The life of Zhang Jiale: Growing public unrest in China over increasing inequalities

Over the past week images of Zhang Jiale, the 22 year old daughter of the electronics, property and insurance magnate Zhang Jun, have gone viral across China after she posted up photographs of her excessively luxurious lifestyle on Weibo, the Chinese version of twitter. The images have added credence to the growing debate around the “fu’erdai” or “rich second generation” who have inherited great wealth from the industrialists and entrepreneurs of the 1980s and 1990s. Comments on the blog ‘China Smack’ (see link below) have highlighted public anger over issues of inequality as well as corruption.

“Our compatriots don’t hate the rich, what they hate is the unfairness behind the wealth.
Our compatriots don’t hate the officials, what they hate is the privilege behind the officials.”

This has come at an interesting time in the evolution of Chinese social and economic history. In February policies were announced by the State Council to reduce inequality through a 35-point income distribution plan. In this the State Council intends to raise the minimum wage to 40% of urban salaries by 2015, increase interest rates for savings accounts and ask state owned companies to give more back to the government. Even with these efforts concerns are still being raised from abroad as the Chinese Regime in 2012, for the eleventh year running, have refused to publish China’s Gini Coefficient which is a common measure for income inequality. In a country where it is estimated more than 13% of the population live under the poverty line with an annual income of around 360 US dollars, there is a desperate need for factual information on inequality such as the Gini Coefficient to be published.

It is hoped that with Xi Jingping’s new ‘hard line’ approach to corruption there will be a stabilisation in the increase between rich and poor, however evidence is still yet to be seen.

Two links to Youtube videos about Chinese inequality:

http://www.youtube.com/watch?v=3F5Qvls798w

http://www.youtube.com/watch?v=XNTGap1Id_o

 

http://www.chinasmack.com/2013/pictures/chinese-rich-second-generation-teens-lavish-life-goes-viral.html

http://www.dailymail.co.uk/news/article-2289148/Zhang-Jiale-Pictures-luxury-lifestyle-tomboy-Chinese-heiress-viral.html?ITO=1490&ns_mchannel=rss&ns_campaign=1490

http://www.telegraph.co.uk/news/worldnews/asia/china/9912090/Bling-lifestyle-of-Chinese-heiress-Zhang-Jiale-goes-viral.html

http://www.ft.com/cms/s/0/e5e12096-71ef-11e2-886e-00144feab49a.html#axzz2N3XKuXa0

http://english.caixin.com/2012-01-18/100349814.html

A look at China’s missing women

In 1979, in conjunction with a number of economic reforms, the Chinese government implemented the One Child Family Policy. The aim of the policy was to constrain the then rapid population growth, in order to facilitate China’s economic growth targets.

Whilst the policy proved remarkably successful in the sense that the population did, indeed, shrink, the One Child policy has had drastic consequences on China’s female population.

What was the problem?

Stemming write back from the Confucian tradition the Chinese have placed an emphasis on the importance of having a son. In the agricultural age (and still in the rural parts of China) men were considered to be physically stronger than women and thus would be in a better position to collect food and provide for their families. Furthermore, in Chinese culture, men habitually stay within their family home, even after marriage and provide for their elderly parents. Women, in contrast, tend to uproot themselves and move in with the family of her husband upon marriage, thus providing mostly for her husband’s parents rather than her own.

These traditional roles of men and women lead to a prenatal disposition towards having sons over daughters in China. However these preferences rarely translated into discriminatory actions toward the birth of females prior to the One-Child policy. Chinese couples often had several children and thus didn’t need to choose between sons or daughters.

The introduction of the One-Child policy, however, turned this practice on its head by forcing Chinese couples to choose between having either an only son or an only daughter. Any perpetrators of the rule would face heavy sanctions, including fines and job losses.

Census data reveals the staggering impact that this policy has had. In China today 118 males are born for every 100 females; a figure which varies around the country and rises to over 150 in some provinces . This distorted gender ratio has lead to an estimated 100 million “missing” girls; a figure in line with the prediction made by Amaryta Sen in his hugely influential article in 1990.

Where do all the “missing girls go?”

The large deficit of females can be attributed the emergence of two concerning practices; excess female infant mortality, and sex-selective abortions.

