Home › Forums › Short Online Seminars › Contemporary China, Fall 2018 › session #2 - october 16
Hi Folks,
Thanks to all who joined our first live discussion on Tuesday, Oct. 9. We'll post the video lectures very soon, but I know that some of you are anxious to get started on our next set of readings and supplementary videos.
Questions to guide your reading:
1. China's reform period begins 40 years ago at the end of 1978. What caused the Chinese Communist Party to change its economic policies? How did policies change and what difference did those changes make? What factors made China's economic rise possible?
2. China's state-owned enterprises (SOEs) are some of the biggest companies in the world (e.g., banks, energy companies, telecommunications companies). What is the role of SOEs in today's China? How important are they to China's total economic output (GDP)? To employment?
3. In what economic sectors are private companies most important? Which Chinese companies (either state owned or private) are most influential outside China? What Chinese brands do you know? What brands do your students know?
4. While China's economic development has helped hundreds of millions of people escape poverty, many remain poor and inequality has increased in recent years. What has exacerbated inequality? What is being done to address this inequality and to provide greater opportunities for Chinese?
5. How has consumption changed in China? What does increasing Chinese consumption mean for the world?
Assigned readings (you can download these at the links at the bottom of the page):
Wayne A. Morrison, “China’s Economic Rise: History, Trends, Challenges, and Implications for the United States,” Congressional Research Service, 2018.
(CRS is the "think tank" for the US Congress. It is run out of the Library of Congress. We have collected many of their China-related reports at: https://china.usc.edu/section/documents-us-china. Please encourage students to utilize the resource section of our website.)
Li and Yuan, Skills Shortages in the Chinese Labor Market, 2017.
Please scan the following (don't worry about reading every word, look at the graphs, read those sections you find interesting):
China Daily, Infographic on eradication of poverty, 2018 (a paid ad in the Telegraph newspaper)
Economist Intelligence Unit, "The Chinese Consumer in 2030," 2016.
Week in China, Our Guide to the Pearl River Delta, 2016. (This is a good introduction to the area that launched China's economic reforms. This has many interesting charts and maps.)
Assigned videos:
Li Hongbin, China's Educational Inequality, 2011 (https://china.usc.edu/li-hongbin-chinas-educational-inequality-evidence-college-entrance-exams-and-admissions 22 minutes)
Also available at our YouTube channel: https://www.youtube.com/watch?v=TytRA7GgXWo&feature=youtu.be&list=PL92F68ABAB424D5FE
Discovery (China Channel), WeChat, 2016 (13 minutes) https://www.youtube.com/watch?v=EF-E841WYe4
Or NY Times, WeChat, 2017 (6 minutes) https://www.youtube.com/watch?v=ec77S25kuVs
Reuters, Chinese consumers move away from pork, 2017 (first story on this page: https://www.reuters.com/article/us-china-meat-demand-insight/chinas-pork-demand-hits-a-peak-shocking-producers-as-diets-get-healthier-idUSKBN19A31C 2 minutes
World Bank, Empowering Farmers and Implementing Modern Irrigation, 2016 http://www.worldbank.org/en/news/feature/2016/11/18/empowering-farmers-and-implementing-modern-irrigation-helps-china-reduce-water-consumption
UN Food and Agricultural Organization, Growing rice and raising fish for income security, 2016 https://www.youtube.com/watch?v=A5PVnkKIsmY
Gobetweenfilms, Growing Rice https://www.youtube.com/watch?v=TlorhIHOkLs 3 minutes
Please hit reply to comment on the ideas in these video lectures.
The first video begins with a quick look at the nature of the Chinese economy 1949-1978. China's economy was among the poorest in the world. On a per capita basis, the Chinese economy only generated $90 in 1960 and $113 in 1970. At the dawn of the economic reforms initiated by Deng Xiaoping and his associates, in 1980, the economy still only generated $195 per person. By 1990, the figure was $318, markedly better.
Lecture 3: "Reform and Opening"
The second lecture in this section focuses on the rapid growth over the last 25 years. We explore the East Asian Development Model that helped Japan, South Korea and Taiwan enter the ranks of rich economies. We look at how China hopes to avoid the middle income trap and join those places among the high income societies. It faces numerous challenges that we highlight.
Lecture 4: China Shakes the World
In professor Dube's mini lacture, I found an interesting fact in the Heathy Life Expectancy map. In the map ( see attached screen shot), it shows both male and female living in the three majoy autonomous cities: Beijing, Shanghai and Tianjin are the top longivity cities. Besides the bad weather in Beijing, severe air pollution, or serious driniking water shortage in Tianjin, these three major cities with citizens equipped with higher education are living longer than the other cities.
