China or America's century?

[the spliff fairy]

On the one child rule, it isn't as draconian as it suggests, it only applies to an estimated 63% of the population - the rest being either ethnic minority, single children (if both partners were single children themselves they are exempt), or in much of the rural areas, unenforced. The population still grows by 10 million every year.

However there is indeed a demographic crisis coming as people live longer and actively choose to have fewer children. The shortfall of women, despite now having the men paying dowry, is something like 20 million. More people are marrying than ever, and more divorcing too, so it seems not all the 20 million men will be partner-less their whole lives - but in terms of having children to grow up, the bottleneck is indeed coming.

This without a doubt puts India ahead in the long term.

The other thing is China is already inundated with growing immigration, its semi-porous borders with SE Asia and its growing link with Africa is drawing thousands of traders (Nigeriatown in Guangzhou grows by 30-40% a year, and numbers 200,000, although only 50,000 have permanent residency, usually from marrying natives). It remains to be seen how the govt deals with it, with open arms or a closed grate, or a Western style tap dance between the two depending on the economic and political situation.

In terms of democracy (or lack of) it definitely benefits China at this growing stage. Indian politicians complain of forging ahead with policies that make no sense merely to court votes and stay in power. Large projects, even small ones are scuppered by the many opinions and lawsuits, putting together a highway linking the 4 main cities is disbanded due to a small group of farmers protesting for higher compensation, large multinational companies are forced to cancel plans of building factories due to the same. Construction projects are all increased in cost by legislation, corruption and endless game changes, hence why India is still stuck with its vast city centre slums that vote not to be rehoused while China rehouses them with or without the residents approval.

In terms of democracy propagating a savvy and discerning middle class consumer culture, its also quite a grey area. Despite China's lack of free speech and human rights it still churns out huge creative output in media, technology, innovation, the arts and services. The country now holds the highest number of patents filed in the world, hosts the largest hi-tec industry and will soon be the largest generator of scientific papers. In terms of global competition the numbers are intense (for a random example, there are 20,000 design colleges around Shanghai alone), coupled with high education standards (the country with the worlds highest average IQ for starters, and Shanghai recently topping the worlds best education league when it was first tested). The contemporary art scene in Beijing has been the world's leading the past ten years, commanding the highest prices and churning out les enfants terribles for the buyers (though watch out, hier kommen Berlin). This I think is a bigger point than it seems - that despite all the state control and stifling of spirit over 60 years, the people still come up with the edgiest, most cynical, shockingand mould breaking ideas made flesh, something completely unexpected for a communist regime. Perhaps such a culture of stifling also leads to a culture of breaking out.

As for controlling freedom of information, as Bill Clinton famously said China's task is like trying to nail jello to the wall, with 500 million internet users and 275 million bloggers to try and police, and growing at such a rate it's set to overtake all English language users, combined, within the next 3 years. The IT professor who came up with much of the firewall coding is in hiding due to the deluge of hate mail and online campaigns he gets every time he shows his face.

The Party also struggles with an estimated 250,000 'mass incidents' a year, usually over workers rights, environmentalism, corruption and land. This is down from over a million in 2006, after which the Party hastily put together working rights bills (now better than EU but still open to abuse unfortunately) and improved working and living conditions - there are an estimated 200,000 grass roots eco-groups alone.

In short China is a behemoth much to its current success, but one which is increasingly hard to control and through sheer dint of size may end up falling with great loss. The coming demographic disaster, known as 1-2-4 in China seems the biggest obstacle on the horizon -1 child supporting 2 parents and 4 grandparents. The age of retirement is still 60 for men and 50 for women, with an additional 10-20 percent of retirees every year who haven't even reached that age. There is currently a $10 billion shortfall in the pension fund to boot.

[the spliff fairy]

The other main problem facing China (and India, and well, the world) is the limited resources. The environmental lobby of the Party estimates green issues robs the country of 5.6% of its GDP every year. Pollution, water shortages, desertification and ill health all add up, not surprising when its the workshop of the world and the greatest recipient of carbon export (when another country exports its carbon to China by setting up its factories and product-making over there). The country is still the worlds largest reforester by miles but the deserts still grow - go to Beijing every 'Spring' and see the air choked not with the usual pollution but dust storms from the encroaching Gobi. It may be the worlds leader in green technology but still relies heavily on coal; a moratorium on nuclear power has stalled dozens of power stations following Fukushima. The HSR network is also stalled following the 2011 crash.

China has no other option than go green in the future, we are already at 140% global biocapacity, and there is no vision for Western style lifestyles for all, as that is already multiple times worst case scenario in terms of sustainability. It has no economic future if it opts for a US model, we would need another Earth for that already. In terms of what it has done - bring 700 million people out of poverty it has to be said - if it had built those houses with the traditional brick, the country would have already run out of all earth and sand supplies by now.

In short behind closed doors, there is intense lobbying between the environmental long-term arm of the Party and the economic, short-term gain arm of the Party, with its heart set on claiming the last few resources already stolen by - and still being taken by- the West to boost its rise. It remains to be seen what emerges with the new statesman at the helm this year.

[the spliff fairy]

The final 'nail in the coffin' or 'opportunity to shine' depending on how you look at it is the question of democracy. once all the infrastructure's up and running and institutions in place if or when will democracy come to the people? already with ever growing voices thanks to a growing middle class.

For South Korea and Taiwan open democracy has worked well enough for the economy although alot of the old die-hard social and living problems still exist. Japan and Singapore with their quasi-democratic styles of single party power and for the case of Singapore - authoritarianism - has worked wonders. This halfway house seems to be the road China wants to go down on.

The big question also is national unity - 2/3 of the territory claimed by a majority ethnic minority (Tibet the most prominent example), and over 80 other ethnic groups subsumed as the umbrella term that is the 'Han' majority, speaking 6 distinct languages and hundreds of dialects. If democracy comes - and an end to the Communist 'dynasty' - will regime change bring about a fracturing of the state into multiple fiefdoms as tradition holds with its renegade warlord states (such as Tibet for 300 years). Throw into all this is the Taiwan question, with potentially destabilising consequences for the region as a whole that will make the Spratlys dispute look like glitches in comparison.

[the spliff fairy]

Worst case scenario for democracy - China fractures into multiple states, loses 2/3 of its territory and the majority of its resources. It has to import more food, and even more oil, gas and coal. Everything becomes more expensive, the country loses its competitive edge and mass industry decamps to poorer regions such as SE Asia and Africa. War with Taiwan, US entering the fold. Bureaucracy and legislation increases large projects etc, and any societal change becomes too expensive, inefficient and ultimately unpopular to create. Politics devolves into in-fighting and multiple govts every few years. Society is in stasis, culture increasingly left behind, obsolete and out of touch as the world changes around them. Creative industries suffer, religion becomes political. In a more individualistic society crime, inequality, corruption and uncertainty already bad, flower. Lazy education, institutionalised prejudice and extremism rear their ugly heads.

Worst case scenario for keeping things status quo - China loses its competitive edge to a newly rich and first world India, demographic disaster, crippling environmental issues, independence movements in 2/3 of its territories, haunted by terrorism and state brutality - even civil war or war with neighbours. A society cowed on the one hand and protesting on the other, with increasing unrest. State abuses of power and firewalling of outside influences increases, an isolated people. Loss of farmland and water to industry and desert puts increasing pressure on the economy and living. War with Taiwan, world denunciation. An unhappy, sick society.


Best case scenario with democracy:
Minorities vote to keep 2/3 of its territory as is, either through personal investment in the economic powerhouse, or the fact they have become a minority already in their minority lands and cannot stump up enough of a following. China keeps its competitive edge and its home market becomes ever more discerning and dynamic. As a multicultural nation its further boosted by immigrants to the economy, a relaxing of social attitudes and general freedom, tourism is its biggest earner. Porous borders for trade and culture with 14 neighbouring countries, and also alleviating the demographic situation. One child policy lifted but not a massive change in birthrates. Wages increase, as does spending. Green technology all round. Taiwan votes for rejoining the mainland. Or for UN recognised independence with PRC approval - either way it makes little difference.


