China's Wealth Trickling Down

Well, what I heard from big lunch tables in the villages around my home town in the suburb of Ningbo, Zhejiang, is happy stories told by those farmers whose villages have in recent years been earmarked by local administrations for industrial development.Households typically get a compensation package of 200,000 yuan ($25641) per head, apartments of a size pro rata to both the original size of their own house and the number of household members, and annual dividents.

There was this one guy in his sixties grinning throughout a spring festival feast at flooding compliments on his big fortune in having had his land "eaten up" by the gov't(??????), so that now he can simply feast
on what the govt is giving in return. He has three marriage age sons, getting whom seperate wedding apartments alone would've been a wrenching headache without the well enforced land policy. Now each is living in a brand new apt, with pocketed loaded with the compensation money.

I also heard others whose village remains out of the industrial expansion praying for an early touch of its "golden finger".

What I see here is that, though without officially admitting that land is the private property of farmers, it is more or less treated that way. Though the farmers are by no means paid their due portion of the yields
from their involuntary fixed asset investment, they are more than happy with the current arrangement.

Now I'm not saying this is all a good thing. I think my hometown area is one of the most arable areas in China. And if China is not planning on 100 percent reliance on grain imports, it'd better preserve such select arable areas like Ningbo's.

The problem is, however, Ningbo also has the great traits (good governance, great infrastructure, business-minded and well-educated people, deep-water port, ehr, should better stop before being called a paid publicist for Ningbo) for industrial prosperity.
Going industrial wins out as a shorter path to wealth, with the lack of know-how about how to turn agro-product into profitting business.

There are welcome signs on this front though. Like the rising prices of agro-product(or is it just an illusion produced by living in a costly city?) and the branding strategy for agro product that a village leader I talked to on the May Day holiday so enthusiastically laid out.

hmm, guess what I want to say is that wealth can find its way into rural areas in much broader avenues,as is taking place in Ningbo, than merely trickling down, as if rural residents have to be on the passive receiving end. I shall refrain from making any success formula for a sound agro-based rural economy, since my observations are piecemeal and economics knowledge primitive. What's more, what works in Ningbo might fail in a different setting. Anyway, I don't want to hide my pride in Ningbo's economic vibe, though I'm more attached to Beijing.

I found a great link for Chris Carr:

http://www.washingtontimes.com/books/20070505-101331-9766r.htm

Nanhe,

The guy writing the book review in the link you put up clearly has an agenda to push. And he makes a lot of assumptions that don't play out on the ground in China. In general, I would not trust someone who wrote a book entitled: "Hegemon: China's Plans to Dominate Asia."

nh --

Why don't you put your comment on Chris Carr's site, rather than here?

I read the article and it is weak. I am always skeptical of those who attack ideas by going after the motiviation of those with the ideas. If the ideas are so weak, why must you attack the motives? And why do motives even matter? If I give beggar a dollar to make myself feel magnanimous, have I not done a good thing?

And though I am reluctant to criticize a source, for the same reasons, I must note that though my political tendencies probably jibe pretty well with the Washington Times, I never read it because I do not take it serioiusly. I see it as having an agenda and nearly everything it does is to advance that agenda. I don't need that. Now I know that every paper has its agenda, but I also believe that there are many that manage (at least most of the time) to focus more on the facts than on the agenda.

Unfortunate choice of title from my point of view: A lot of people in New Zealand, when we were subjected to our version of reform and opening up, said "Trickle down is the rich pissing on the poor".

Well, as for rural tourism, I have seen evidence that some rural folks are doing quite well out of it. As long ago as 1999 I saw some quite decent houses in villages outside Yangshuo (Guilin, Guangxi) and enjoyed a good meal at one such place.... for an appropriate fee, of course. And more and more villages are tapping into the tourism industry. Not sure how well they're doing, but still, it looks like a promising growth industry to my English teacher's eyes.

However, I suspect that rural tourism is only benefitting a very small minority of villages, and perhaps only certain people in those villages.

Nanhe,

Below is a quotation from the article you posted:

"Perhaps not. But analysts at the Naval War College believe it will only take 13 years, not 30, for China to become a near-peer competitor of the United States in the Asian-Pacific. China's current leaders, who will still be alive and in charge in 2020, are already engaged in feverishly preparing for future conflicts with the United States.
The recent destruction of a satellite in space is an unmistakable warning that Beijing intends to blind us in the event of a military confrontation over, say, Taiwan. China's predatory mercantilism -- and the huge trade deficit that it has given rise to -- are troubling as well. What happens to all that money disappearing into China's coffers?
Well, one thing that happens is that Chinese submarines suddenly surface next to American aircraft carriers, in a silent warning of the destruction that awaits any nation, however powerful, that gets in the way of China's drive for regional hegemony."