Excess female mortality is usually caused by infanticide, neglect or abandonment of daughters very soon after birth. Such abhorrent practices are due to couples wishing to dispose of baby girls, in order to be permitted to try again for sons within the regulations of China’s birth control policies.

Yet whilst female infanticide was typically associated with rural families; the introduction of ultrasound technology in the mid 1980s resulted in an emergence of sex-selective abortions in many Urban regions were excess female mortality had not occurred. Evidently, many Urban families who would not consider killing their daughters at infancy, became comfortable with aborting female foetuses at 4 months gestation. In recent years the distorted ratio has become more profound. Although it is suggested that female infanticide is on the decline, this is more than compensated by sex-selective abortions, which, although illegal, result little or no punishments throughout China.

What can the government do?

One option is for the Chinese government is to remove their tight fertility regulations and allow families to have more children. However, as fertility preferences are deeply engrained in China, this rebalancing act could take decades to take effect.

Failing the above, China’s could seek to universalise the monetary rewards that are currently offered in some rural parts of China for having daughters. Yet when distributing the monetary rewards financial corruption and inequality will inevitably be on the cards, as they have been with the “fining”/permitting of families throughout China to have second births.

The Chinese government’s best policy could channel greater efforts into improving the status of women, and reforming the patriarchal family structure. Theoretically, if women were to become more aligned with men, then gender preferences might equalize. Yet although the government has repeatedly tried to raise the status of Women in China in recent years; despite all efforts, women are still inferior to men in terms of pay, job roles and status. Consequentially the gender ratio in China has become more, not less, unequal. Arguably if the Chinese Government wishes to properly correct the gender situation in China, they may need to begin implementing stronger and more influential policies to promote women in China.

Sources:

Sen, Amartya. “Missing women.” BMJ: British Medical Journal 304.6827 (1992): 587.

Sen, Amartya. “Missing women—revisited: Reduction in female mortality has been counterbalanced by sex selective abortions.” BMJ: British Medical Journal327.7427 (2003): 1297.

Lee, Bernice J. “Female infanticide in China.” Historical Reflections/Reflexions Historiques 8.3 (1981): 163-177.

Arnold, Fred, and Liu Zhaoxiang. “Sex preference, fertility, and family planning in China.” Population and Development Review (1986): 221-246.

Plafker, Ted. “Sex selection in China sees 117 boys born for every 100 girls.”BMJ: British Medical Journal 324.7348 (2002): 1233.

Chen, Yuyu, Hongbin Li, and Lingsheng Meng. “Prenatal Sex Selection and Missing Girls in China: Evidence from the Diffusion of Diagnostic Ultrasound.”Journal of Human Resources 48.1 (2013): 36-70.

Luo, Wei. “Women of China Magazine.” Challenging Images of Women in the Media: Reinventing Women’s Lives (2012): 89.

undervaluing the Yuan – catch 22

As controversy surrounding China’s undervaluing of its currency increases, the Senate Finance Committee in the US, in its semi-annual report, has said that Beijing did not meet the criteria to be called a currency manipulator. (If it had then it would have ben subject to trade sanctions from the US).

It claimed that there has been progress over this contentious issue with a 15% improvement in its valuation.

The Treasury claims that the Chinese authorities have reduced the level of intervention dramatically in exchange markets since the later part of 2011.

Since 2005 China has had a managed economy, pegged against a basket of foreign currencies. However, the US has claimed that China has taken steps in the right direction to liberalise controls on capital movements and thus eventually move towards a more flexible exchange rate.

Nevertheless, Chinese authorities have sought to use their competitive advantage in cheap exports to increase demand for Chinese goods after the economic crisis. However, there are many negative consequences of having an undervalued currency as well. Firstly most Chinese households’ buying power will be diminished and secondly there isn’t much pressure, via competition, for companies to develop more innovative products, which not only improve quality of life but also create many jobs.

Some Chinese economists have suggested that China could find better uses for the hundreds of billions of dollars it spends buying United States Treasuries and other foreign securities to keep the renminbi from rising against the dollar. This has an underlying tone of a threat towards the US, which may have been a reason why Obama recently stopped short of labeling China a currency manipulator, despite popular dismay internally at the very cheap currency.

This therefore highlights the catch 22 that the US and China appear to be caught in – The US needs to maintain a good relationship with China to preserve its money supply especially America’s debt, of which China is the largest foreign holder of. Similarly, China needs cooperation with the US due to its crucial market for Chinese goods – the US being China’s single largest exporting destination and thus plays a significant role in Chian’s economic growth and stability.

Consequently both sides are being cautious not to strain this dependent relationship. Thus the US doesn’t want to appear too harsh on China’s undervaluation whilst at the same time China realizes that it is attracting too much negative attention globally and thus needs to address this. But to what extent it will do this remains to be seen.

Sources: 

http://topics.nytimes.com/top/reference/timestopics/subjects/c/currency/yuan/index.html

http://www.financialexpress.com/news/despite-improvement-chinese-currency-still-undervalued-lew/1074117

http://www.bbc.co.uk/news/business-20518490

 

National People’s Congress opens – What promises are made?

On the 5^th of March, “China’s Premier Wen Jiabao promised stable growth, anti-corruption efforts and better welfare provision as he opened an annual session of parliament”.

Economic and Social issues topped Wen Jiabao’s final work report that was released earlier this week. The report comes as the National People’s congress, which contains around 3000 delegates from across China, gathers to see the final stage of the countries once-in-a-decade leadership change, where Communist Party chief Xi Jinping will become president.

The report set a target GDP growth of 7.5% (unchanged from that of 2012), with the promise to create more than 9 million new urban jobs across the Nation. In 2010 the target GDP growth was 10.3% and in 2011 it was 9.2%; the 2012 reduction to 7.5% was the first reduction in the GDP target for 8 years as a result of the Financial Crisis, this year’s target growth however remained lower in order to allow for leeway for economic restructuring. “In light of comprehensive considerations, we deem it necessary and appropriate to set this year’s target for economic growth at about 7.5%, a goal that we will have to work hard to attain,” reads the report. In the second quarter of last year, China’s growth fell to 7.6%, which although within China’s target, dampened hopes about the recovery of China following from the Financial crisis.

“We must maintain a proper level of economic growth in order to provide necessary conditions for creating jobs and improving people’s wellbeing and to create a stable environment for changing the growth model and restructure the economy. We must ensure that economic growth is in accord with the potential economic growth rate,” says the report. In order to create a healthy economic development, economic restructuring aimed at improving the quality and performance has featured heavily in Wen Jiabao’s final work report.

The long term strategy to economic development has also aimed at increasing the wellbeing of China’s population. The report notes that the dramatic changes that have occurred in the Chinese economy have led to an increase in social issues, and that “We must make ensuring and improving people’s well-being the starting point and goal of all the government’s work, give entire priority to it, and strive to strengthen social development”.  A focus was placed upon the pension provision for the poor and the completion of 4.7 million subsidised urban homes with the aim to start construction on another 6.3 million within the year. This was discussed whilst also examining the severe environmental issues posed as a result of economic development; “The state of the ecological environment affects the level of the people’s well-being and also posterity and the future of our nation.”

On top of this, the report reiterated the focus of Mr Xi’s speech after he was formally appointed to lead the Communist Party in November – anti corruption. Mr Wen called for better checks on political power and a strengthened integrity within the political powers. “We should ensure that the powers of policy making, implementation and oversight both constrain each other and function in concert,” he said. In early January Mr Xi promised he would battle both “tigers” and “flies”, indicating that officials at all ranks were under scrutiny, and the re-iterance of anti-corruption within Mr Wen’s report, is evidence of the continued promise within the new government to fight against corruption.

With positive well-being, anti-corruption, environmentally sustainable issues examined and addressed within the report, plus the promise of economic restructuring, could 2013 see a positive change in Chinese society? Or are the calls in the report too optimistic for a country suffering from continued economic downturn, social inequality and environmental degradation?

China’s law on reincarnation

The law which was put in place in 2007 strictly stipulates the procedures by which one is to reincarnate, it is “an important move to institutionalize management of reincarnation” (The Huffington post, 2007). But beyond the irony lies China’s true motive: to cut off the influence of the Dalai Lama. This law means that Reincarnation Applications must be filed by all Buddhist temples in China before they are allowed to recognize individuals as tulkus (reincarnated teachers).  It also means that individuals who plan to be reborn must complete an application and submit it to several government agencies for approval.

“By barring any Buddhist monk living outside China from seeking reincarnation, the law effectively gives Chinese authorities the power to choose the next Dalai Lama, whose soul, by tradition, is reborn as a new human to continue the work of relieving suffering” (The Huffington post, 2007).

The Dalai Lama, who has lived in India since 1959 leading the Tibetan government in exile, is beginning to plan his succession, saying that he refuses to be reborn in Tibet so long as it’s under Chinese control. “Assuming he’s able to master the feat of controlling his rebirth, as Dalai Lamas supposedly have for the last 600 years, the situation is shaping up in which there could be two Dalai Lamas: one picked by the Chinese government, the other by Buddhist monks” (The Huffington post, 2007).

http://www.huffingtonpost.com/2007/08/22/china-bans-reincarnation-_n_61444.html

China’s Missing Girls: The Hidden Effects

Between 1980 and 2000 it is estimated that 22 million more boys than girls were born in China; and in 2008 in was estimated that there were as many as 120 boys to 100 girls. This has occurred as a direct result of the one child policy that was introduced into the country in 1979. As parents living in urban areas were legally only able to have one child, and the role of males within Chinese society is seen to be of significantly higher status, the prospect of not having a son led to an increase in numbers of sex-selective abortions. However, when looking at China’s history it can be seen there are several negative effects associated with female infanticide. In the 18^th Century, during the Qing Dynasty, governments responded to the rising sex rations, which occurred as a result of female infanticide, by encouraging young men to colonize Taiwan. Later in the 19^th century, female infanticide as a result of poor economic conditions, led to social unease when the unbalanced cohorts matured and eventually resulted in a rebellion against the Qing Dynasty.

 

The uneven gender ratio that is found within China, it has been argued, is likely to have significant effects; not only is it expected to lead to increased levels of crime which will undermine the Chinese Governments rule, but it is also likely to affect the way in which China’s political relations with the rest of the world are played out. In short, the infanticide of females as a result of the one-child policy is a ‘geopolitical time bomb’. However the sex ratio can also have a significant impact on individual males. 10.4% of males born between 1980 and 2000 are expected not to marry; in turn this is likely to reduce the economic success of males, and may reduce the levels of care available to them in later years, as they will be without children to support them as they become elderly.

 

It is also argued that with such drastic sex ratios, the prevalence of HIV/AIDS within China is likely to increase dramatically, as the level of ‘risky heterosexual sex’, particularly via commercial sex, is also likely to increase.  Current statistics show that up to 1 million women have a primary income from commercial sex, whilst another 10 million women are estimated to receive a percentage of income from such practices. It is also argued that many of the women involved in the trade of commercial sex have been illegally trafficked, and forced into prostitution, with many women coming from North Korea.

Studies have shown that young Chinese men are more likely to partake in commercial sex than their US counterparts, and in 2000 it was shown that in the provinces of Guangdong, Guangxi, and Yunnan HIV rates amongst prostitutes were as high as 11%.

 

As a result of this growth in commercial sex, and subsequent increase in sexually transmitted diseases, it has been argued that “China’s imbalanced sex ratios have created a population of young, poor, unmarried men of low education who appear to have increased risk of HIV infections.” Although work is increasingly being carried out by the Chinese Government to promote safe sex and reduce the prevalence of HIV infection, if changes to the sex ratio do not occur, the problem is likely to not only be persistent but also worsen over time.

 

Effects such as the increase in HIV/AIDS and sex commercialisation tend to be overlooked when examining unbalanced gender ratios. Effects such as the decrease in child bearing women, and aging male population and the ‘geopolitical time bomb’ are often discussed in relation to the issues of female infanticide. However by overlooking issues such as the increased prevalence of ‘risky heterosexual activity’ through commercial sex, and the illegal trafficking of women to support this increase, the scope of the social and economic consequences of the sex ratio in China will be underestimated.

 

Sources:

Ebenstein, A and Sharygin, E (n.d.) “The Consequences of the ‘Missing Girls’ in China” World Bank [online] source: https://openknowledge.worldbank.org/bitstream/handle/10986/4508/wber_23_3_399.pdf?sequence=1

 

With One Child Policy; China’s missing girls: http://www.washingtontimes.com/news/2010/jan/27/with-1-child-policy-china-missing-girls/?page=all

Ansley,C. and Banister,J. (1994) “Five Decades of Missing Females in China.” Demography 31(3):459–79.