Best case scenario for the status quo-
China keeps 2/3 of its territory. After building all the infrastructure needed a dirty China cleans up, switches to sustainable technology and practice. Wages increase, the domestic market powers the economy. Nationalism keeps the Han peoples united, crime remains low, education excels. With economic sustainability the one child policy is lifted, the demographic crisis averted somewhat, immigration increased for a multicultural society and retirement age extended with minimum fuss. Tourism, the worlds biggest industry, still booms, outside investment also. Gradually govt devolves into a free society, but authoritarian still, akin to Singapore. The streets are spotless, the cities glorious. With such monetary gain to be had in the pie, and relaxation of govt Taiwan votes for unification (do you want to be economically rich, or politically free?). Any major project or crisis facing the country is honed and fine-tuned to being surmounted thanks to fast acting law, minimised cost, efficiency and powerful organisation. Unwavering support from the people, all changes are still implemented under the one umbrella Party no matter how much it morphs between lobbies and ideologies.

It goes without saying all of these are extreme. What will happen in reality will be a halfway house of all of them.

[drunkenmunkey888]

This is a bit off-topic but mostly relevant as well. China's level of development was on par with India's in the 1980s and 1990s and far below that of the Asian Tiger Cubs (Malaysia, Philippines, Thailand and Indonesia) during the same period. However, in the 2000's, it quickly overshot all of them and now have higher GDP per capita than all but Malaysia. The reason I would attribute that to (and I'm surprised this hasn't been researched more) is the return of Hong Kong. It is really Hong Kong that drives China's economic success much like the reunification of East and West Germany in 1989. Since West Germany is larger than East Germany both in terms of population and economy, it was quickly able to turn East Germany from a relatively poor post-communist state into one of the wealthiest, most productive regions in the world. Now considering that overall, Mainland China is dozens of times larger than Hong Kong, simply reabsorbing Hong Kong won't turn Mainland China into a developed country overnight. But it gave Mainland China access to a pool of human, economic and social capital superior to all but the most advanced developed countries. If you look at the modernization China is going through, it is certainly not Western style modernization. Cities look nothing like any city in the West. But on the other hand, even remote corners of Gansu province or places in the far mountains of Sichuan resemble areas of Mongkok and Wan Chai.

The whole point of this is to say that Hong Kong (and to a lesser extent, investment from Taiwan) is leading China's economic modernization so far, which is why I am still on the whole, optimistic about China's future. Hong Kong has built one of the most advanced economies in the world and China has learned well from it and is continuing to imitate it as best it can. Taiwan has a nascent democracy and decades later, when economic parity is reached, China would have the infrastructure in place to learn from Taiwan's political system. China is no ordinary developing country. The country itself is still a middle income country but it has available to it the resources of two highly developed regions that have so far contributed immensely to its development and will continue to serve as a roadmap on how China can effectively modernize.

So keep in mind that a future scenario with democracy would probably involve a return of the KMT to the mainland as the other political party. If that happens, it would also be reasonable to assume that the KMT would be the more liberal, populist party while the CCP would be the more conservative (Confucian) elitist party. The Communist Party/Mainland China alone cannot serve as an alternative superpower to the United States, but together with Hong Kong and Taiwan, it would certainly be a bipolar world. It is just a matter of whether the CCP can continue to effectively harness these two regions rather than antagonize them (which if it does alienate them, then it is finished).

[the spliff fairy]

in terms of a 'Hong Kong model' then yes, China accepted Deng's pro-economy path of capitalism back in the late 70s after seeing what could be done with free trade and such a savvy, hard-working populace. But HK has always had to compete with what's across the border, or rely on it through all it's boom-bust periods. The colony was forced to switch from manufacturing to services after the Pearl River Delta was declared a special economic zone in 1980 - but at the same time HK capitalised on the huge cross border trade that resulted, with the city becoming the gateway to China for the rest of the world, and vice versa. It boomed.


However in terms of actually real money the colony was destitute by 1997, with all its major financiers, billionaires and institutions having upped and left before handover, and a massive braindrain as the moneyed classes immigrated to Canada, Singapore, US, UK and Australia, taking their fortunes with them. Moreover it found itself suddenly second fiddle to Shanghai which the Party placed as the 'head of the dragon', transforming it to the preeminent financial centre.

