Week 3 - China and the Global Economy (February 14)

[Courtney Caldwell]

I found the part about the low retirement age (54) to be interesting and the comparison to OECD countries having an average retirement age that is 10 years older. I know the lecture mentioned how China needs to and has been trying to raise the retirement age but has been receiving push back on raising that age. I'm wondering why that may be? Additionally, what the consequences may look like if that age remains low. It also made me consider why we have a retirement age of 65+ here in the US. Is this purely a result of our social security system that really relies on people to remain working and paying into it? Is it because it's been engrained in American culture to live to work? Found it quite interesting. 

[clay dube]

Today, the LA Times published an article about efforts by a Chinese factory. which mainly turns out clothing for other companies, to build its own brand. A nice discussion of how market changes challenge Chinese manufacturing. You can read it via this link or the pdf below.  (the article originally appeared on 2/9 on the web and 2/18 in print - the headlines on the two versions are not the same)

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[Kirstjen Pollock]

Courtney, I agree, it's super interesting to watch unfold. There's a fake Paris and a fake Venice near Hangzhou that I visited once with friends -- very funny. Though most of the ghost towns/potemkin villages are on the outskirts of cities, there's a building near my house that hasn't been built in the 13 years I've lived here and it always makes me laugh/wonder.

From what I have read, there hasn't been a massive government response yet. There have been some lawsuits, but I believe that the central government is leaving it up to local governments to solve the problem. The gov't/gov't officials may also have money tied up in the bubble and are therefore not interested in fixing it. "The housing sector brings critical fiscal revenues to local government and gross domestic product growth to Beijing" (https://www.ft.com/content/b9f17616-3654-4a04-a778-e7fa66d8a898)

Also this is interesting: https://foreignpolicy.com/2023/01/10/chinese-communist-party-property-bubble-real-estate/

But I've mostly read the more humanistic stories on Sixth Tone, which describe the despair of individuals whose homes have not yet been built. 

[Kirstjen Pollock]

Hey Courtney, 

I believe China needs to raise its retirement age for the same reason the US age is increasing to 67: a shrinking working-age population. There is pushback because the government retirement has been considered good enough to support one into old age, and with cuts to those benefits and increases in age, people feel betrayed. 

Your comment: It also made me consider why we have a retirement age of 65+ here in the US. Is this purely a result of our social security system that really relies on people to remain working and paying into it? Is it because it's been engrained in American culture to live to work? 

-- I think we are seeing changes in China on both sides of your question -- the social security system in China relies on people working and paying into it, and Chinese culture is in the middle of a shift towards spending more time working. Many young, educated urban residents live to work, creating the "9-9-6" work culture (9am-9pm, 6 days a week), while those who work more labor-intensive jobs look forward to early retirement. 

Here's an article to read more: https://www.nytimes.com/2023/02/15/business/wuhan-china-protests.html

[Kirstjen Pollock]

Brendon, you are right that many students are motivated to study abroad. It's also because of the pressures of the one-child policy that many Chinese kids seek education abroad. 

While there are a number of IB schools in China, the truth behind each school is often difficult to ascertain. Increasingly, they are schools that offer IB to international passport holders (often Chinese children who were born abroad to avoid the one-child policy) but Chinese curriculum to citizens. Some IB schools only carry a portion of the IB, and other chain schools are IB certified in one location but not in the many other locations around China. Nonetheless, these schools are attractive to families seeking an alternative to Chinese national curriculum -- whether due to citizenship issues, Gaokao pressures, a child who doesn't fit well into a classroom of 48 peers, or other reasons.

Education carries huge pressure in China. To that end a new law was passed in 2021 to limit tutoring with the aim to decrease the pressure on individual families to provide expensive education to children. 

[Kirstjen Pollock]

Hi Everyone, 

Every year I visit the UN's World Economic Situation and Prospects report to explore how China fits in with the rest of the world. My students are always surprised to see that China is listed as a developing country, and then we look at stories from rural Chinese citizens to explain how and where China is developing. But every year during the introductory lesson, I struggle to find the right data for the students to work with to figure out WHY China is listed as a developing country. Gini coefficient is the easiest answer, but in recent years, China and the USA share similar numbers, so I can't point to that as the cut and dry response. 

Has anyone looked into this for 2023, and do you have any great resources to pass my way? I would love some help! 

[Elizabeth Quintero]

I found the video “How China Became and Innovation Powerhouse” very fascinating. I do not know much about China’s economy, but I have often heard so much talk about how China is going to “overtake” the U.S. and that we are unable to compete with them. This video put the why China’s economy and innovation is so strong in a clear straight forward perspective. There has always been this idea that to innovate and have a strong economy, the government needed to be democratic. Authoritarianism is thought to kill innovation and instill fear and restriction in your people. China is the greatest example of why this is an exaggerated, outdated outlook. I found it especially interesting that The Great Firewall, which was originally created to protect China’s information, evolved into a tool to ensure that Chinese internet startups could rise without the American or western internet platforms competing against them.

