Tuesday, October 5, 2010

The Chinese Have A few Problems Too

We hear a lot about how the Chinese are becoming so powerful. There seems to be something in the news almost everyday as an example of them displaying their new found economic or military muscle. In studying the Chinese, however, it is important to remember that they are far from perfect and they have some significantly serious problems of their own.

The Economist magazine recently reported that Chinese "workers are becoming harder to find and to keep," they go on "Strikes have been unusual in their frequency ... their longevity and their targets ... " The Economist argued this is ultimately good news for planet Earth.

This labor problem will lead to higher Chinese wages. "What the world lacks," Economist editors concluded, "is willing customers, not willing workers. Higher Chinese wages will have a similar effect to the stronger exchange rate that America has been calling for, shrinking China's trade surplus and boosting its spending. "

This could be very good news, especially for us Americans.

Another of China's modern problems is an unanticipated problem with Demographic issues. China's population is aging. Reuters reported (citing official figures) that "the proportion of people aged 60 and above in China rose at the fastest clip in history" in 2009. "They now represent more than 12 percent of the population."

Reuters quoted Wu Yushao, deputy head of the China National Committee on Aging, as saying that the increase in aged people "will be a huge challenge. ... The economy, the retirement system and services for the elderly are still too weak to handle the challenge."

So does China become a kind of ultimate Greece, with too many promises and not enough cash? Chinese government policy, specifically China's notorious "one-child policy," which was supposed to promote zero population growth is a major problem.

China also enjoys the full range of problems facing every other country in modern times and several other domestic problems plague China.

China's primary threat is not the United States, or any other foreign power, but internal disorder. There are more angry people in China every day, and the government knows that this could blossom into widespread uprisings. It has happened many times before in Chinese history. Protesting factory workers are often an early indicator.

Corruption is the biggest complaint among China's discontented. Government officials, who are more interested in enriching themselves than in taking care of "the people" are particular targets. Many of the demonstrations and labor disruptions are the result of corruption among local officials, including the police.

In 2007, Chinese Internet use grew to over 210 million users. Cell phones are also increasingly available. China is the world's largest cell phone market. The Internet is an economic and educational tool. However, it also undermines an authoritarian government's ability to control (deny and spin) information. A perfect example of this problem was China's 2010 "war with Google.com.”


China has a population of 1.4 billion. Han Chinese ("ethnic Han") constitute approximately 92 percent of China's population. China also has 55 "minority nationalities," however, amounting to 100 million people. The 2009 Uighur riots in Xinjiang province (western China) and resistance in Tibet are symptomatic of the problem. They are resisting the spread and engulfment of the “Han culture.”

In early 2008, China began shutting down their "high pollution" factories. They needed to clear the air for the 2008 Beijing Olympics. The growing abundance of material things by the Chinese people is causing enormous pollution problems and water shortages. Effective pollution controls mean more expensive production methods. That also results in making Chinese produce less competitive.

China's "one child" policy was successful in crimping population growth. More boys were born than girls. Chinese culture "favors" sons. As a result, there is a serious imbalance between men and women. In some places, there are 120 men per 100 women. Marriageable daughters are going largely to the upper social groups within each village or district. The sons of the poorest families are often not finding wives. This is an obvious future social problem.

All these domestic ills suggest China may be on the verge of another revolution, this one caused by its failed communist regime's inability to satisfy (and shape) China's growing economic, social and political needs.

The last time the Communist Party Leadership faced a serious internal challenge it resulted in a very bloody crackdown by the hardliners in the party. It will be interesting to see if they still have enough raw power and internal control.

No comments: