Thursday, September 17, 2009

What it’s like in China today

First-rate video journalism.  China has seen 20 million migrant workers from the countryside lose their jobs in the past year and slip away back into the countryside.  Factory owners seem typically to run away leaving only a paper notice that the business has closed.  Stratfor has opined that disparities between city and countryside are the Achilles heel of the Chinese polity, and this video confirms that social unrest may be rising in the form of greater demands for “human rights.”  Workers from the countryside are alleged to “forfeit their civil rights” when they migrate to the cities.  As with America, the problem of collapse of effective demand is distributional in the near term.  How is Chinese capitalism any different from the American variant, and why should the tendency toward neo-feudalism be any less--if not pronouncedly greater?  This is the problem posed by “the end of history,” or the “triumph” of neo-liberal-conservative sometimes “democratic” capitalism.

Growth theory tells us that a dollar or Yuan saved is not necessarily lost to final demand—it may be spent on capital formation.  The Chinese need only to use their savings internally instead of loaning them to us to achieve massive amounts of capital formation.  The government is firing up big infrastructure programs to do just that, while blowing some of its other bucks on energy and resource deals worldwide while the greenback is still worth anything.

I taught in Taiwan about a dozen years ago in an executive MBA program.  The buzz in that part of the world then was incredible.  I was surprised at the attitude of the Taiwanese toward the mainland, which at that time was beating up on Taiwan verbally pretty badly, with all kinds of threats of taking them over. 

“We are all Chinese,” they said. 

1 comment:

  1. You've hit upon the two things that most Americans or Westerners don't understand about the Chinese:

    1. They've had it a lot worst. Especially the people in or from the countryside, which is a lot poorer than urban China. And there are still a lot of 50, 60, 70 even 80 year olds still around who've lived through the Cultural Revolution, when people literally starved to death, or had to try to eat tree barks and wild grass to survive. Losing your job in the city is not the end of the world. Oh and this is why they save so much. And the migrant workers send the money back to their villages to build houses, buy land and start small businesses which all help to cushion the blow.

    2. On Taiwan and China, yes, no matter how some Taiwanese will try to argue the point, in the end they're all Chinese - and they all realize that. They speak the same language (even the Taiwanese dialects are just that, dialects), share the same culture, have the same history, hold the same beliefs. If Taiwan was located in, say, Central America there might be a real good case to be made for independence. But being where it is Taiwan can only fight to delay the inevitable - hoping that China will have become more like Taiwan politically when reunification comes.