The Economic Development
|A Chinese teen girl|
Look! She's playing piano, she will grow up to be a musician. Next week, you'll see that she plays soccer with more enthusiasm than she did with piano. At this stage of development, the only constant is change.
China is full of paradoxes and breathtaking changes, not the least due to its modernisation, economic development. From the socio-economic standpoint she's still a teenager, not quite a mature adult.
The other source of the cause of its misunderstanding is her size. If you a teen whose size matches that of an adult. In fact, she appears larger than a typical adult, people will be easily mistaken her for a fully grown adult.
Size matters. Absolute size matters absolutely.
These 2 characteristics - economic development and size - are the main causes of why so many are confused about her. Got a totally wrong picture about her.
So who cares if we don't understand her? We all need to care because of her size.
Because of her size, there had never been a developing country who acted in so many way similar to a developed economy. This gives rise to many firsts for China.
Examples of the many historical firsts for China (not an exhaustive list),
- The 1st developing nation to be the 2nd biggest economy in the world (soon to be the largest).
- The 1st developing nation where its currency isn't internationalised while being the 2nd biggest economy in the world.
- The 1st developing nation that sends economic aid to other developing countries, especially African countries.
- The 1st developing nation to be accused of colonisation of Africa.
- The 1st developing nation to be the largest foreign creditor of the largest economy.
- The 1st developing nation to be the largest trading nation.
- The 1st developing nation that has the biggest foreign reserves in the world.
- The 1st developing nation that sent a lunar rover to the moon.
|GDP World Estimate Chart - 2050.|
Estimate for the 10 largest economies in 2050.
Courtesy of Pricewaterhouse Coopers study on January 2011
All these firsts are due to the fact that while it's still a developing or industrialising country, it has the biggest population in the world. These causes all kinds of contradictions, paradoxes, ironies, and thus confusions, of what China is about.
Also because of her size, people think she's an adult (in other words, a developed economy). Well, just because she's big doesn't make her an adult. Most kids are bigger than their parents these days.
A big economy tend to be a developed economy, but China is the first of such exception.
Just as a teen has many issues that are specific to teenager. When a teen grows up these issues usually disappear. They should.
Typical issues of a developing economy
- Copyright infringements.
- Environment degradation.
- Income disparity.
- Rampant official corruptions.
- Human rights issues.
Except for human rights issue, all countries that are in this stage of economic development - USA, Japan, South Korea, any country - all confronted the same issues. Since these countries were in this stage of economic development in the last, or last few generations, people of this generation don't aware of it.
In the early 1800s, the Brits whined that US companies copied their products; In 1843, Britain sent Robert Fortune to China to steal the secret of tea (for those who's interested, I wrote an article about this); in 1950s, US companies complained the Japanese ripped off their designs; in the 1970s, the Japanese griped that the South Korean knocked off their ideas; today China is doing the stealing of patents from other countries.
Because of the size of China, and the ignorance of the stages of economic development, when people compare China with other developed counterparts like USA, Japan, etc, they're comparing adults with teenagers. Not a fair or meaningful comparison. People can compare China with USA or Japan in at least two decades from now so we won't compare apples with oranges, or children with adults. Of course, such comparisons of China with USA today simply flatters PRC, but plain silly.
There're many developing economies in the world today, but they're never being compared with USA, Japan, or developed economies because any economy other China looks poor, and so they don't compare them.
China is poor, even if it's the 2nd largest economy in the world. Even when it's the largest economy in the world, she couldn't consider herself rich. She's quite poor. Not dirt poor, but still quite poor. This is where most of the confusion comes from.
People don't understand the different between GDP and GDP per capita.
I heard many people stated that China is the 2nd richest country in the world. They're the 2nd biggest, not the 2nd richest. Far from it.
Imagine there are 2 households. One is occupied by a Japanese called Mr. Honda. Honda is 50 years old and is a white collar worker. His weekly income is 3000 USD. The other household is occupied by 11 people, headed by Mr. Wang, and their combined weekly income is 3010 USD.
While I might say Mr. Honda is doing well, I wouldn't say the same for Mr. Wang's household. In fact, Mr. Wang household is pretty poor even if their combined income is larger than Mr. Honda.
China's population is approx 11 times larger than that of Japanese, but its GDP is only 10% larger.
Does it matter if China is viewed as a developing or developed country?
