Bulatlat - The Philippines's alternative weekly newsmagazine

This story was taken from Bulatlat, the Philippines's alternative weekly newsmagazine (www.bulatlat.com, www.bulatlat.net, www.bulatlat.org).
Vol. VI, No. 14, May 14-20, 2006

China Today: Miserable but Not Hopeless

China has replaced the U.S. as the country that has the most foreign direct investments (FDI). Sixty percent of China’s ten-percent Gross Domestic Product (GDP) growth rate came from increase in exports. How do these developments affect the lives of the ordinary Chinese people? Has capitalism worked for China?

BY EMILY VITAL
Bulatlat

How do these developments affect the lives of the ordinary Chinese people? Has capitalism worked for China?

These and more were discussed by Pao Yu Ching, a Chinese scholar and a retired professor from Marygrove College in Michigan, in a forum at the University of the Philippines (UP) during her visit here last week.

China’s road to capitalism has resulted in what Pao describes as many imbalances. She said that the Chinese economy is terribly out of balance. “China’s big trade surplus is being loaned to the U.S. to buy goods from China,” she pointed out.

Pao also revealed that China exports eight percent of its GDP as capital. “Total production is not used for domestic investment and consumption,” she said.

China also suffers from internal imbalances, she also disclosed. “China’s 45-percent investment rate goes to infrastructures.” This means that huge investments were used for construction of highways, railroads, subways, airports, buildings and hotels.

The irony, however, Pao said, is that these are inaccessible to the majority of the Chinese people. She said that there are airports that are empty. Another example that she cited is the fastest train near Shanghai: “Nobody is riding it. It costs the same as the taxi.”

Why the numerous infrastructures? Pao revealed that local government officials are promoted to the central government if they build more infrastructures.

The scholar also said that 70 percent of China’s industry has overcapacity, meaning that only a part of the industry is being used and other parts are idle. “This is not being corrected,” Pao said. “Soon, profits will drop and businesses will close down.”

Impact on the people

Pao pointed out another great imbalance. “Eighty percent of Chinese consumed only 25 percent of what China produced,” she said. “This is because of unemployment and low wages.”

Pao said that a high official from the research unit of the State Council admitted that the GDP growth does not translate to an increase in employment.

In the past, she said, there is a 0.4-percent growth in employment for every one-percent GDP growth. Today, the rate is one-percent GDP growth rate to 0.1-percent employment.

She also said that state enterprises lay off tens of thousands of workers. In 1992, around 84 percent of the workforce belonged to the state enterprises. By 1999, only 47 percent remain in state enterprises.

In Hunan, for example, 70 percent of workers have lost their jobs, she said. Most of the workers belong to the informal sector, which pays very little, usually $50 a month and have no benefits.

Meanwhile, 100 million of the workers in the cities came from the countryside, she said. “They work with the hardest jobs and have terrible living conditions.”

There is a high injury rate among workers, Pao said. In fact, she said, there are factories where workers’ arms are cut off. She said Chinese doctors have become experts in reconnecting limbs because they have done so many.

She said that workers do not have medical insurance. “Hospitals will not treat you if you don’t have money… The cost of a surgery, for example, is equivalent to five years of pay.”

Pao also said there is a resurgence of diseases, which were eradicated during the 1950s. Tuberculosis, malaria, snail fever came back.

Ching said that China’s agriculture has not been modernized. “By dissolving the communes, peasants need to work harder to produce more.” Ching said that distributing little parts of land to peasants has reduced productivity.

Peasants, she said, have little income to buy machineries to modernize farming.

Adherence to monopoly-capitalist ideology

The retired professor attributes these problems to adherence to monopoly-capitalist ideology. “China is doing what the mono-capitalists want it to do,” Pao said. She defines the monopoly-capitalist ideology as a myth about economic development: open up everything and export oneself into prosperity.

China, she said, is trapped in low-cost production. “China is exporting so much… It has cheap goods, cheap labor,” she pointed out.

Pao revealed that foreign corporations control 60 to 70 percent of exports.

She also said that China today is owned both by bureaucrats and capitalists. She disclosed that 50 percent of state enterprises are in fact privately owned. “The sole purpose of state enterprises today is to make profit,” she said.

Pao also said that in the past, state enterprises produced according to economic trade and the wage fund came directly from the government.

“Bureaucrats rob the public money to put into their pockets,” she added.

Hope

Despite all these, the situation in China is not at all hopeless, Pao said.

She said that there is an average of 80,000 demonstrations and protests a year. At least 200 protests are held a day. “Most of these are economic struggles,” she said. “Some are political ones.”

“The government is afraid that workers will soon link together,” she added. The government recently closed down a workers’ website, she revealed.

The scholar shared a story of 150,000 workers involved in a labor struggle. “Four workers were arrested, charged with conspiracy and executed,” she said. “The workers put up a monument for the slain workers. For the government, they are criminals but for the workers, they are heroes.”

“Imperialism cannot exist a minute longer if the people fight together,” she said. “It will happen. It cannot just continue like this.” Bulatlat

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