for a store selling water. Eventually we found sine – but not without the feeling we had gone on a treasure hunt. There is no major supermarket in Ordos, because not enough people live in the city.

As it turned out, while no real-estate sales offices in Ordos really wanted to talk to us, we were told off camera that apartment units up for sale in the secondary market were not getting offers. And, as we poked around apartment buildings in Ordos, we noticed broken windows and cracked paint on the exteriors, suggesting that building managers were not too fussed about keeping the place spiffy.

A wander into the buildings themselves showed dusty hallways and vacant apartment units. Some apartments were clearly halfway through interior decorating when work stopped, presumably because the owners decided, quite practically, that since they were not going to live in the unit, why bother?

People rebut stories like this by talking about how many people in China still live in tiny shacks in the countryside, or caves in the dusty north. There’ll always be demand for housing, right?

But if it’s housing like this, that cave-dwellers will never be able to afford, then doesn’t that defeat the whole purpose? What is the inherent value of a concrete cube you can’t actually sell to anyone? And if you end up having to dramatically slash the price down to a tiny fraction of what it is now just to attract a renter, then haven’t you essentially lost your entire investment? Especially given how poorly these places have been constructed and the short lifespan they’ll presumably enjoy, I don’t see how this can continue without a crash some day.

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Filed under development, economy, inequality

“An Investor’s Guide to Buying Influence in China”

Ever wondered about guanxi? You hear about it constantly in China-related writings: the ‘relationships’ which exist to provide a vehicle for corruption. A Chinese writer is writing a guide to guanxi, which sounds pretty interesting:

“Some people are real masters at it, and some aren’t. Not everyone is an expert,” the novelist said by telephone from his home in Changsha, the capital of Hunan Province.

“I want to help the weak ones advance and take away the oxygen from the experts,” he said.

For Mr. Fu is no mere peddler of corrupt ideals, with a dystopic solution to a serious problem. His goal is to create a new kind of level playing field, where everyone benefits from an unfair arrangement by exploiting it equally.

In other words: Fight fire with fire, and corruption with … more corruption.

The approach reflects what experts say is widespread cynicism about the chances of curbing corruption, in the absence of independent monitoring agencies or free news media.

“Corruption is growing all the time, because people and the country are growing richer,” said Liao Ran, program officer for China and South Asia at Transparency International, a nongovernmental anti-corruption organization based in Berlin.

“The Communist Party can mobilize human and financial resources to do something. It has the institutional capacity to mobilize or to suppress,” Mr. Liao said by telephone. “If it wanted to control corruption, it could do it.”

Yet, far from fearing corruption, he said, officials and businessmen “are afraid if you are not corrupt. They want you to be corrupt. If you don’t join in, if you want to be a good person, then you highlight their badness.”

Mr. Liao’s quixotic conclusion: Because of government involvement, “corruption in China is very serious and very rampant. And under control.”

“A society that relies on guanxi to get things done is a scary place,” he said.

“When guanxi becomes stronger than rules, it’s dangerous to everyone. Why? Because if you use your guanxi, I’ll use my guanxi, and in the end the price of everything rises. When there are no rules, then everything is a competition, and those with more power win,” he said.

For now, absent real solutions, he says, the only hope is to publicize guanxi’s tricks. That way the socially skilled lose their advantage over the socially inept.

“Build a new set of rules,” he wrote. “Make these things more open, transparent, and, in this way, more free, equal and fair.”

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Filed under corruption, inequality

“China’s summer of discontent”

After going over the other sources of discontent this summer, Democracy Digest talks about the taxi drivers strike, which I haven’t carried on here yet:

The Communist party’s ability to contain simmering social unrest is also being tested in Hangzhou, where a taxi drivers’ strike has prompted “the kind of violence seldom seen in China, outside the ethnically tense regions of Tibet or Xinjang.”

The strikers reportedly returned to work today, official sources claimed, after the authorities agreed to adjust fares. But the dispute raises serious questions about the sustainability of a closed political system which provides no institutional outlet for the articulation and resolution of citizens’ grievances.

“Taxi drivers can’t participate in the drafting of polices relating to them, and can’t protect their rights through the courts or labour unions, which means they have no choice but to go on strike,” says Guo Yushan, a researcher at the Transition Institute, a privately-funded think tank. “China has had 60 taxi strikes since 2004. If the system doesn’t change, the strikes will continue in different cities.”

Some China watchers had predicted a “hot summer” of social unrest fueled by discontent over rising inflation. The taxi drivers’ strike is the latest in a series of disputes that are worrying the ruling Communist authorities who are especially wary of workers taking industrial action independently of the officially-sanctioned All China Federation of Trade Unions.

“We have seen these kinds of disturbance on a regular basis in China for several years now. I think you can possibly say there has been a bit of an upsurge,” according to Geoffrey Crothall of the Hong Kong-based China Labour Bulletin. “There is a lot of pent up anger and frustration among ordinary people – not just migrant workers,” he said.

Like with workers in Guangdong finding solidarity an effective tool, groups across China are learning to stick together. How the government reacts to these pushes will be an incredibly important part of determining what happens next.

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Filed under inequality, labor dispute

“China: See No Fortune, Hear No Fortune”

On the subject of wealth inequality, another great post from Evan Osnos:

That is not a surprise, of course, but the report’s details are notable: private wealth in Asia grew at more than double the global average last year, led by China, which saw private fortunes grow twenty-nine per cent. In the next four years, China alone will account for a fifth of all the growth in Asian private wealth.

Where is the money going? Places that are easier to spot than a billboard: sales of Ferraris in China grew by nearly half last year; sales of Lamborghinis in China tripled. Who is driving them? A young, self-made leisure class, according to a survey by Hurun, which tracks the fortunes of China’s rich. The average Chinese millionaire is thirty-nine years old—a full fifteen years younger than the global average—and, among their favorite activities, golf is their preferred sport. (The Chinese millionaires’ average handicap is twenty-six; they must be paying for lessons, because when they cross the $100-million threshold, the average handicap drops to twenty-four, Hurun says.) It’s not all going to a good time. Four out of five millionaires say they are considering sending their children abroad for education, with the U.S. as the preferred destination. (Same goes for Party elites; I can’t remember the last time I met a senior Party official whose child is not at Taft or Yale or the like.)

What’s the solution? Definitely not a return to China’s days of patently false egalitarianism. But banning the sight of a gross misallocation of resources rather than attacking the roots of it—by, say, reforming regressive indirect taxation, and putting a levy on capital gains and inheritance—is a political self-delusion as disconcerting as when Chinese officials used to show each other bogus bumper harvests.

Exactly right.

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Filed under China, inequality

“After the riots”

Tom Lasseter from McClatchy posts some pictures from Dadun village in Guangzhou. Dadun was the site of a riot last week, and Lasseter writes about what he learned when filing the story:

I filed a story this week looking at the causes of recent unrest in China, concentrating on riots that began in Dadun Village in Guangdong Province. My story and others covered the complex set of factors that set those events in motion, but I wanted to also share a sense of what the place looks like.

The first image is of a charred car, a motif of the violence, but the rest give a snapshot of street life in the days after. The area is full of young people, almost all migrant workers who’ve come to work in shops that sew and package denim jeans. Among the usual complaints about low wages and tough work conditions, many I interviewed said they were angry about local security units.

One man who works at a corner grocery very close to where the initial fracas began told me: “The public security teams come to shops’ doors and say they need fees for one thing or the other, but they’re really just collecting protection money.”

Like in America, more and more of the wealth in China is flowing to the top, cutting the rest of the country out of China’s rise. More and more people have complaints like this, and I think more and more of them are coming to understand that the government doesn’t care about what happens to them- and that it will actively antagonize them if they complain too loudly. Riots like this are the inevitable result.

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Filed under China, inequality, riots