Firstly, knowing China's stage of economic development will lead to less distorted views.
Well, if you're a developed country, like a teen grows up to be an adult, you'll have to take up responsibility that you wouldn't need to otherwise.
Some people - such as U.S. Secretary of State Hilary Clinton - said China shouldn't call herself a developing country, and so she needs to take up many global responsibility of a developed country like USA or Japan.
Well, is China a developed (and not a developing) country like some say she is?
If you take a trip to first tier Chinese cities like Beijing, and Shanghai you will see more gleaming supertall skyscrapers than there're in New York, USA. Roads are choked with cars. The cars to bikes ratio is 9:1. The public transport here - especially trains - are far superior than those in any English speaking country (the low level of development of public transportation like high speed rail in English speaking countries of Australia, Canada, NZ, UK, and USA are due to their car culture). If you look at her military power and cutting edge hardware, it nearly matches those of USA, and in some cases, surpasses Russia's.
Any tourist who comes to the 1st tier Chinese cities will quickly conclude that if China is a developing country, then USA is an underdeveloped country. Nothing could be further than the truth.
Just take a trip to any 3nd tier cities (by the way only the 2 cities I mentioned above is 1st tier), which are much more numerous, the ratios of cars to bikes are reverse. I.e. there're some 90% bikes, and only 10% cars on the road.
In fact, you don't even have to go to 3rd tier cities, simply travel about 50 km from Beijing, and you'll see villages in abject poverty.
But there's what you can see as tourists. What you can't see are the more important stuff in life like health care, social welfare, and education. Only the most basic of these structures exist in China. It's a very long way to catch up with any developed country.
In short, China caught up with USA in hardware like infrastructure and military weapons. As far as the more important software of social safety net, health care and education, China lags far behind USA. Yes, U.S.'s health care isn't good, but still far ahead of China. That's how far behind China is in the important area. Health care, social welfare and education is really where a country should be measured if it's a developing country or not.
Once again, this extreme of the well developed 1st tier cities compare to the underdeveloped areas of the 2nd and 3rd cities; the extreme of the relative well developed coastal economic zones compares to the underdeveloped hinterland, you get a very distorted picture of China if you look at the one extreme only.
If you add the lack of these 3 important social systems that I just mentioned to the list of typical issues of a developing country up the top, you're looking at an unquestionably a developing country.
Hilary Clinton once said, "How do you talk tough to your banker?”. This refers to the fact that China is the biggest buyer of U.S.'s treasury bonds. The fact that China is the creditor of the world's richest country, China is therefore must be richer. Seems to make sense. Only the rich is able to lend to the poor, and not the other way round.
Wrong! A large group of thrifty blue collar workers (read China) will have enough saving to lend to a spendthrift white collar worker (read Uncle Sam). The bottom line is that U.S. per capita income or income per head ranks 9th in 2013 according to IMF. China ranks 83th. It's far below that of Greece which ranks 36th, or Chile which ranks 46th, or Costa Rica which ranks 67th. Even the African country of Botswana's average income ranks higher than China.
Yes, the reports of China's wealth are greatly exaggerated.
This is yet another irony that distorts the real picture of China's wealth. People who call China a developed country simply want her to take up global responsibility of a developed country. IMF lists China as a developing country for 2013 (status for 2014 isn't available as the year isn't over yet. But her developing country status should stay the same for at least a decade or two).
Chinese accomplishments in space exploration also adds yet another false picture that China is very modern and advanced. While USA blasted into space and landed on the moon in 1969, Uncle Sam had many social issues from racism to gender inequality, to name just two, back on earth. When they say, "Houston we have a problem". They may very well have referred to social problems on the Land of the Brave. Except, it was not a problem. But problems.
China is very much like USA in the 1960s. I don't mean China has racism and gender inequality issue (history can't be studied so easily), I'm saying that China is similar to USA in the 1960s in at least 2 important fundamental ways. That science and technology is always moved ahead first because they're easy. JFK said USA went to the moon not because it's easy, but because it's hard. Well, it's hard in the 1960s. Much more importantly, while it's hard, scientific and technological development is always easier than economic development. And social and social programs development is harder still. So China today is USA in the 1960s both in terms of space exploration and the social aspects.
Having said that, because of her size, while she's without a doubt a developing country (according to IMF and other similar organisations), but she's an exceptional one. The list of China's historical firsts above stated that clearly.
The people want her to take up the global responsibility should say that she is an exceptional developing country. She is big enough to shoulder some of the responsibility, which she has. For example, China has a largest UN peacekeeping force, and sending aid to Africa.
Call her an exceptional developing country, don't call her a developed country, that's just plain wrong on many levels.
Like the story of the Blind Men and the Elephant. When one of the 5 blind men touches the ear of an elephant, he says the elephant is soft and feels like a fan or a lotus leaf. Another touches his tusk and says an elephant is smooth and hard like marble. The other three touches different parts of the elephant and come back with different views of an elephant.
To see the whole of China, one just needs to learn all parts of it. A single view - like China is the largest foreign creditor of USA - gives a false picture that because China can lend a lot of money to USA and therefore the average individual Chinese must be very rich. This conclusion is like only looking at the elephant's tusk, and think this is what the whole of elephant looks like.
The National Self Image
One of the thing of being a teenager is how big a deal their self image is. And China is wrestling with that issue as any growing teen. Who Am I? That question couldn't be answered without looking at the past. Indeed, for teen, nothing looms larger in their psyche than their past. Well, that's also true for adult, but much more so for teen because their past, by its very nature, is very recent.
Martin Jacques hit the nail on the head when he repeatedly emphasizes the idea of China being a victim of the history in the 19th and 20th century, especially those of WW2 because it's closer in time. One might say that WW2 occurred some 7 decades ago. Wound takes time to heal, but it shouldn't take that long.
Sometimes the healing process was ignored, or skipped over. Ask any psychologist, they will tell you that if you neglect to deal with the issue right away, it will come back to bite you later.
With China's closing herself off from the rest of the world in the decades of 1950s to 1970s while Chairman Mao was on the helm, she didn't have the opportunity to work on this emotional issue, and so it's healing just being delayed. With the Opening-Up in 1978, China is in contact with the rest of the world, and is once again giving the chance to deal with the issue of victimhood.
In fact, it didn't really deal with that issue in the first decade of Opening-Up because the economic engagement was the most urgent issue. Make money before dealing with psychological issue seems like a appropriate priority. She didn't really started to seriously tackle this issue of victimhood until the 1990s. So China really only begun to deal with the scar of WW2 from the 1990s while the rest of the world had dealt with it immediately afterwards. And it took the world a few decades to get over it.
A teen who was victimised will feel very insecure, and becomes quite defensive of any criticism. being defensive or have neurosis is characteristic of any teen being bullied by others. This feeling of victimhood is particularly strong if you considered yourself the most powerful country in the world. The higher you're, the harder the fall. So the shame of victimhood that she feels is particularly intense.
Many teen angst she feels today had roots that going back to this shame of victimhood. This is evident from the territorial disputes with many neighbours, especially Japan, the absolutely uncompromising attitude that Taiwan is part of her, and the building of military might.
The Diaoyu Island is nothing but a small rock in the ocean, like a small piece of rock in her shoe, it can be very uncomfortable, and hard to ignore.
The territorial disputes bring up humiliated memories of territories (Manchuria, Taiwan, HK, Macau) being taken away by foreign powers, especially that of Japan. The arm build-up is simply a way of saying to the world, no more invasion of China by foreign forces. You can't bully me any more.
Of course, no country in the world today would be crazy enough to do so, but the shadow of the past looms large. Try to tell people who have issues in the past to see things clearly. It isn't always easy. It takes time.
A teen who remembers being bullied many time before will feel safer with a weapon in her hand even if she isn't going to use it. This military build-up also serves the double purpose of restoring the feeling of superiority that was lost during the Qing dynasty in the 19th century.
Mr. Jacques grasps her feeling of historical humiliation quite well.
What is not misunderstood is the authoritarian government of PRC, and its human rights records (not that USA is free of it). But even that is changing like everything else in China, albeit not as fast as one would like.
|China is both very young and very old|
We love to lecture teenager because of their many shortcomings, because is an easy target. Before we do that, I think it's fairer to put ourselves in their shoes first before criticising. Like the famous Eskimo saying,...
So China is both very old, and very young the same time. This also creates more paradoxes and contradictions (as if it's not enough already) for how people want to perceive China. And because China is still growing (not ageing like most developed economies), even China doesn't know where she's going herself. How do the rest of us expect to know what she becomes in the future when we don't even know who she is now?