Also, the video talked about how China has sought out and kept ties with researchers and companies around the world, this being seen with numerous Chinese engineers, professors, scientists working around the world. This has often been met with criticism and hostility by many politicians in Washing D.C. as some people see these connections as a move by China to steal American jobs. The video clarifies that the Chinese government has not been the master mind behind this move, the driving forces have been companies who want to work together with other companies around the world, to reap the financial benefits. I notice that most of the products that American consumers use come from China. It’s obvious that the “keep China out” strategy would hurt our economy much more than it would help us. It makes much more sense to observe and learn from Chinese strategies and adapt them to American markets and our needs.

[Kirstjen Pollock]

Hi Elizabeth, 

You're right that this is a great introduction to help people understand China's rise to economic power. Your thoughts have made me reconsider my lesson plans for upcoming classes and I am definitely going to include this video as a review, before showing a documentary called "Ascension," which goes into further (somewhat abstract, somewhat personal) detail about it on a micro scale. I really appreciate your comments! 

[Brendon McGirr]

Thank you for sharing this, I have not heard of this one. This looks like it would pair really well with my development unit. Do you do any type of activity with this? I could see a collage activity comparing the working culture of the US and China, or some sort of creative writing journaling applying concepts.

[Jenai Sheffels]

It may not be a negative reflection on China, but it is interesting to consider that Chinese students still seek out a U.S. education when there is once again so much anti-Western sentiment.  I guess I would expect the party to keep tighter control on where students attend.  I listened to a lecture at my alma mater, the University of Washington, where they had done exit interviews with Chinese exchange students.  They wanted to know about preconceptions of America before coming, what they had appreciated while being here, and whether they would want to stay.  They learned that there were Chinese "minders" of sorts who frequently checked in with students, presumably to check the courses they were taking and to ensure they were not indoctrinated.  At one point, UW was asked to alter one of their classes (I think it was a poli-sci or international relations class) re: the Chinese content, but declined to do so.  What the researchers found was that the students appreciated all the freedoms they enjoyed in the US, and recognized them as such, but did not feel they'd want to live here.  I found that fascinating--that you could enjoy a newfound sense of civil liberties and exploration but still determine it was better to return.  If I remember correctly, I think the questions were asked in a way that had them choosing systems and not other extenuating circumstances.

[Kirstjen Pollock]

Hi Brendon,

We use Ascension as a lens into middle class Chinese lives and work culture, also noting the biases in that it is a piece of art. Our Ascension discussion uses the visible thinking framework "See Think Me We" in an attempt to help students connect. http://www.pz.harvard.edu/resources/see-think-me-we

My unit is a grassroots history unit about gathering multiple perspectives, so we then compare the perspectives in the documentary to the voices in few other story choices from around China, and then to interviews that my students have conducted with their own family members.

I like the idea of comparing Chinese work culture to American work culture, but I would recommend adding some sources that better show the "9-9-6" work culture of the services sector. I would also include some data about the Chinese economy. Specific to Ascension, I like comparing labor force by industry sector as in these 2 charts, to show that China needs to move to a service economy as it works to escape the middle income trap. 

https://www.statista.com/statistics/270327/distribution-of-the-workforce-across-economic-sectors-in-china/#:~:text=The%20statistic%20shows%20the%20distribution,percent%20in%20the%20service%20sector

https://ourworldindata.org/structural-transformation-and-deindustrialization-evidence-from-todays-rich-countries

[Jenai Sheffels]

Yes and no--perhaps Professor Dube can weigh in here.  I seem to remember one of the caveats to doing business in China was sharing IP.  I can't remember if this is only in the SEZs or just business in general.  You could certainly argue that U.S. businesses make a choice to agree to this in exchange for access to the huge Chinese consumer market and cheaper labor, but they do not release the rights and patents of their IP.  Yet, as we know, it is intellectual property, expensive brandnames and even patents that are copied and exploited.  This seems to be hugely problematic.  Initially, in both China and Japan, wasn't it the West that was sending advisors and machines to help China industrialize so we could do business with them?  Then at some point they learned to build those machines and even perfect them on their own.  This isn't necessarily innovation since they had a leg up to start with--they didn't have to go through the initial research and development or trials and testing.  There was just an interesting article in (I think) the Economist about how China is still treated as a developing country and yet they have the second largest economy at this point (soon to be first according to most).

[Jenai Sheffels]

Kirstjen, this is one source: https://www.economist.com/finance-and-economics/2022/02/04/china-may-soon-become-a-high-income-country  

[Kirstjen Pollock]

Hi All, 

My student's grandfather signed the agreement for China's accession to the World Trade Organization, and he is coming to speak with my school next week. I'm thinking of holding an extra session one evening for anyone interested in learning the issues surrounding China and the WTO. 

A quick search gave me these 2 articles, which seem to offer both sides of the argument: 

https://world101.cfr.org/global-era-issues/trade/what-happened-when-china-joined-wto

http://sl.china-embassy.gov.cn/eng/zt_1/WTO/

And this map is also helpful in my mind: 

https://www.wto.org/english/res_e/statis_e/statis_maps_e.htm?country_selected=CHN&optionSelected=3

 

Any other nominations for resources? 

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