China the land of contrasts

29 Mar

China the land where billionaires are in Congres, making the laws and representing the interest of the people who need help. Rural China is still not at a developed level when it comes to basic needs such as housing and food, while in other parts of China ultra modern cities are rising where only people can live who have vast amounts of money or investors in the real estate business. This China, that became a remarkable economic success, has been build at the expenses of infant, hard working factory workers, but times are changing.

Every other year the wages increase, though the Chinese worker wages are still low compared to the rest of the world. China can still compete with other countries that manufacture for the West, which doesn’t mean that the production is as high as before. The demands from the West has been decreasing and Western companies seek for cheaper countries such as Bangladesh to make more profit. China has been the world’s factory for over 20 years now and around 150 million peasants moved from the countryside to the cities, they make around $200 a month without a day off and working overtime for free. Most of their wages are send to their family in the less developed parts of the nation. Due to China’s law the hukou (the household registration system), these peasants that moved away from their birth places, are no longer entitled to have governmental services like education, healthcare and social services. This leaves migrant workers at the mercy of their bosses, what is reflected by the way these workers live with mostly 12 of them in dirty, smelling dormitories. Maybe wages have changed, but the life of an average factory worker didn’t change.

Premier Wen Jiabao is aware of this income gap between rich and poor and with the income increase every other year the government tries to stimulate the domestic consumption. There is a lot of hot money in the Chinese market, but that’s in hands of private entrepreneurs who run the factories and speculate in real estate. With billionaires in Congres and the communistic system that allowed capitalist to join in, one can imagine that the basic needs of all the Chinese people are not going to be met.

Another problem China is facing is the fast aging of their population due to their one-child policy. China’s labour market begins to tighten up with less youth on the factory floors. This demographic change is withholding the Chinese economic growth, that once was spectaculair powerful and will stop the massive pool of cheap labour. Since also China believes in an economy that must keep on growing, this growth has to be stimulated in other ways. The domestic spending needs to increase through governmental stimulation since accelerating inflation and rising property prices have undermined households’ spending power.

The Chinese government, in order to keep up with their 8.4% growth of the gross domestic product (GDP), came up with a $585 billion stimulus package. This package is spent on social development and domestic spending. A large amount, $220 billion, is spent on public infrastructure as building houses  and a railroad throughout the nation. People in the rural areas were stimulated to buy tv’s and refrigerators, while nearby the cities totally new cities rise with yet no residents. Ordos is such a city in inner Mongolia, an empty city build in 5 years time and meant for 1 million residents. The motivation to build a city like Ordos is likely GDP, one major way a government can raise their GDP is to spend more money. The more China builds the more it’s economic activities increase and the higher it’s GDP will become. Building is probably the easiest way to achieve this GDP growth in China. Local officials build empty homes block after block. Most of the houses/apartments are bought by investors and are hold as an investment which means that nobody actually lives in them.  Till now nobody ever lost money or much money on real estate in China. Therefore the homes are now a place to put cash in, instead of being a place to live. Ordos is China’s Texas and full of overnight millionaires, rich from massive coal deposits. Today Ordos has the second highest per capita income in China after Shang Hai. Not long ago the people lived here in tents, they were nomads. The old city of Ordos still exist at 30 km away from the new empty Ordos. The government decided that their GDP had to grow and decided that the old city wasn’t good enough anymore. The people of Ordos are supposed to move into the modern city of Ordos, but you can ‘t expect people to move into a city where there is no economy and houses costs 8.8 times the average annual income.  So for now new Ordos waits for that one day when people decide to come and live in it, till then it’s a ghost city while the demand for proper housing is big and only the governments GDP growth is met.

China is at the moment at a critical juncture, the nation faces an imbalance and economical instability. This is due to the gap between poor and rich and the friction between communism/socialism and Chinese tradition. The tradition of China is build on Confucianism, which sees the family and the community as highly important, where communism under Mao tried to break up with family tradition and saw people as individuals who needed to unite as a nation. This gave already a lot of instability in the sixties and seventies. Today media and a group of intellectuals in all layers of the society try to re-introduce Chinese tradition as in Confucianism. They see the current junction in a two way option:
1. China degenerates which means economical chaos and political disintegration. Within this option not only China would suffer from this also the rest of the world, since China is the engine and life buoy of world’s economy.
2. China returns to their tradition and creates stability through Confucianism, where oneness doesn’t stop at the borders of China. It will also include Taiwan, Japan, Singapore, Vietnam and Korea. China will not be seen as a military or economical power, but wants to be seen as a cultural power. The domestic budget in China is higher than the military budgets, which is a example of cultural power.

What does this Confucianism of Confucius roughly implies? To him family/friends, work and working on yourself are the 3 main pillars of his teachings. Learning to him is most important to build up your caracter and to realize yourself. The teachings of Confucius ask for self reflection 3 times a day on 3 points.

1. have we been honest today and taken our responsibility within our work and society?

2. do we live the promises we made to our family and friends?

3. are we learning from the information that reaches us every day and were we able to apply this to improve ourselves?

This is the tradition where China originates from, it’s ingrained in their DNA, therefore communism has been hard on them and has in a way disintegrated the population. While making capitalistic needs for the West in their factories they got exposed to the capitalistic virus of wanting, needing and never having enough. Which brought them in an even bigger confusion when they understood what capitalism implied. Older people complain that the youth of today who grew up relatively wealthy has no working spirit anymore.

As said before, China is in a transition stage, where they can choose for endless wrong proven systems or choose for a system that’s close to their own traditional culture. To not only leave the nation with culture, but a working system where basic needs will be provided regarding an endless GDP’s growth. China would be, as all the other  countries considered by Confucius, a great candidate for an Equal Money System. Why not change for the better when the choice needs to be made. The pillars within the EMS are: self-honesty, self-responsibility, changing yourself through information that you investigated and therefore walked, family has to be seen as all living beings and no limitations by using family ties and borders of cities and nations. EMS and Confucianism have overlaps, but will probably not be seen as the solution right away by the intellectuals. Since they see Confucianism as a belief and a belief is a tool to them to cope with life. EMS would end the devision between poor and rich just all equal and one and only applying that which is in the best interest of all. An equal China who can be the living example for all, that what they desire the most.

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Posted by on March 29, 2011 in Uncategorized


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