Help of course came out-of-turn from China itself, thanks to the now firmly established Pearl River Delta and massive investment from Mainlanders. Hong Kong's economy boomed once again, its GDP per person shooting up higher than its former colonial masters or the US, and its life expectancy leapfrogging to the best in the world. It's interesting to note how the SPG contingent switched from dating Brits during the 80s to Taiwanese in the 90s, while the noughties saw Mainlanders as cash cow of choice, the latter still looked down on by native HKers for their garish, nouveaux riche tastes.

In turn Hong Kong is once again entering uneasy waters as the Pearl River Delta - so long a source of HK's riches aswell as its competition, gives way to the Chongqing heartland, where labour is much cheaper and competition much less fierce. Hong Kong can still rely on tourism and its hinterland of 100 million Cantonese, and its 'open face' to foreign investment and cosmopolitanism, but its skyscrapers are no longer sprouting as they did, in comparison to the other Chinese cities, nor millions are trying to get across the border anymore, notably from the much larger Guangzhou and Shenzhen (the richest cities in the country). Its future looks set to become a city behind the other megacities, and -if the borders are erased - merely part of the larger megalopolis of the Guangzhou-Shenzhen conurbation. The glittering gateway, if not it's beating heart.

[Norge78]

Probably this will be a Global Century.

With many world Powers, not just one superpower.

Now there are around 7 billions of New Capitalists in the world.


And the american way of life of just 300 millions of people was clearly unsustainable as the 2008 american financial crisis revealed, fueled by huge private and public debts.

The ageing, unfortunately, is already a common problem for many western countries too

[drunkenmunkey888]

Originally Posted by the spliff fairy

in terms of a 'Hong Kong model' then yes, China accepted Deng's pro-economy path of capitalism back in the late 70s after seeing what could be done with free trade and such a savvy, hard-working populace. But HK has always had to compete with what's across the border, or rely on it through all it's boom-bust periods. The colony was forced to switch from manufacturing to services after the Pearl River Delta was declared a special economic zone in 1980 - but at the same time HK capitalised on the huge cross border trade that resulted, with the city becoming the gateway to China for the rest of the world, and vice versa. It boomed.


However in terms of actually real money the colony was destitute by 1997, with all its major financiers, billionaires and institutions having upped and left before handover, and a massive braindrain as the moneyed classes immigrated to Canada, Singapore, US, UK and Australia, taking their fortunes with them. Moreover it found itself suddenly second fiddle to Shanghai which the Party placed as the 'head of the dragon', transforming it to the preeminent financial centre.

In terms of actual billionaires, perhaps but I think you missed one part, which is the financial and management expertise that remaining Hong Kongnese bring to the table. Many of Shanghai's real estate development projects are Hong Kong investments and having done a brief stint at KPMG Shanghai, I noticed that almost everyone above senior manager was Hong Kongnese. The MTR is running subway lines in Beijing, Hangzhou and Shenzhen. The management/finance/legal expertise built upon decades of uninterrupted development over the past century when the Chinese were mired in revolution and communism is finally being unleashed in the Mainland, with results that would ensure that China's rise will continue, of course if Mainlanders are willing to keep following the Hong Kong economic model and fill the top echelons of business with Hong Kongnese. We're talking about taking full advantage of a city that has in the past decade unseated Tokyo as one of the three command centers of the world economy, something that most developing countries can only dream of. Without Hong Kong and Taiwan, I agree that India has a chance of overtaking China and I may also agree that China might never reach economic parity with the United States.

[Restless]

Originally Posted by drunkenmunkey888

In terms of actual billionaires, perhaps but I think you missed one part, which is the financial and management expertise that remaining Hong Kongnese bring to the table. Many of Shanghai's real estate development projects are Hong Kong investments and having done a brief stint at KPMG Shanghai, I noticed that almost everyone above senior manager was Hong Kongnese. The MTR is running subway lines in Beijing, Hangzhou and Shenzhen. The management/finance/legal expertise built upon decades of uninterrupted development over the past century when the Chinese were mired in revolution and communism is finally being unleashed in the Mainland, with results that would ensure that China's rise will continue, of course if Mainlanders are willing to keep following the Hong Kong economic model and fill the top echelons of business with Hong Kongnese. We're talking about taking full advantage of a city that has in the past decade unseated Tokyo as one of the three command centers of the world economy, something that most developing countries can only dream of. Without Hong Kong and Taiwan, I agree that India has a chance of overtaking China and I may also agree that China might never reach economic parity with the United States.

