Home Forums Short Online Seminars Contemporary China, Spring 2021 Session #2 - February 9

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  • #8295
    stubing
    Spectator

    REQUIRED

    Readings 

    Please scan the following (don't worry about reading every word, look at the graphs, read those sections you find interesting):

    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?

    Videos

    2a. Reform and Opening

    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.

     

     

    2b. China Shakes the World

    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.

     

     

    OPTIONAL

     

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    #45158
    clay dube
    Spectator

    China's expansion of higher education is helping the country dramatically expand the professional class. There's still elitism (see the Li talk under optional above for this). Scott Rozelle's talk on Thursday explored the challenges facing China because high school education eludes too many of China's rural students. You can watch at our website or YouTube channel: https://www.youtube.com/watch?v=_gRKg_RXV1M&list=PLEAC41A08E1EE341A

    #45160
    Johnny Walker
    Spectator

    In thinking about China's economic trajectory, I find myself relating and comparing it to other historical models that I teach. The struggle I have in our 10th grade World History curriculum, or with the AP World: Modern is that post-War Chinese History is often one of the last units and has a limited time frame. Given the complexities, I'd like to determine the most efficient explanations to relate modern China to my students.

    I think I'd most likely like to start at the end, with the Belt and Road Initiative. The propaganda song video is hilarious and disconcerting which would make it a perfect jumping off point for my students to ask questions to put it into context. There are also some excellent news videos on PBS about the initiative where it is directly compared to the ancient Silk Road (of which students are familiar).

    Based on the two lectures, I would begin by stressing Mao's Stalinist model. The concept of 5 Year Plans, Agricultural Revolutions at great human cost (we study the Holomodor Ukrainian Famine) followed by a massive yet largely unsuccessful Industrialization campaign and a cult of personality seem to generally cover the period from 49 to '68. The Cultural Revolution is so fascinating, but I'm not necessarily sure how to weave that into the narrative of modern China. And, the Korean War will likely get little mention in this year's curriculum. Then, the post Mao era reminds me of the post Stalin era. Economic opening of the late 70's and early 80's and opening/detente with the US was somewhat similar to Kruschev's greater focus on consumer goods, de-Stalinization and visit to the United States. Of course, western companies did not use Soviet labor to manufacture products. But, the second-rate Soviet consumer goods and companies that were the butt of so many Reagan jokes bear some semblance to China's insular and not globally known brands. Likewise, the Chinese agricultural model that allowed for a modified form of capitalism after hitting quotas reminded me of Lenin's New Economic Policy. I really enjoyed the photographs and propaganda in the lectures. I'd love to use them with my class and also compare them to similar Soviet propaganda. I also really enjoyed the link to the New York Times videos about the Chinese social media companies that use all encompassing services and data. My students would be fascinated with that. And, it's such a clear way to illuminate both the ease and convenience as well as the dark side of an all encompassing surveillance app that people eagerly use.

    Nevertheless, in order to efficiently map China's economic opening and restructuring, I really liked how the graphs in the second lecture about per capita GDP, FDI (foreign direct investment) and demographics (life expectancy by gender) told such a rich story of modern China in three charts. As part of the C3 initiative, I've been trying to incorporate more civics, geography and economics in my curriculum, and I think my students would really benefit from learning about, analyzing and comparing these charts with other nations as well. And, based on the rising levels of economic inequality there, I'd like to also find a graph of the gini curve to demonstrate that concept to the class.

    But, I really like beginning the lesson at the Belt and Road Initiative. It would serve to have students wonder where is China going and how it arrived here. Then, I'd use Soviet models that they are familiar with to explain the Mao years and then introduce several economics concepts to explain its modern trajectory.

     

     

    #45161
    China changed economically because it was failing to support its people. Food sortages and famine could undermine the success of its communist revolution. The opening up of China enabled foreign investment and a movement away from a purely agricultural economy.
     
     
    By allowing the people to move away from farming and into the factory setting enabled the standard of living to increase. Allowing some 'side' work also enabled people to earn more, save more, and live at a higher standard. Foreign investment, entry into the WTO, and government control enabled China to rise to become the second largest economy in the world and may push it to number 1. The photos of farmers, to factories from 25 years ago to more recent factories are fascinating. 
     
     
    State owned enterprises have enabled China's economy to grow, as well as the overall standard of living. However, the wealth gap is increasing, which is a problem to a communist nation. They are also a nation of consumers, which may backfire in the future. While important to the economy, SOEs may not be common knowledge to average Americans. While I recognize many of the names I do not think my students would, except for maybe ByteDance, the maker of the app TikToc. This may change though, as China has opened up trade wih numerous nations throughout the world, expecially since joining the WTO.
     
     
    Also fascinating is the purposeful slowing down of the economy and the push for higher product production. While China's economic development has helped hundreds of millions of people escape poverty, many remain poor and inequality has increased in recent years. This is a regional problem with the East and coastal regions earning more. The 13th 5 year plan is attempting to addess this as China continues to grow as a munufactuer and consumer. The Belt and Road Initiative is attempting to improve conditions in China, both to the community and individual. I look forward to learning more about it.
    #45162
    Tara Ann Carter
    Spectator

    The CCP changes it policies under Deng Xiaoping as he begins to modernize and open up China as a global market. Additionally, rural people were lifted out of poverty as manufacturing and corporate interests work in collaboration with the Chinese government. Deng Xiaoping's remarks that it's okay for some people to get rich in efforts to elevate the country, which hint toward the openness in trading and business, encapsulates the possibility of China's rise. By working with outside economies in tandem, China has the manpower in the wings, and stood ready to transform into a global superpower. To the effect, I think more and more students (and adults) are aware of Chinese companies. In addition Huawei, Ali Baba and Hyundai are companies that remain increasingly part of the public conciousness as economic markets become increasingly globalized. 

     

     

     

     

    #45163
    Ryan Carothers
    Spectator

    The rapid economic development of China reminded me of what happened in Great Britain and the Unites States. But, instead of taking three centuries --- it took a few decades. Based on this rate of growth, The Belt and Road Initiative underscores the need for competitive structures to be built in the West --- if we wish to remain competitive. I am thinking about the Trans Pacific Partnership. New Skills at Work highlighted some of the weaknesses in China's economic structure, and included some suggestions that would allow for continual growth. I thought it was interesting J.P. Morgan encourages increasing access to universities, and vocational training to retool workers. Also, that they encourage giving workers more incentives or buy-in to the industry that they are in (thus, increasing worker productivity). It would be good for us to follow similar advice in the United States. I think it would be good for students to compare, and contrast the issues that help or hinder economic growth in China, and the United States. J.P. Morgan might have a similar article on the United States that would make for an easily constructed assignment. I'm thinking the students can read both of them, then discuss a set of questions and propose solutions within a small group. 

    #45164
    Allison Murphy
    Spectator

    What I found interesting with both lectures is what happens after Mao dies. China goes from a nation looking within to solve economic inqualities to then almost being forced onto the global stage. After decades of trying to use what was within China's borders (agriculture and industry), to now an integral section of the global economy. Deng acts similarly to that of Gorbachev in the 1980s and opens China up more and more to foreign investors and businesses within China's borders. Their growth rate is also interesting to me. Based off the statistics given, growing from 2.4 trillion to 12.2 trillion and competing with the U.S. sounds huge (and is), but I wonder if we compared that growth to other industrialized countries in the same economic development stage, would it compare or because China is growing now, does that make the growth more powerful? I also wonder how data will be effected due to the pandemic. Will their 5-Year Plan be pushed back and if so, what does that mean for the global economy? 

    #45165
    Gisela Gaona
    Spectator

    As I read through the readings and perused the infographics, I was quite taken aback by how quick China was able to build up their economy into transforming into the 2nd largest economy in the world. I took particular interest in one of the infographics that laid out the numbers per million of Chinese living in poverty throughout the years. I was astonished to see that the number was well over 600 million just 30 years, and now is down to a very low figure. As a macro-econ teacher, I always try to think about how to frame China’s ever growing economy in comparison, and perhaps in competition with our own American economy. 

     

    One great exercise that I am planning to employ with my students is to create a Google Slides presentation where we talk about the infographics and their implications both on the domestic level in China, and at the world stage internationally. I am also planning to assign as a short reading part of the Skillsgap in Chinese labor market. China was able to boost their economy to magnificent proportions largely through the vehicle of cheap, unskilled labor. However, as China transforms their labor markets, it also transforms the type of labor China requires. The assigned reading did a great job at explaining where the past and present labor needs are, and the projections that China will need to implement to maintain their stakeholder as a major world economy.

     
    #45166
    Ray Clark
    Spectator

    I agree with Ryan on his above point about J.P. Morgan doing a similar report on the United States, because that was one of my first thoughts, but I just finished that article around 2:30 today! 