Base on the data found in China, I can see that a healthy lifestyle could overcome the naturally living conditions?
I am attaching the screenshot from Professor Dube's video lecture above regading the GDP China vs. USA.
According to the chart, In 2018 the Chinese GDP is $7,080 which is around 15% of USA's GDP $62,520.
But I want to argue that considering the few cities produce majority of the incomes vs. the huge portion of denominator due to the large population, the ratio of GDP comparation China vs. USA which is 15% cannot be accurate to evaluate the incomes in China's major big cities.
First, the housing price in Shanghai, Beijing is much more expensive than California and some even closed to the price or New York.
Next, the education fees that parents spend on their kids are unblievably high. I heard from my recent summer trip to China that an avarage education fee per child per month is from $ 2000 to $5000 for extracurricular only.
Those middle class Chinese whose monthly income is around $3,000 to $5000 can afford the living and education expenses in large cities such as Beijing or Shanghai. So in these cities, the GDP should be closed to USA.
In Prof. Dubes mini lesson 4 to ward to the end, He mentioned about several challenges that China facing now ( attached screen shot) which I cannot agree more:
Lack of global brands: compared to South Korea, China is 44 times bigger than South Korea, however, this little country as Korea has so many global brands such as SamSung, Hyundae, LG and so on. However, China barely have any global brands. I wonder what is the reason that China cannot create it's own global brands?
Little social trust: So true that in China, Chinese citizens do not trust their government especially the rich ones. They do not trust any of the Insurance companies nor investment products. The rich Chinese are immigrating to develped countries searching for secure retirements and preserve their assets. I wonder why they have so little social trust and are there any solution to it?
Thanks, Jane, for thought-provoking questions about China's challenges. I think China is lack of global brand partly due to its educational system and instructional pedagogies. Traditionally, Chinese children were taught well following their master's (or teacher's) mind, they were not encouraged to challenge authorities and create their own solutions. Lack of creativity puts a lid on innovation.
China has little social trust, the rich migrates to developed countries for security. I think it's rooted to socialism which is a centralized government control system. Individuals are lack of ownership, even personal assets. For example, when a Chinese purchase a house, he/she owns the right of use for 50 - 70 years, the person does not own the land beneath the house foundation. The land is leased by Chinese government for 50 - 70 years and the lease needs to be renewed once it's expired. The rich in China do not feel secured of their personal assets. This may be the reason why they invest their money into properties in other developed countries or migrate to other countries where individuals can truly own their assets.
What interested me was the change in social norms with the establishment of the Communist party. Mao uses propaganda heavily in promoting the culture he envisions, though the ultimate product of the Great Leap Forward seems to me to be a clash between idealism and reality. I thought the new idealism of Communist China was best demonstrated in the first slide showing early propaganda posters, in particular I focused on the one on the left, of the man fixing/installing the light. Looking at it from an Art Historical point-of-view, the warm colors and bright light create a cheerful atmosphere, the children are on the fringes of the compositon but are noticeably interested in the tools and materials for the job, and all of the lines, especially lines of sight from the figures within the poster, are focused not on the citizen but on the hands and work being done. The ladder points upward and the composition is asymmetrically balanced but the woman's hand with the lightbulb and the man's hands with the fixture form the focal point of the piece. Propaganda is an extremely powerful tool and has a way of subtley changing the mind by suggesting the way things should be. What Mao was aiming for was to change the social norm to one of cooperation first in order to increase and maximize productivity. Interestingly, it was not until later, after Mao, when Deng Xiaoping relaxes the rules of the commune system and allows for the improvisation of the populace, in particular the rural population, that the economy begins to rise. Robert Sternberg (1985) posed that some of the ingredients of creativity include expertise and time for rumination and I believe that when given the freedom to "stretch out" with the relaxation of the social rules, the people were able to begin the enterprising process of improving quality of life through their own industriousness. I'm interested to learn about the extent to which that reinforced the Communist social norms.
Entrepreneurship is a modern phenomenon in recent decades when private businesses are allowed. The millenniums launch businesses to create a new life for themselves. To my knowledge, many young Chinese people open their own businesses after earning a degree from Western countries because they want to try their own ideas and live a life they want. One of the successful Chinese entrepreneur is Jack Ma, founder of Alibaba. Jack was an English teacher. I'm wondering if his venturing idea was inspired from his English learning. He ventured his Alibaba business outside of China and it became a well-known business in American and the world. He certainly has benefitted from his English learning which develped his global vision. However, while Alibaba is enjoying is global success, Jack Ma announced his departure from Alibaba this year. I'm wondering why?
China has income and opportunity inequality like many other countries. The eastern part of China is well developed and has much more capital and resources than the western part of China. The east coast cities like Shanghai are industrialized and are more open to the western world, and people have more money; on the contrary, vast lands of western region are not even developed with few populations. People in the west are poorer. These income and capital disparities lead to inequality of education and other opportunities.
Although elementary to high school education is free by the norm, elite schools are hard to get in and cost much more. People with low income aren't able to send their kids to the elite schools which employ higher qualified teachers. And students who graduate from those elite school have better chance to enter good universities which are highly concentrated in the eastern regions of China. Closing the gap of income inequality between the east and west of China is a tough challenge for China as well.
It's interesting to note that "关系" (social connections) entered into the Oxford Dictionary in 2016. It's known that"关系" (social connections) is a key to success in China. Are western coutries adopting the notion of "social connections" for upward mobility? America is a fundamentally merit-based system although social connections - human capitals - do play a role in life.
Xi wants to revive and make China strong again. Part of China's ambition is to increase its soft powers and influence the world. One of the good examples is Confucious Institute which supports Chinese language training in America and other countries. It has partnered with many K-12 schools and universities across the U.S. to provide Chinese langauge training. Other endeavors include exporting more Chinese films to other countries and hosting Olympic Games. Will China's rising economic powers be paralled with its soft powers?
I’m interested in seeing where China’s emerging economy is going. Just by the growing numbers of the middle class, we can see people being lifted out of poverty and to a higher standard of living. I found the charts and graphs indicating the numbers for 2030 that show the low middle income growing more than any other group as a good sign for China’s economy, society and citizens. The people are shifting and will be spending their money differently as well. I imagine that the chart showing what people spend their money on will change as well. People will be spending more discretionary income on recreational activities and items. What I can foresee hindering the economic growth of China are the government policies. There was an interesting line in one of the readings that mentioned “communism can never marry capitalism.” WIll China ever really be a free market if they continue to have policies that interfere with economic growth?
One of the questions that I have is about what professor Hongbin said that one generation Is rich and the next is poor. Is it because the sons and daughter of those who have money do not worry about working anymore and trust that the system will have a job waiting for them when they are ready and the inverse of the rich will happen to the poor generation. Also, he talks about one way of moving up in society is thru education and of course those who have the means of paying have the advantage. So those who have, they will continue having and those who do not have, they will stay the same. It is more likely. That is the part that I didn’t catch because here, if I am not mistaken, USC have rich, rich students as well as poor, poor students and in the middle, which is a door for the poor to get into a prestigious university and live better or claim the social ladder. In addition, he also talked about education which is like US system and his findings are almost the same among males and females in language (Chinese and English) and art. females score higher than males. But in math and science males scored higher in that sense it is almost as ours. It might change.
According to professor Park, he said that labor regulations were developed to protect employees from employers. Employees would not be fired after ten consecutive years of working in one place. With respect to education, he adds that the government has spent a lot of money educating migrants to capacitate them for the industrial jobs. That brought some implications from the locals because the migrants are taking their jobs. Above all, it seams that the system is working, and they are living better and expending money and getting into debt and trusting more at the system.
The communist party realized that their system was not working. It was keeping them poor they had to reform its policies to succeed. It wasn’t that easy and quick. One the most successful policy was to empower the people. That was a good incentive to produce more and help them to live better. Also, what boost china’s economy was chip labor. Today china’s economy is very strong in electronic supplies from televisions, radios, clothes, telephones, watches, and accessories of any kind. Also, most Chinese people are consuming items that are not built in china and that helps countries to sell them their products too, due to its large population. As the same time, they have become a target for marketing from other countries’ products. On the other hand, China will continue representing a huge challenge for US and other industrial countries if they manage to put in place the program “made in china.”
Those final propaganda videos, especially the rap version with the mantra "everybody let's be friends", makes me wonder if China is looking to bring in new labor. With their own work force shrinking and the population aging, would China possibly want immigrants to move there and bolster the labor population? Is their propaganda designed to entice other countries to be like China or just to be receptive to relations with China? As their economy grows and their wealth gap increases China seems more capitalist and so may seem easier to cooperate with in the global market.