First session of the 12th National People’s Congress (NPC)

On Tuesday March 5th China will open the first session of the 12th National People’s Congress (NPC) in Beijing. This year welcomes in a newly elected national legislature of 2,987 deputies from across the country as well as the new General Secretary of the Communist Party of China and the Chairman of the Party Central Military Commission, Xi Jingping. With Xi Jingping’s declarations to end corruption and reduce extravagance within governance there have been huge alterations to the event. This year’s event will see the increased use of electronic documents to save more than 2 million Yuan (£213,000) as well as no welcoming ceremony for the NPC deputies or traditional police escort of the deputies and political advisors to the Great Hall where the sessions are held. No performances or gifts will be arranged and buffets will be provided without expensive food or alcohol.

The two sessions, it is hoped, will start the process of tackling the uneven development which has resulted from rapid urbanisation as well as issues over soil pollution, illegal house purchases and child abuse problems. There will also be debates over the creation of new super ministries which could entrench bureaucracy and end corruption. Concerns have been raised however over forecasts of increased military spending in the coming year. A spokeswoman for the legislation defended the increased by stating that the ever enlarging military has helped cement global peace. Critics will have to wait till Tuesday however for the release of the annual budget to ascertain whether their fears are correct.

http://english.peopledaily.com.cn/90785/8151328.html

http://english.peopledaily.com.cn/90882/8150654.html

http://www.bbc.co.uk/news/world-asia-china-21651682

http://www.firstpost.com/world/china-to-maintain-defence-spending-fight-waste-647628.html

Poverty across China

When considering non-governmental figures such as  those produced by  the world bank, it can be observed that the gap between the richest in China, who are often situated in the urban areas and those who are poorest, who often live in the rural parts of China, has widened. This is in stark contrast to the rapid economic growth experienced in the country. It could be deemed that the sharp growth which was exclusively situated in certain urban provinces could be a factor heavily influencing the inequality gap. The government’s reforms under Mao were also a major factor that could be seen to have influenced the inequality, as they had an intrinsic focus on selected provinces which correlate to those that are most prosperous in the country of China today. ‘Government policies were also responsible for interregional inequality. In the early years of economic reforms, government policies were particularly favourable to the special economic zones and the open cities.’ (Yao et. al, 2004, p6161)

It could be argued that any kind of growth is good, and although there are some members unable to benefit from the growth hence the huge inequality gap, but the worrying issue is that there is a growing inequality among people living in the urban areas. Although poverty within China is predominately focused in rural areas, increasingly there has been an increase in inequality within urban areas due to rising unemployment and rural-to urban migration. (Yao et. al, 2004)

Naughton, Barry (2007). The Chinese Economy: transitions and growth, The MIT Press.

Chapter 9.1-9.3, pp. 209-221.

 

Ravallion, Martin, and Shaohua Chen (1999). When Economic Reform Is Faster Than

Statistical Reform: Measuring and Explaining Income Inequality in Rural China, Oxford

Bulletin of Economics and Statistics, 61 (February), pp. 75–102.

 

Yao, Shujie, Zongyi Zhang, and Lucia Hanmer (2004). Growing Inequality and Poverty

in China, China Economic Review, 15, pp. 145–63.

 

Park, Albert, and Sangui Wang (2001). China’s Poverty Statistics, China Economic

Review, 12, pp. 384–98.

the Chinese rural poverty line

Since the economic growth of China of the past few decades and it’s climb towards a middle income status, Chinese experts from the World Bank and Chinese ‘think tanks’ have urged the government to raise the threshold to get a better reflection of the poor in China in the rural areas.

At the end of 2011 China lifted their rural poverty line to 1 dollar a day. After the raise 128 million Chinese were qualified as poor, a 100 million increase compared to 27 million considered poor under the old rural Chinese poverty standard, which was 0.55 dollar a day. The Chinese rural poverty line is now closer to international norms of The World Bank of 1.25 dollar a day.  The new limit better reflects the overall higher standards of living of China.

In countries not using the U.S. dollar as currency the living costs of a day are often determined by the purchasing power parity (PPP). This PPP compares the local currency with the dollar by looking how much local currency you need to buy the same things in the U.S. with one dollar. Based on the PPP the Chinese new set standard of 1 dollar a day equals around 1.80 dollar a day in rural China.

