Do you think the supposed transformation of China from a poor Third World country to a wealthy First World country over the past 25 years is exaggerated or even complete bunk?
From what I’ve heard, it’s common for companies in China to pay their workers far less than they claim to, and even to withhold payment altogether. The investment money that has come into China has led to developments that failed because nobody can afford to live there.
Not to mention, the growth in China has come at a huge cost to public health.
China isn’t a first world country, their per capita income is half of Mexico and Brazil.
As a national entity they are arguably approaching first world. They are the world leader in investments in renewable energy. Their military is becoming a second tier force (probably as good as Russia, I don’t know) They are the #2 spender in R&D behind the US (I think they spend 2x as much as Japan as an economy). They will overtake the US in R&D spending by the next decade. On things like military, R&D spending, renewable energy, etc. China is a world leader or approaching one.
But they aren’t first world. They’d have to have their economy double a couple more times for that. 2/3 of China lives on less than $5/day.
Those stats are 6 years old though, I’m not sure what they are now.
Beyond that, I don’t know much about it. I’ve heard other people talk about how China is in a debt bubble and how they are at overcapacity for production.
Where have you ever seen a reputable assertion that China is now a First World country? There’s not really anything else to add based on that faulty premise alone.
China isn’t like the old Soviet Union. If you’re producing for domestic consumption you can fudge your figures and claim your citizens have more goods than is really the case.
But China’s economy is centered on exporting goods. And while you might be able to fake a little bit on the quality of the product and lot on the manufacturing process, at some point you have to put the products on a boat and sent them off to the foreign consumer. This puts a hard limit on your ability to lie about your manufacturing capability.
In addition to what everyone said, its clear China has a rapidly growing middle-class and China’s life expectancy has continued to grow and is comparable to if not better than that of “middle income” countries like Mexico, Brazil, and Russia.
It’s actually not a straightforward question; whatever answer someone were to give would likely be misleading, and I think there are a few disclaimers to get out of the way first:
Firstly, the idea of first and third world is somewhat old-fashioned. There’s really no basis for giving russia a special “second world” status, and why lump together into “third world” countries that are failed states, next to those a hair’s breadth from being considered wealthy?
Secondly, this forum is often written from an American perspective (for obvious reasons), and therefore any discussion of china is often polarized into “It’s all a sham; China’s economy is about to collapse” or “Wake up America! China is pwning us!”. Anyone living in China, very quickly sees that neither of these situations is very realistic.
Anyway, the closest I can come to an answer is that China cannot yet be considered a wealthy country while so many live in poverty. However, there is a huge middle-class, and given the population of china, they alone make up a virtual country with a population much bigger than the US (cite).
Granted, it depends how you define middle-class, but still, living in one of the big cities in China feels to me just like living in a european city, with all the amenities and luxuries, and no feeling that I belong to a tiny elite.
It’s not a “wealthy First World country.” It is a middle income country, which is not a bad thing to be.
I taught for a couple years in small-town China. The change is real, and absolutely breathtaking. My students grew up in extreme poverty- eating meat was a rare treat, their village might be a couple hours walk from the nearest road, and they had relatively little connection to the outside world. As women, the best they could hope for was a early marriage to somebody not too poor.
I just heard from one of my students today on LinkedIn. She is a buyer at a fashion company, a job she got after spending a few years abroad working in luxury retail. Most of my students have real career paths, middle class ambitions, and just a lot of options in life that didn’t exist a generation ago.
That said, it didn’t come easy. Their parents are largely migrant factory workers, which is a rough existence. And China definitely has a full plate of problems to work through.
But the change is there. Just in the two years I lived there, my grim industrial town got a Walmart, KFC, Belgian beer bar, two hand made pizza restaurants, a palatial new bus terminal, two modern nightclubs, a hot yoga studio and a whole new neighborhood of luxury apartments and shops. Probably more importantly, there is a new tunnel connecting the previously extremely remote towns on the other side of the mountains to the city.
People my age grew up when the tallest building was a five-story office block, most people wore Mao suits and there was no consumer or leisure activities. It’s just a totally different place.
