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China: The Glitter and the Poison In recent years, votaries of China's "market socialism" have marvelled at the speed of China's growth. The stunning skylines of China's redeveloped coastal cities and interior state capitals have left vistors in awe; and even those who have not had a chance to actually visit China are favorably intrigued by pictures of China's ultra-modern central business districts. With their broad avenues and towers of glass and steel soaring into the sky and impeccably paved sidewalks aesthetically enhanced with potted plants and greenery, China's cities display an elan that trumps New York or London. One might be tempted to think that China had finally arived on the international scene as a marvel of modern urban planning - a veritable model for other developing nations to emulate. Without the obstacles and hindrances posed by private property rights, city governments have been able to redevelop entire urban zones with an alacrity and panache that appears quite stunning in comparison to the hotch-potch unplanned growth that one sees in most Indian cities. Clearly, state ownership of land has allowed China to accomplish a level of infrastructural development that is quite impressive. Yet beneath the stylish and handsome urban facades is another reality that is not only just uncomfortable but perilously damaging. In April of this year, an AFP report mentioned that China officially acknowledged 6000 deaths of miners in 2004. Mining deaths in the first quarter of 2005 were up 20% over the previous year. Unofficial estimates however point to figures as high as 20,000. Although China produces about 30-35% of the world's coal, it is responsible for over 80% of mining deaths. 600,000 miners are reported to suffer from the debilitating black lung condition - a figure that is expected to grow by 70,000 annually. In 2003, China had officially reported over 17,000 deaths due to industrial accidents, though again, independent observers feel that is a significant under-estimate. But this is not the only price paid by China's hapless workers. Not only are average working shifts for China's migrant construction workers much longer than the world average, workers are often simply not paid. According to estimates by the official Beijing Review in 2004, almost three quarters of the nation's migrant workers were owed wages amounting to over $12 Billion. China's gleaming skyscrapers also impose many other sacrifices on the part of China's urban residents. Unlike in the rest of the world, there are few noise limits on China's construction companies. Whereas the Indian Supreme Court has put limits on construction activities so that residents are to be spared the assault of construction noise after sunset, it is routine for China's constuction companies to continue work well into the wee hours of the night. On week-nights, it is rare for construction to cease before midnight, and on weekends, it is not unusual for it to continue past 2 AM. Unending traffic jams and high levels of dust pollution are also par for the course. In 2003-4, a World Bank study found that 16 of the 20 most polluted cities in the world were in China. Environmental activists in Hongkong are especially furious at the way the Chinese government has rigged its pollution-reporting algorithms so as to routinely downplay the incidence of daily pollutants. For instance, the Chinese environmental agency reports pollution levels for 84 major cities at this link: SEPA - Ambient Air Quality Reports for 84 Cities. On most days,it would appear that Chinese cities are not especially polluted, and pollution is well within stipulated norms. But a look at the formulae used to calculate pollution levels reveals an amazing sleight of hand. Through sheer statistical jugglery, the Chinese government succeeds in routinely under-reporting pollution by a factor of two or three. In extreme cases, SO2 and NO2 pollution could be actually 4 or 5 times higher than that reported by the government. Stories in the Hongkong press have often cited residents complaining of getting discolored water in their taps - of it being muddy and brown, and entirely unfit to drink. The government, on the other hand, has claimed continued progress in the fight against air and water pollution. But going by the manner in which the Chinese government reports its air pollution data, such claims by the Chinese government merit a cautionary measure of skepticism. Given the high rate of industrial accidents and toxic spills every year, it is not at all surprising that Chinese citizens complain as often about water that has a bad odour or an unusual color. Given the Chinese government's history of cover-ups, it is no accident that it took the government ten whole days to share the truth about the highly toxic benzene spill that polluted the Songhua river near the northern city of Harbin. Russian authorities were justifiably troubled by the late notice they were given of the looming disaster. While governments throughout the world are guilty of prevarication and double-speak, the absence of an independent press, and the utter lack of democracy makes the situation in China considerably worse. Had the Chinese government been more forthcoming with its people, it is likely that residents would have had more time to store up on drinking water - preventing the sort of last-minute price-gouging that water-vendors were able to engage in. Poor residents were especially hard hit, because they owned few storage containers, and without adequate warning could do little to ameliorate their situation. And unsuprisingly, it wasn't just Harbin that was facing the consequences of a poisoned river - the city of Chongqing was also presented with a toxic leak in its river at about the same time. There are thus, two very distinct sides to China's current political and economic trajectory. On the one hand, China has invested a lot more in fixed assets - and this has had a visible impact on the urban environment. It has also taken much greater initiative in developing its computer and electronics hardware industry. Going by Chinese government claims, it has also been growing faster than India. On the other hand, there is insufficient pressure to improve industrial or environmental safety or public health. China, for instance, holds the dubious distinction of having the world's highest concentration of tobacco users. But even in terms of growth, it might be worth taking a closer look at Chinese government claims. For instance, two studies earlier this year revealed an odd discrepancy - trade figures reported by China's major trading partners (such as Japan, the US and the EU) were at odds with Chinese government claims, suggesting that trade growth had been exaggerated by 20%. While Chinese dissidents have reported numerous cases of wildly exaggerated growth claims in the interior, even more cautious and supportive economists have found Chinese claims of rural growth somewhat untenable. For instance, until about two years ago, there was virtually no wage inflation in China's EPZs (Export Processing Zones). In spite of 20 years of unabated high growth, shop-floor wages remained flat. Had China's rural economy been growing at over 4% as has been claimed, it is simply unfathomable that China's rural poor would have accepted low-paid sweat-shop type jobs in the coastal EPZs year after year for over two decades wihout demanding higher wages. Nor would they have as easily accepted life threatening mining jobs that paid just a bit more. In India, even 7% growth leads to considerable wage pressures. It is inconceivable that a sustained 8%+ growth rate in China could have occurred without heightened wage pressures much sooner. The only logical surmise is that there was little real growth in the countryside, and consequently, village migrants accepted any job at almost any price. This would then suggest that the economists who have argued that in past years China's real growth rate may have been 1-2% less than official claims (due to much lower rural growth) are perhaps on the mark. Other anecdotal evidence also bears out the contention that rural growth in China is not what has been claimed. Journalists who have embarked on trips into China's rural heartland have been shocked to find how quickly conditions in the countryside deteriorate. A recent reporter was amazed to find how even in supposedly prosperous Guangdong province, just 50 miles away from the boomtowns, few rural homes had paved floors. Another odd aspect about China's growth is that in contrast to India (which is purportedly growing at a slower pace) there are only about 250 cities that have educational institutions that can offer a graduate degree in science or engineering (as gleaned from China's official higher education website). India with its 25% smaller population has a 1000 cities (or small towns) with at least one college that can offer an undergraduate science or engineering program (as is evident from the data drawn from India's GISTNIC search engine and the UGC). Whereas China graduated about 350,000 engineers and computer specialists with at least 4yr degrees, India graduated almost 400,000 in 2004. (Western reports claiming 600,000 engineering graduates in China are incorrect because this figure includes those graduating with 2-3 year technical diplomas) Although the Chinese government has expended considerable more effort in upgrading the research facilities at its leading universities, the spatial spread of higher education is significantly narrower. This further reinforces the notion that Chinese growth is much more skewed, and overwhelmingly concentrated in urban areas and the more prosperous coastal regions. Even in terms of transport infrastructure there are anomalies. For instance, although China has built many more expressways linking its major cities, overall road length (per capita) is actually less than India's. Per capita passenger railway length is also somewhat lower in China although capacity for freight transportation is almost double India's. While China's railways carry four times as much freight, they carry only a fifth as many passengers. And although China has been claiming very high growth rates in power generation (as high as 18% in some years), anecdotal evidence of 4-8 hour daily power cuts in the residential parts of smaller towns abound. Even some university towns aren't spared power rationing during the high-use winter and summer months. Although export-oriented industries have far fewer complaints about inadequate power, Chinese residents and students posting on internet websites point to a somewhat different reality for many Chinese residents. Even in terms of poverty reduction, the Chinese government has had to resort to changing the rules of the game. For instance, the UN has set the dollar a day standard for estimating poverty in the developing world. But the Chinese government has set its poverty line at 60c a day. With the general withdrawal of state subsidies, there is no longer any justification for such a low setting. Given how cold China's winters can be, even a dollar a day standard might not be adequate to correctly assess poverty since calorie requirements and clothing requirements in China's temperate zone would have to be much higher. It is therefore quite unlikely that China's official poverty rate of 5% is an accurate indicator of the level of deprivation in China. Similarly, although the Chinese government claims that less than 5% of its urban residents live in slums, it is estimated that at least 20% of the residents in cities such as Shanghai and Beijing live in homes without indoor taps, toilets or cooking facilities. Residents perform their morning chores sitting on buckets in back allies that must then be taken at local collection centres for dumping the waste. Although China's "industrial housing units" are supposed to come with a shared toilet facility, the reality is that many do not. In snow-bound cities, housing units without any indoor plumbing are nothing but glorified slums, and ought to be classified as such. Although China claims that such problems will be sorted out before the Beijing Olympics in 2008, other cities will probably have to live with such inadequacies for some time to come. This is not to suggest that the situation is any better in India or Indonesia or other African countries. The point is more that beneath the gleam of China's iridescent skyscrapers, there is also considerable inequity, albeit often masked by government subterfuge amd external collusion. It is true that state ownership of land (with considerable restrictions on private property) and a command economy has allowed China to redevelop its cities with amazing speed and brilliant effect. By controlling its population growth, China has also been able to liberate a level of demand-growth that would not have been possible otherwise. But the lack of participatory democracy has also led to a very rapacious brand of crony capitalism that has left the poorest of workers virtually voiceless, and has ravaged China's environment in a manner that is quite unparalled. China's political leaders have given heed neither to fairness and justice, nor to energy conservation, nor to environmental sustainability or public health. There also appears to be an unusual degree of mismatch between production and consumption. As China's cities have attempted to modernize as fast as possible, there is a glut in luxury office space and condominiums for the rich, but a shortage of affordable housing. Even in booming Shanghai actual occupancy rates can be as low as 20-30% in some of the fanciest of the new buildings. In addition, it should be noted that 70% of the impetus of China's growth is emanating from external demand, and 75% of China's exports are controlled by companies where a majority stake is in the hands of foreigners. Owing to its unique geographic location (such as its proximity to developed nations such as Korea and Japan, and its more convenient location vis-a-vis the West coast of the US), it has emerged as a more favorable destination for outsourced manufacturing when compared to India or even Indonesia. It has also greatly benefited from the capital accumulated by the Chinese business diapora that is now finding its way back into China. Moreover, unlike India, until a few years ago, China was self-sufficient in terms of energy resources. China is also blessed with many more all-season lakes and rivers, and unlike much of India (which enjoys only one major rainy season), much of China enjoys two wet seasons a year, making it much easier for Chinese farmers to raise two cereal crops and a vegetable crop every year. These are some natural advantages that cannot be replicated in India or most African countries. It is certainly questionable if China would have enjoyed the same growth rates without these natural advantages. Had it needed to purchase 70% of its oil in the world market (like India), or if it had to expend as much on subsidizing agricultural irrigation (and other inputs) as India - it is an open question if China's urban areas would have enjoyed such dazzling growth. In any case, those enamoured by the communist ideals of enlightened development and social equity should no longer harbor any illusions that China's growth trajectory has anything whatsoever to do with a "socialist" path of development. In fact, a careful perusal of the history of China's Communist Party under Mao reveals a much more unsavory record than has been commonly acknowledged by Mao's many adoring fans in India. For instance author Michel Franz (although fascinated by Mao) elucidates (through numerous credible references) how even before the revolution, Mao repressed or betrayed proletarian factions within the Chinese Communist Party so that he and his peasant allies could control the Party. Although there is a litany of Mao's public speeches extolling the virtues of the new "Socialist Era", his actual writings on economics, and his personal commentaries on Soviet economic practices reveals him to be more of a vulgar Chinese ultra-nationalist who was yet to be convinced of the virtues of a planned socialist economy. What Mao wanted was for the representatives of the peasantry in the Chinese Army and Party to exercise hegemony over all other social-segments - particularly the scientific intelligentsia who he particularly grew to resent (consequent to their criticism of his handling of the Chinese economy in the late 1950s). The Kissinger transcripts that have now been released reveal Mao to be not only insensitive on the issue of gender, but also someone who was politically reckless and insincere. There is an ill-concealed contempt for India and a seething hatred for the former Soviet Union that is repeatedly expressed in his conversations with Kissinger. Even though it was the Soviet Army and not Mao's army that had defeated the Japanese in Manchuria, not only was Mao an utter ingrate towards the Soviet Union, he had this extraordinary notion that he ought to be considered the leader of the world's "anti-imperialist" movement. But like everything else, Mao's "anti-imperialism" was nothing but a grand posture, intended more as a bargaining ploy to gain respect from the US, and to gain diplomatic points against India in Asia and Africa. Ultimately, of course, the facts speak for themselves: Notwithstanding his anti-imperialistic pretensions, Mao befriended Pakistan (which was then in complete collusion with Anglo-American imperialism) and launched an unnecessary war against non-aligned India supposedly to teach Nehru "a lesson" for his "arrogance". Nehru's crime? He had been asking the Chinese to change their maps in which vast amounts of territory under Indian control had been claimed as Chinese. These were territories over which China could have had little legitimate claim - something Mao admitted as much to Kissinger - but when Nehru lost patience with disingenuous Chinese negotiators, Mao decided to "teach the Indians a lesson", conveniently forgetting how the Nehru government had, in fact, been one of its greatest champions in the UN. Even China's claim on Tibet was somewhat stretched since for much of Tibet's history, it had been an independant state; only in more recent history, had it been conquered by the Manchu invaders and reduced to a tribute-paying colony of the Chinese imperial government - hardly the basis for an indisputable sovereign claim. Under Mao's tutelage, the Chinese government supported the fanatic Pol Pot regime in Cambodia which led to an extraordinary genocide of the intelligentsia. Also during Mao's watch, the Chinese government betrayed the leftists in Chile who had sought shelter from Chilean dictator Pinochet's death squads. At the same time, the Chinese government sided with stooges of the CIA and the apartheid regime in South Africa against the liberation movements in Southern Africa. Although the Chinese Communist Party eventually moved away from Mao's messianic peasant orientation, its foreign policy under Deng remained wedded to the US. Its cynical supply of arms to the Islamic fundamentalists in Afghanistan was perhaps most instrumental in bringing down the Soviet Union. But more significant for India is how its support for Islamic mercenaries led to an all-round weakening of secular forces in both the Indian subcontinent and the Middle-East. Yet, in spite of all this (and perhaps much more), the mystique of Mao survives in the hearts and minds of many Indians. While India's naxalites continue to swear by Mao, India's CPM leaders and CPM-oriented intellectuals (as well as many neo-liberals) are swayed by China's booming metros, and little moved by the unrelenting casualties in China's mines and factories. The toxic spills, the poisons in the air and water - all this is too easily forgotten. This is not to say that India and China should not cooperate whenever possible, ties should be improved to the extent possible. However, one ought not entertain starry-eyed illusions about the contours of Chinese growth. China's wrenching dualities must be acknowledged by those seeking to improve the plight of India's poor and working masses. A recent photograph from Beijing captured a truly poignant Chinese contradiction - a towering skyscraper, an immaculate sidewalk - and an utterly pathetic child - hardly five years old with sullen and hurt looks in his eyes, seated edgily on the bare pavement - playing a single-stringed instrument - hoping for alms, as businessmen in their suits walked hurriedly by... At the altar of the translucent skyscraper - it seemed only inevitable that that pathetic forlorn child would feel utterly out of place at the feet of the newly rich as they marched by - briskly and purposefully towards their next business venture. China has arrived, but is it the glitter or the poison that should engage us? Should our eyes lock into the magnificent splendor of China's urban landscape, or should they droop in sympathy with the realization of some child's hapless deprivation? Should we marvel at China's spectacular growth or be cautious in mimicking its reckless plunder of scarce resources? Should we admire the zeal of China's capitalists or be wary how they may poison the pristine beauty of nature's bounty? China has arrived, but is it the glitter or the poison that should engage us? Notes: The Magic of Chinese Statistics A look at Chinese press reports on China's vehicle sales seem to reinforce the notion that there is little consistency in the way economic data is reported in China. A June 16, 2004 China Daily report (available online on China.org.cn - Business) asserts: "CAAM predicted at the beginning of this year that the full-year vehicle output will reach 5.5 to 5.62 million units, up from 4.44 million units last year." In other words, CAAM (China Association of Automobile Manufacturers) had placed China's 2003 vehicle output at 4.44 million units. The same report broke down May 2004 vehicle sales as follows: Passenger Cars: 177,000, Trucks: 115,000 and Buses: 103,500. But a Dec 7, 2005 Xinhua News Agency report claimed that in the first nine months of the year, car production amounted to 735,700 up 42.3 percent over a year earlier. This would place the nine month car production for 2004 at around 500,000, or 12 month car production at about 667,000 - only one third of the annual production suggested by the June 16, 2004 sales for May. In fact, CAAM had placed combine April and May 2004 sales at 397,600, and implied that March sales were about 226,000. For car sales to have grown 42.3 percent in 2005, only 43,400 cars could have been sold in 2004 in all the other months - hardly plausible if average sales figures (using the March-May numbers) were running at over 200,000 a month. Less than a week later, on 13 Dec 2005, the Xinhua News Agency released a report headlined "Auto Market Getting over Downturn" which quoted CAAM as claiming that Novembor 2005 car sales were at 285,700 a 23% increase over October 2005, and that 11 month total vehicle sales were at 3.5 million units - a 20% increase over the same period in 2004 - suggesting that total sales for 2004 would have been around 3.2 million units, i.e. - only 72% of 2003 sales. In other words, sales for 2004 dropped 28% over 2003, and unless vehicle sales more than doubled in December (over November) of 2005, total vehicle sales for 2005 would be only 88% of 2003 sales. For the sales growth figures to be correct for 2005, either the figures reported in 2003 were grossly exaggerated, or else, there was a steep 28% sales decline in 2004; but even with a recovery in 2005, vehicle sales for 2005 appear to be 12% lower than 2003. Such a drop is quite remarkable since the Chinese government has been reporting economic growth of over 9% for virtually every quarter in 2004 and 2005. However, the oddities concerning China's vehicle sales don't quite end here. Even as the CAAM was reporting a 20% rise in sales over 2004, the statistics bureau of the Chinese Government was reporting a 28% increase in vehicle sales. Unless the average price of every car sold increased by 40% - a 20% increase in sales volume could not possibly yield a 28% growth in sales revenue. Considering that the government has been tightening up on loans, and encouraging sales of smaller vehicles, it is quite unlikely that there could have been such a wholesale shift towards substantially more expensive vehicles in a single year. Clearly, both the Chinese Press and Chinese Statistics Agencies are throwing around growth figures that are difficult to reconcile with the facts on the ground. Related
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