In the last decade the percentage of rural population officially considered poor went from 10.2% to 2.8% in 2010. Which is incredibly low compared with other (developed) countries. After the poverty line adjustment to 1 dollar a day in 2011 around 13.4% of the registered rural population was considered as poor. This increase made more people qualified for receiving government assistance. In addition the Chinese government also increased the amount of funding for poverty relief by more than 20%.

The Chinese government is doing a good job here, and yet there is still a way to go to at least reach the rural poverty line 1.25 dollar a day of The World Bank. In saying that, I also think the Chinese government realised that 2.8 percent is pretty low and therefore hard to (visually) improve. By increasing the poverty standard this poverty percentage also increased, which might make it easier for the government to set a goal lowering the poverty rate. And, maybe most importantly, this whole idea of increasing the rural poverty standard sends a good message to the surrounding world and to the Chinese population itself. This might have been a deciding factor for the increase. Or am I now being too suspicious…?

http://www.telegraph.co.uk/news/worldnews/asia/china/8925011/China-raises-poverty-line-increasing-official-poor.html

http://www.guardian.co.uk/world/2011/nov/30/china-raises-rural-poverty-line

http://www.bbc.co.uk/news/world-asia-china-15956299

Sand Storm in Spring Season in a Snake Year

What a way to usher in the new year. China, notorious for its pollution, is suffering from its own acts.Over the first week of 2013, the capital of China seen some of its worst air quality. Who else can be blame except the usual suspects? From the number of vehicles, coal burning to the factories emits and industrial pollution, you name it.

Just as the capital city is preparing for the annual National People’s Congress, the sandstorm hits Beijing and it has reached its record high. Pollution is, amongst many others, a real problem the country is facing and will surely on the priority list of the Congress. A solution is clearly needed as the people are facing to the consequences of the pollutions.

What can be done?

Perhaps it can adopt the practice that is used in another South East Asian country, Singapore. Singapore is a tiny country, 274.1 square miles compared to China at 3,748,000 square miles. Precisely because of its much limited land area, it has to limit the number of vehicles on the road. This is necessarily so to not only reduce pollution but also wary of the fact that uncontrolled number of vehicles will undoubtedly result in massive traffic jams, as evidenced from many cities in the world. The Singapore Government consequently imposes a series of taxes on the vehicles and the cost of owning a car is considerably high compared to most places in the world. This is of course complemented with a sound transport system that runs through the entire country, much to the people’s convenience. By imposing such taxes and complementing with a good transport network ie buses and trains systems, the country not only reduces traffics on the road, but also exhausts of the vehicles. Moreover, this country has a measure where almost 2 million trees are planted strategically all over the country, earning the name of a ‘Garden City.China could use Singapore, a country with one of the highest population densities in the world,  as a case study.

Notably, 16 out of 20 of the world’s most polluted cities are in China as it currently stands. Understandably, Beijing is situated near to the deserts and as soon as the winter snow melts, the dry sands will be exposed to the wind, bring the stinging grit into the air, causing massive sandstorm in the cities. If more changes are not implemented, the consequences of these pollutions will be more stark and frightening. Not to mention health problems on a wider scale, the economy will also be affected when these after effects prevent people from going to work and shops closing.

There is an undoubted allure to this new modern China – a witness to the greatest economic miracle, a potential global super power and thrummed with new money and big dreams, the country is inhibited by many other issues from food safety to human rights and at leastfor now – the smothering pollutions and its effects.

picture taken from: http://world.time.com/2013/02/28/spring-sandstorms-add-to-chinas-bad-air-misery/

As the Times reports states succinctly of the sandstorm ,

‘a reminder that as China tries to clean up the pollution caused by untrammeled development, it also struggles to contain the mess it has faced for centuries.’

see: http://world.time.com/2013/02/28/spring-sandstorms-add-to-chinas-bad-air-misery/#ixzz2MQJuRbhu

Beijing Chokes on Record Pollution, and Even the Government Admits There’s a Problem

http://www.nparks.gov.sg/cms/index.php?option=com_content&view=article&id=173&Itemid=161

http://www.dailymail.co.uk/news/article-2157488/Gardens-By-The-Bay-Supertrees-Singapore-light-night-sky.html