    Actually the lectures and the readings brought up many questions that I hope will be answered, either in the upcoming sessions or by someone who knows more than I do.  One of those is that while China does have significant challenges, for example the poisoned environment, is it being dealt with as seriously as it needs to be, uniformly?  I look at the United States &  Mexico as examples, that there are policies in place in certain areas, but there are also pushbacks at all levels against enforcing of national standards that would be universally beneficial in the longterm.  

    I would also like to understand the shrinking labor force better. Both videos and several of the articles mentioned the migration towards the cities and jobs, but I also noted that there was a disconnect from schooling (for the children of migrants, for example), to the jobs or even the training that would prepare them for the jobs that are needed.   In a related point, I wonder if the lack of "social trust"   that Clay mentioned is in large part due to the migration of the past few decades, since people are no longer as connected to their previous communities, there is more mixing of people  from different areas of China, as well as a scrabbling for resources & opportunities, in addition to increased income inequality. I would add that an ever increasingly powerful surveillance-state does not help matters.

     

    #45167
    clay dube
    Spectator

    Johnny, the Soviet example loomed large, in part because of the USSR's "socialist brother" status, the many advisors sent to China, and the training some received in the Soviet Union. The role of five year plans is significant. You'll see many business organizations and companies paying a lot of attention to the goals included in the plan. No idea if they are recording an English-language propaganda video to accompany the roll-out of #14 in March.

    The plan was discussed at the Party's Central Committee plenum last fall and leaders met in December to hammer out the details. It will be presented and ratified at the National People's Congress in March. Every level of government will have its own plan, to support the central agenda.

    At the same time that all this planning is going on, the private sector is where most Chinese work and where a large share of the country's GDP is produced. How might we teach about the usefulness and potential problems of a planned economy and how China continues to "build socialism with Chinese characteristics"?

     

    #45168
    clay dube
    Spectator

    Jeanine, you've hit on one of China's worries. How to build brands that represent quality and innovation? Here's an article in China Daily about top brands. Perhaps students might research the history and standing of these companies?
    http://www.chinadaily.com.cn/a/201907/16/WS5d2d00c2a3105895c2e7d902_1.html

    #45169
    Jonathan Alami
    Spectator
    1. In 1978, the Chinese Communist Party (CCP) changed its economic policies as a result of its change in leadership. When Deng Xiaoping became chairman of the CCP, new economic reforms were introduced to gradually steer China away from a centrally planned, command economy towards a more open, free market system. Economic reforms introduced an element of privatization into the Chinese economy--for example, farmers were leased plots of land by the commune and were allowed to keep or to sell anything they produced above their quota. New factories from international firms were also allowed to set up shop in China, creating a flood of new better paying jobs. People grew richer over time as a result of these new economic changes. 
    2. Many industries in China are state owned, including banking and telecommunications. These industries take up a large share of GDP and are large sources of employment. Despite the presence of privatized firms in China, large parts of the economy remain centralized and state owned. 
    3. A Chinese company that is influential outside of China is the tech firm ByteDance. It has gained more recognition in the United States in recent years due to its connection to the popular social media platform TikTok. Students may possibly have heard of this firm due to the popularity of TikTok. However, due to the lack of Chinese global brands, the number of Chinese companies students have heard of are few to none. 
    4. As millions of people have migrated to coastal cities, the gap between urban and rural wealth has grown. Rural poverty continues to be a challenge in China, despite progress in recent years. Inequality between the eastern and western portions of the country has increased as almost all of the manufacturing and exporting industries that have driven China’s economic boom are located on its eastern seaboard. 
    5. Consumption has changed in China as its population grows wealthier and services take up a larger share of the GDP. More people are entering the middle class in China and have greater disposable incomes. This has driven consumer spending and led to the proliferation of services (such as McDonald’s delivery service). 
     
    #45170
    clay dube
    Spectator

    Ryan and Ray, the issue of skills gap is a huge one. Such studies do exist for the US. As you suggest, it might be interesting to compare the assessment of where we both are with where we need to go. How does the Morgan study fit with what Scott Rozelle warns: website | youtube

    #45171
    clay dube
    Spectator

    Allison - the middle income trap is the threat here. The low-hanging fruit has been picked. Justin Yifu Lin argues that consumption will produce three more decades of growth, but Scott Rozelle is worried that China needs to expand rural high school availability: USCI | YouTube.   Here's a CNBC report that draws on Justin Lin's expertise.

    #45172

    I appreciate the link- very useful and  agreat idea. It may take China some time to get past the 'quality' question, but on a personal note, I have seen better quality in my lifetime! 

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