Ya Want China Reality? Pomfret Gives China Reality.

I have always found John Pomfret to be consistently clear, reasonable and accurate. He has been impressed but not dazzled by China, since it is clear that he has a handle on China, not just Beijing. More people need to pay attention to him and less to the glassy-eyed paranoids who see the U.S. being overwhelmed by the new Chinese "foreign devils" or the starry-eyed who have all but ceded the 21st C. (or at least the first half of it) to the Sino "juggernaut."

I thought that article be of-a-piece with a concerted effort lately in the western press to put down china. how many more bubble stories will we have to read? and now, how many of this how-silly-you-are to think china great will we see?

who is the more hamstrung with ideology, USA or china? who is adjusting better to a global and interconnected world, china or USA? which country is more friendly to fly into? on and on ...

me thinks you express the feelings of a "homer", to use a baseball term about umpires ...

I had coincidentally written a letter to family today in response to an email about China. Its rather filled with generalizations and blanket statements - so blast me for them if you want. I am just thinking general concepts.

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America is afraid of China because of the newspaper headline numbers of 8% GDP growth year after year. This should be expected though, there is nothing magical about their growth. This growth is a one-time occurrence that stems from sending 300 million+ farmers from rural China into cities. It comes from building apartments, offices, roads, highways, and water & electrical grids - and obviously from low-cost manufacturing being located in China after 1979. Earlier we were afraid of the Russians and the Japanese - the Russians were a formidable military opponent and the Japanese were developing world-class electronics companies and innovating in manufacturing methods (Toyota). What China has not done yet is come up with a sustainable method by which it can continue this growth. Where are the world-class Chinese companies? I can only think of Haier and Huawei (but they are still mostly contained in China). Where is the innovation that will drive companies of the future?

China seems to fit with what Krugman said about the countries of the Asian financial crisis http://web.mit.edu/krugman/www/myth.html

China for a long time has been a race to the bottom. Lowest cost and lowest quality for slim profit margins. There is little in the Chinese culture about innovation and creative thinking. The wealthy entrepreneurs of today are primarily the ones who were sent to the US by Deng Xiaoping during the 70's and 80's to study from the United States. While there they saw everything we had and that their home country did not have - it took no brain power to think "the US has large high-rise apartment buildings and China doesn't, so maybe I should just do that exact same thing when I return to China." This is what modern China has grown upon, I'd like to see how long they can keep this up.

With regards to MNC's in China, the attitude that the government is taking towards them is becoming increasingly hostile. China is feeling a lot better about itself as it survived the global recession whereas the developed powers are stuck in economic quagmires. There is a sense that the government now thinks that it is not their privilege to host MNC's but rather that its the MNC's privilege to have access to the Chinese market.

China is an economy that's been built upon cheap manufacturing from a cheap labor force and an undervalued currency. Its growth has been built upon sending hundreds of millions of farmers into the cities. What is there next to sustain growth? What economy is there to support 1.4 billion people? Historically over the past 500 years the Chinese population has grown at an average rate of 0.37% per year. In the 1950's Mao declared that a large population makes for a strong nation and promoted that all farmers have at least 5 children. The result? In the 50's China's population grew at 1.6% per year, in the 60's it grew at 2.38%, in the 70's at 2.4%, in the 80's at 1.3% and in the 90's at 1.5%. This pretty much matches our Baby Boomer time period which now gives Congress so many headaches. The difference is that our Baby Boomer kids went to school and became educated and found value-adding employment. In China these people suffered under the Cultural Revolution in which schools were shut down for 10 years and thus most never received any education past elementary school. They are the definition of broke and will require full support after retirement at ~55 (female) ~60 (male).

The reason the communist party has not been thrown out yet has been because every day the Chinese citizens can see their cities and lives improving. There is lots that they dislike about their government, but they rest their dislike aside in order to let things slide and get more money. Whenever that growth stops though there will be nothing left to cover-up the problems within the government - that is when I would become worried about living in China.