It’s not fabricated, it’s just not sustainable. Chinese wages are beginning to reach parity with other countries, and its domestic market isn’t developed enough to continue supporting its growth rate once foreign investment tails off. It also has huge problems with intellectual property protections and other issues that are scaring off outside investment already.
Most importantly, they can’t keep their currency depressed forever. Sooner or later the burgeoning middle class will demand an end to currency controls so they can start buying real Gucci handbags and Moet champagne and so on.
Well, not really. Chinese public health was pretty awful even when it wasn’t growing, and it’s not that bad relative to public health in the major western economies during the Industrial Revolution.
The growth rate is not sustainable, I don’t think many people would argue with that.
But I don’t see any problem with domestic demand; the Chinese are not super savers like Japan, they covet their neighbour’s chrome oxen with neon lights.
Domestic demand is growing nicely for a country at this stage of development.
It’s a problem, but the West also has IP problems (though at the other end of the spectrum).
It probably does put off some investors, which is probably a good thing since the main worry for china is of an asset bubble.
Why would they do that?
Note that all of my Western friends buy the fake handbags…it’s not something people are going to grow out of, only a concerted effort on the part of the government would do that, but at the moment it’s not in their best interest.
How long before you think the increased economic freedom and wealth translates into a big demand for more political freedom? I can’t imagine that one doesn’t come without the other.
The rise of China has been the best economic news since the Industrial Revolution. More people have risen out of poverty faster during any period in the history of mankind. I don’t think China will ever be as rich as the US but no one should think of it as anything other than amazing.
Health service ? Loooxury ! When I were a nipper, if’un 'ad a broke leg one ‘ad to finish the 11 hour shift on t’treadmill, then walk 6 miles ter see t’quack through blinding smog; an’ all 'e 'ad ter give 'un were t’bloody leeches.
Which one 'ad to return wi’in ter week, mind you. Which were another day’s docking by t’bloody foreman.
There is definitely a curiosity about more political freedom. And there have been real changes in some areas.
But from a Chinese perspective, the connection between economic prosperity and political freedom isn’t necessarily seen as that obvious. In their own neighborhood they see places like Singapore thrive, while places like India struggle with persistent problems.
There is a certain amount of Chinese exceptionalism, and many believe that China is too big and too divided for democracy to work, at least right now. There is also a belief that the level of poverty right now is just too pressing, and that a centralized power is better able to build big infrastructure and make other long-term, big-picture investments that can lift everyone out of poverty and keep them there.
There are fragilities to this. Some amount of political legitimacy rests on continued booming economic growth, which is unsustainable. But they are working to address this, and the more recent slowdowns have been accepted.
In the end, China is going to take its own path. It won’t be exactly the one we would like, but we also aren’t the experts on nation building.
In my industry I’ve seen a few companies invest in China and then eventually pull out of China. It’s a great place to sell raw materials at inflated prices, but trying to do business their is full of graft and corruption.
I have read on more than one occasion that a big problem is China steals all your trade and corporate secrets then sets up their own industries that have support from the public sector like subsidized loans, grants, etc. which makes them hard to compete with.
The Chinese are intelligent people. I look forward to seeing what the nation does in the 21st century. I know they are trying to transition away from low cost manufacturing and move towards things like medical and scientific innovation and manufacturing of higher quality products. I hope they succeed, the world is better off with a rich, educated China contributing to solving the worlds problems. Like I said, they are already the #1 investor in renewable energy, spending something like $80 billion a year (vs about $50 for the US). I ‘think’ Chinese manufacturing is at least part of why solar panels have dropped from $5/watt a decade ago to less than $1/watt now.
No doubt about it, intellectual property rights are a huge issue with China. General Motors blocked the sale of Saab to a group of Chinese investors because at the time Saab cars were using GM’s technology. (GM had a contractual right to block any sale of Saab, as a condition of using the technology.) If they hadn’t, that technology absolutely would have been stolen and used by companies that GM competes with in China.
In fact, all the foreign-owned factories that various companies have set up are required to have Chinese partners. The not-so-secret reason is to make it easier to nationalize the factories if the Chinese government decides that such is necessary.
There was an excellent article in the Washington Post recently essentially arguing that American writers tend to view whichever small slice of China helps them to make their point, while the big picture is far more complex. It’s worth a read: