dale wen reality behind chinas miracle

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The Reality Behind China’s Miracleand the Ongoing Debates

Dale Jiajun Wen

International Forum on GlobalizataionSeptember, 2007 Washington D.C.



The Rising China in the Media

The way to middleclass life style—The

China my universityclassmates areexperiencing.



The Hinterland China

A village school.It was founded in

late 60s. Nowthe villagershave to beg aUS foundation tocover the

renovation cost.

Thousands of rural schools with similar history.Thousands of rural schools already closed down.



Which One is More Real?

• Number of mass incidents (protests,demonstrations, or even clashes withpolice involving more than 100 people)

1993 2003 2004 2005

10,000 54,000 74,000 87,000



Growing Inequality• Ratio of urban versus rural per capita income

early 1980s 1.8:1

2003 3.23:1

• Income distribution

Top 10% Bottom 10%

Early 1980s <20% (of totalincome)

1995 33.7% 1.87%

2005 45% 1.4%



Poverty

• Cheered by World Bank and Chinesegovernment: 300 million people were liftedout of poverty since 1978. Yet, is this

monetary measure of poverty accurate?• The number of rural people living in extreme

poverty increased from 28.2 million in 2002 to29 million in 2003.

• From 2000 to 2002, 42 percent of ruralhouseholds experienced decreased income inabsolute terms.



Health CareNeoliberal reform in health care

• From 1980 to 2003, health care costsskyrocketed 15 fold.

• Government and collective contributiondeclined from 78.8% to 44.5%.

• Percentage of people covered bygovernment/collective health care

Urban Rural

1978 Almost 100% ~90%

2003 ~50% <10%



Health Care Collapse in Rural Areas

• Number of rural health care professionals:

Rural Doctors Rural Nurses

1975 1.5 million 3.28 million

2001 1 million 270,000

A 60 year old barefoot doctor. He has

served the villagers for more than 30years, while his total income from hismedical practice is 30~40$ per month. Who will serve the villageonce he retires?



Health Care (Summary)

• Average Life Expectancy

– In WHO’s 1978 Alma Ata Conference Health For All by theYear 2000 , China’s primary health care system was featured

as a model for the world. – In a 2000 World Health report, China ranked 188 out of 191

countries in terms of fairness in financial contribution tohealth and 144 out of 191 countries in overall performanceof the health care sector.

1949 1978 2005 2005

(urban)

2005

(rural)

~35 67 70 78 66



Education• Education costs have skyrocketed in the last

20 years while the share of governmentfinancing has dropped significantly. Even for

primary and secondary education, non-government sources pay 44 percent of thecost (1999 data),

• A four-year college degree costs an estimated

40,000 yuan, more than 13 times average per capita rural income.



Liquidation of Human Resource

• Between 1949 and 1980, adult illiteracydecreased from >80% to 33%.

• The number of adult illiterate populationhas increased from 87 million to 116million between 2000 and 2005.



Education as a Form of

Colonization• In the last quarter century, most educational materials

and media imply that

– The only way to a better life is to industrialize, tourbanize.

– Everything urban is progressive and desirable,while everything rural is backwards anddespicable.

– Peasants’ traditional attachment to the land is astupid sentiment, and should be replaced byupward mobility at all cost.



Ideal Preparation for Sweatshops

• Words from a female migrant worker and asurvivor of catastrophic factory fire

“ There is no possibility to be humanback in the village”.



Declining Rural Investment

• Government expenditure on agriculture, as apercentage of total national expenditure

• The share of infrastructure investment in therural sector decreased from 10.6 percent in1979 to 2.8 percent in 1992 and 1.7 percentin 1994.

1976-1980 1981-1985 1985-1990

10.5% 5.5% 3.3%

1979 1992 1994

10.6% 2.8% 1.7%



Left:The empty highway financed by World Bank.

Right: The village road built thirtyyears ago.



De-development of Rural Infrastructure

Photos by Joshua

An irrigation canal in early 1970s. The same irrigation canal in 1990s.



Funding for Rural Exodus

• More than 280 billion Yuan investmentin Beijing for 2008 Olympics.

• The annual government spending onrural health care is only 9.25 billionYuan(1998 data), less than 3.5% of the

Olympics expenditure.



Employment and Jobs• China is NOT stealing jobs from the world. On

the contrary, it is losing more manufacturing jobs than any other country due to the globalre-structuring. – From 1995 to 2002 manufacturing jobs decreased

15 percent from 98 million to 83 million.

– During the same period, manufacturing jobsdecreased by 22 million globally; thus China’s job

loss of 15 million contributed to two-thirds of theglobal shrinkage.



Labor Conditions

• Industrial accidents result in 40,000severed fingers in Pearl River Delta per

year.• Who are responsible?

Foreign-funded

enterprises

Domestic private

enterprises

State/collective

enterprises

26.0% 53.9% 5.4%

From a 2003 survey in Pearl River Delta



Declining Labor Income

• The average salary of factory workersat Pearl River delta only increased by

$8.20 nominally between 1992 and2004, and decreased by 30% in realpurchase power.



The Families Behind “Made in China”

20 million left-behind children

grow up withoutparentalpresence.



Environment

• Becoming the world waste dump

– Seven of the ten most polluted cities in China.

– Pollution claims 750,000 lives prematurely per year.

– About 60 percent of the water in China’s sevenmajor river systems is classified as beingunsuitable for human contact. mental pollution inexport zones.

– Ground water table under North China plain isdropping 5 feet per year.



The river runs black or red?



The signs say, “No pollution. We need to survive.”



Foreign Economy Growing on China’s Soil

• Tax rate for foreign MNCs: 11%

• Foreign funded enterprises account for 60%

of China’s export.• China only as the cheap resource base, labor

supplier and waste dump.

China is the kitchen, while US and Europe isthe dinning room.



Trickling Up of the Problems

• Water crisis at Harbin city in December,2005, at Wuxi City in June 2007.

• Employment rate for new collegegraduates has dropped to <50%.

• Middle class is increasingly complaining

about run-away health care andhousing price.



Growing Dissents• Actual quotes from the Internet

– Their GDP is growing, while our livelihood is declining.

– Please take away the TVs, washing machines, refrigerators or whatever consumer goods, give us back theaffordable health care, education and

housing we used to have.



Recent Changes by the

Government• Increased media coverage of the plights

of peasants and workers.

• Increased investment for rural areas,especially in health and education.

• Several environmental initiatives.

• News slogans like “harmonioussociety”, “scientific development”instead of “Development is the absoluteneed”.



Ongoing Debate and

Possibility of Alternatives?• Rural reconstruction movement

• Emerging environmental movement

• Emergence of new left, resurgence of old left

• What are the real meaning of new

government slogans like “socialistcontryside”, “harmonious society”,“scientific development”?



Some Recent Good News

• IFG’s book “Alternative to EconomicGlobalization: A Better World is Possible” is just

published in Chinese. It would not be possible two

years ago.• National halt on “oil to liquid” and “food to

biofuel” projects.

• From the official government report of the 17th Party Congress meeting: Harmony between man and nature is one important

aspect of harmonious society.

dale wen reality behind chinas miracle

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