My thoughts on China: unsustainable, culture focused on cheaper - but not through innovation but rather through cutting quality and parts. Too many people, too few jobs.

@lucane0:

You wrote an amazing letter home. Not to be nosy about your personal situation, but how long have you been in China? Who have you been dealing with on a daily basis? Where did you get your information from?

Your letter covered a lot of topics about China. A lot of them are just opinions. It would be very difficult to discuss all these in a few pages. I'm picking one particular paragraph in your letter since it deals with basically facts:

"China is an economy that's been built upon cheap manufacturing from a cheap labor force and an undervalued currency. Its growth has been built upon sending hundreds of millions of farmers into the cities. What is there next to sustain growth? What economy is there to support 1.4 billion people? Historically over the past 500 years the Chinese population has grown at an average rate of 0.37% per year. In the 1950's Mao declared that a large population makes for a strong nation and promoted that all farmers have at least 5 children. The result? In the 50's China's population grew at 1.6% per year, in the 60's it grew at 2.38%, in the 70's at 2.4%, in the 80's at 1.3% and in the 90's at 1.5%. This pretty much matches our Baby Boomer time period which now gives Congress so many headaches. The difference is that our Baby Boomer kids went to school and became educated and found value-adding employment. In China these people suffered under the Cultural Revolution in which schools were shut down for 10 years and thus most never received any education past elementary school. They are the definition of broke and will require full support after retirement at ~55 (female) ~60 (male)."

A couple of facts about population in China:

1. In 1949, the average life expectancy of Chinese is under 40 years old. In Mao's era, it was above 60 years old (today it is above 70). This alone contributed a big part of the population growth.

2. China's family planning policy and one-child policy were introduced in late '70s. The baby boom was from '50 - '70s. That's why we saw the so-called demographic dividends in the last two decades due to the baby boomers entering their child-bearing age. In the last few years, the first generation of the one-child generations enter the same stage and we're seeing gradual decreases in child birth and slow-down in population growth.

3. To be sure, Mao was against the population control policy advocated by some scientists, such as Mr. Ma Yinchu, the former president of Beijing University, but he had not endorsed or promoted any policy that called for the at-least-five-children policy. In fact, I have never heard such a policy.

4. During the Cultural Revolution, it was colleges and universities that had stopped to recruit new students for several years. The primary schools and middle schools were much less affected. In fact, one of the major achievements of Mao's era, despite of the disasters such as Great Leap Forward and Cultural Revolution, was the significant improvements in elementary and middle-level education. China's literacy rate was improved from under 20% to over 80% during Mao's era. In fact, it laid the foundation for the last 30 years' industrial boom with a large pool of labor force with good basic education.

The rest of your letter is full of speculations and opinions. While there are some valid points, most of them are either overblown or misinformed. I'm not going to refute one-by-one.

My gentle advice to your is take good advantage of your time in China with an open mind and try not to judge everything with a preconceived notions. China is a large country with a long history and changing rapidly. It's complex, to say the least.

lucane01:
To answer your following questions:

Which country is more friendly to fly into? I do not know about you, but I think having to find the housing registration office and going down there within 24 hours of arrival is a pretty big pain in the ass. What exactly is bad about flying into the US? A departing flight is a little annoying now with the security, but whats wrong with arrivals?

You don't have to do house registration when your arrive at USA is probably because you are American Citizen. Non-US citizen need to provide similar registration information to US government too, and it is also pain in the Ass. You probably do not know, foreigner in US are required to report their new address to homeland security within 30 days they move. Even you just move from Apart A to B.

Just finished "Wild Swans: Three Daughters of China" by Jung Chang. It is banned in the PRC. It shouldn't be!!!! My G-d!!! Everyone who thinks that Communist China is so politically great/stable and/or that Maoism was so positive really ought to read this! It's about 500+ university-level pages, but it is from a daughter of the former aristocracy, so it's WELL WORTH IT!!!