How can anyone take this kind of hyperbole seriously? We all want China to democratize and liberalize faster. And I am certainly not going to apologize for any of the repressive actions the Chinese government takes. But let us be realistic here. If there is one thing that those of us who have spent time in China can agree upon, it is that the Chinese will do things at their own pace. It is unrealistic to expect a liberal democracy to form from nothing in 30 year. Rome was not built in a day, and neither was the Western liberal democratic tradition. It is undeniable that China has liberalized over the past 30 years, even if the pace has been slower than what we would like. China may creep, but at least it is creeping. Mr. Mosher, the author of the article you posted, has completely unreasonable expectations for the pace of reform in China. Democratic institutions take time to form, and they cannot be imposed from the outside. The more we engage and trade with China, the more open it will become.

I find Mr. Mosher's line of thinking to be of the same ilk as that which supports the trade embargo with Cuba: they are bad Communists so we should not trade with them and reward them for their bad behavior. I think our experience with China thus far undermines that reasoning. Our corporations and university professors can only do so much in this fight. DVDs of our movies, however, available anywhere in China for 6 to 8 kuai a piece, will have more of an impact than any pressure from our goverment ever will. Our movie studios may complain about the blatant infringement of their copyrights, but their prodcuts will eventually do more to move China down the road to reform than any finger-wagging our government or business leaders could ever do.

Ben:

"But let us be realistic here. If there is one thing that those of us who have spent time in China can agree upon, it is that the Chinese will do things at their own pace."

Would those be the same Chinese who get trampled by the police for protesting polluting factories? Driven out of their villages by thugs and the police? Or those students, workers and soldiers who were trampled in Tiananmen (oh yes, several dozen soldiers and more than a few officers from the PLA were with those students when the massacre happened)?
Whose timeline decides? The timeline of the wretched old men who operate "death buses" and whole heartedly support Kim Jong Il, that's who.

"It is unrealistic to expect a liberal democracy to form from nothing in 30 year."

China has 5000 years of continuous development and just can't break the habit of abusive governments. This society is not a developing country after that long of a period, its a heroin addict staying high to avoid the pain of change/withdrawl. They know how to do it and all of the west, Japan, SK, Taiwan and India would lend a hand and Chinese academics and the CCP know it. But they just don't want to dilute their power.
How many buckets of water can one Chinese monk carry? Two Chinese monks? Three Chinese monks? Get the picture?

"The more we engage and trade with China, the more open it will become."

So how do you explain the white-hot hatred of the FLG and the Dali Lama by the CCP and the great firewall? Trade has only made China more powerful, not more free. The banner of "engagement through trade" is Amcham poppycock when trade has also been used to suppress countries.

"they are bad Communists so we should not trade with them and reward them for their bad behavior"

They are bad feudalists and racists and we should not reward them with high technology and self-damaging trade agreements for their behavior.

"I think our experience with China thus far undermines that reasoning."

Like the helicopter troop ships that china is building to use on taiwan? the 900 missiles pointing at Taiwan? Fresh claims in Indian territory? 25% to 40% tariffs on foreign branded goods (even if they are wholly or mostly made in China) while no such tariffs exist on chinese products (even the ones tainted with poison)?

"China down the road to reform than any finger-wagging our government or business leaders could ever do."

Our business leaders wag their finger? Only at those not in support of CEOs ripping off investors.

chriswaugh_bj --

Title was intentional. If you think the term is loaded in NZ, believe me, it is loaded in the US as well, at least for those of us old enough to remember it.

jmnlman --

Sure . . . . but so what? Is this a reason not to encourage it? Isn't this true of all forms of economic development? Isn't domestic tourism relatively recession proof?

Rob --

Thanks for checking in. Yes, I think "trickle down" somewhat implies the natural order of things in economics, but it has also come to imply a bit of pissing on the poor as well.

Dan,

I admit I know little about Cuba but that given our experiences with other countries, I think that "trade" is better than "no trade."

Nanhe,

I have generally appreciated your contrarian viewpoint, but with regard to your comments to this post, I still think you are guilty of the hyperbole that plagues the article to which you linked originally. You seem to expect Utopia, whether from China or America. Do you not realize that we in America are far from perfect. That we have little leverage in international politics these days? And even if we did have leverage, that China could care less? I wish we could all get along, but I inject a dose of realism into my everyday life.

Ben --

The US still has tremendous influence, but it is far from unlimited, particularly with respect to China.