I'd extend the intermixing and learning, as the experience from Korea, Japan and Singapore is also very relevant. Plus don't forget it was Shanghainese that brought the initial capital and knowhow that started industrialisation in Hong Kong, so it's come full circle.

My view is that India is capable of becoming a developed nation, but I think their journey will be slower than the ones in East Asia. As for Chinese people reaching economic parity with Americans, I don't see any reason why this won't happen.

Everyone can see how Hong Kong, Singapore, Taiwan, Korea and Japan did it, and the different approaches taken. Plus China is similar enough for the experiences to be applicable.

And at the same time, China is also big enough for all the different approaches to be applicable.
Eg. State-driven capitalism in Jiangsu (79M people) versus more laissez-faire capitalism next door in Zhejiang (55M people)

[Erthel]

Originally Posted by Bannor

Thats why USA is moving towards Asia with tehir 7th fleeet these days. To keep a close watch on chinese employment.

Truth

[Future Cities]

Originally Posted by ssiguy2

By the time China manages to catch the US in economic, political, and social influence I think India will quickly upsurp them.

If you've been to China and India, I can assure that you'll realize that India is destined to play second fiddle to China for centuries to come. Having democracy and speaking English means squat all if you're one big disorganized, corrupt, feeble minded nation. Indians just don't have the ambition and determination like Chinese to play large on the World stage. They're quite content with serving their anglo sphere masters, hence why India is constantly spruiked up by it's former colonial masters to counter China in Asia. As of today India is atleast 30years behind China in nation building and infrastructure. Looking at your other posts I can presume that you're an Indian trolling this thread with your senseless rhetoric.

[onosqaciw]

Originally Posted by ssiguy2

. India has the advantage of having a large english speaking populace, .

able to speak english is not a prerequisite to be developed or super nation

[BE0GRAD]

Originally Posted by ssiguy2

Immigration would help but not much.

First, let's call a spade a spade.......... there is not much to go to China for. Even in 25 years, the standard of living will be much lower than US/Can/Aus/NZ whether that be lower wages, smog chocked cities, enviornmental degredation, over crowded cities, a conservative society, or corruption. This backed up by being in a military dictatorship with near non-existent human right's legislation, lack of free press or expression, and poor labour laws. Despite all the economic growth, China is still a tin-pot military dictatorship.

Who would move to such a place? Some may but only for economic reasons but not quality of life. People who's education put's them in high demand will be in high demand any where in the world. The well educated will have their choice of nearly any country on the planet and China's quality of life is and will still be far to low to attract them enmass. For those who go to China most will do so for short term financial gain or work experience but will probably not stay for long and certainly won't retire there.

Look at all the Chinese who are emigrating. They tend to be very wealthy and their money goes a lot further in China with it's much lower labour costs than it would do in any Western country but they leave because the quality of life is poor and the government a corrupt and oppressive one.

One also has to remember that the skills shortages in Western countries maybe even a few million in places like the US or maybe even Canada but with the hundreds of million of soon to be retirees in China, well there just won't be enough high skilled workers on the whole planet to make up that kind of shortfall.

It's main rival is India but India, while not a beacon of liberty, is still a free and democratic society. You can vote your government in or out and tell your government to go to hell and not be rounded up the next morning. India also has a society where free thought and expression are encouraged as their are fiercly proud of being the largest democracy on the planet. People who are very well educated need a free country that encouraged free thought in order to prosper whether financially or spiritually. India also has the benefit of having a very large english speaking populas and english is the language of business. This is why so many high tech jobs have been outsourced there in the first place.


That may rub some the wrong way but it doesn't change the fact that whether it be today or 40 years from now, China will offer little to most high skilled workers when they can pick and choice from any country they want.

Your view is too West-centric ,I'm afraid. Being able to vote your leadership is completely irrelevant for someone to concider a country nice to live in just like it is being "free" ,whatever you mean by that as it is a populist term and not an argument. What is important for an average immigrant is that he has good opportunities ,standard of living and justice system. Those can be achieved in any country ,democratic or not.

[AsianDragons]

the title is bad, what happened to india???

[Future Cities]

India isn't in the same league yet!

[null]

Originally Posted by Future Cities

If you've been to China and India, I can assure that you'll realize that India is destined to play second fiddle to China for centuries to come. Having democracy and speaking English means squat all if you're one big disorganized, corrupt, feeble minded nation. Indians just don't have the ambition and determination like Chinese to play large on the World stage. They're quite content with serving their anglo sphere masters, hence why India is constantly spruiked up by it's former colonial masters to counter China in Asia. As of today India is atleast 30years behind China in nation building and infrastructure. Looking at your other posts I can presume that you're an Indian trolling this thread with your senseless rhetoric.

China isn't an ambitious nation either.

[isaidso]

Neither. We'll end up with a poly-centric world.

[VECTROTALENZIS]

Check this

[IMG]media.economist.com/sites/default/files/imagecache/original-size/20111008_WOC579_0.gif[/IMG]

http://www.economist.com/blogs/daily...ndia-and-china

[Bannor]

Originally Posted by AsianDragons

the title is bad, what happened to india???

I responded to this in my second post. In other words, I don't think India will be in this league this century. Maybe the next one, but by then, most of us in here are likely dead

In regards to spliff's possible chinese outcomes, I think China will stick with a 1 party regime, but within the one party, there will be more a sense of open elections. So it will be a "restricted" democracy... As long as you are a member of the CPC. However, the CPC miht namechange. Because they are not really communists any longer. They are more marxist. And judging from the speeches lately by the leadership in china, they agree with this. Perhaps they will change into "The Marxist Party of China"? Now Karl Marx spoke about how the world needed capitalism first, but then it were to be overtaken by communism. China is still in the capitalist stage for at least 40 more years. I think China will move towards the positive direction of Spliff's various outcomes. I am a positivist on China partly because I've lived in Singapore (China's greatest idol nation), and partly because I think the leadership in China is doing some good things/changes lately. I am also glad they removed Bo Xilai. His political views could have been very harmful!

Corruption however is a big problem everywhere, and I don't think anyone is better than anyone else, but prosperous countries have more funds to combat it. Foreign investors I've spoken to in China is all telling me about how corruption is just a part of the game. I met an australian who worked in China (Shanghai) and had completed a master thesis on Chinese corruption in business last year, looking at the mining sector in particular. I don't think any country even in Africa is more corrupt than China here. But it is the way of the game in China. The rules one has to play by. It is dirty, but the business moves to the market, and now they have started to clean up.

The same thing is happening in India, and it will also do so in Africa. But at a much slower pace. The East Asian political model is superior to the west (this is comming from a westerner), but the east asians are suffering from extremely low fertility rates, and that is their major problem. So major that everything else doesn't really matter. But as I said, I am a positivist. I think the 1 child policy will be eased up. However, the most interesting question is if China can manage to retain a 2.1 fertility rate in the medium to long term...

[Chrissib]

Originally Posted by Bannor

but the east asians are suffering from extremely low fertility rates, and that is their major problem. So major that everything else doesn't really matter. But as I said, I am a positivist. I think the 1 child policy will be eased up. However, the most interesting question is if China can manage to retain a 2.1 fertility rate in the medium to long term...

Sorry to take away your optimism on that issue, but I think during the next decades China surely will stay below 2.2 children/woman (Because of the unnatural gender ratio at birth the replacement level in China is higher). The effect that the one child policy currently has is often overestimated.

http://www.oeaw.ac.at/vid/download/col091217sb.pdf

Here is a presentation about the current demographic situation in Shanghai. Most interesting is page 15, where they did a poll about desired family sizes. Basically the desired family size would increase by just 0.1 child when the policy is removed. It can be that in the rest of china the desire for children is still larger than in Shanghai, but because Shanghai works as a trendsetter for China, the desired family size in China will certainly decrease further in the coming decades and may approach the levels seen in Shanghai.

So the current fertility rate of 1.5 in China is most likely to sink further to levels seen in Taiwan, Hong Kong and Shanghai instead of increasing to 2.2, no matter if the one child policy gets removed or not. A big advantage of the removal of the one child policy is though that China would be able to collect complete data on births and would be able to calculate it's fertility rate with high precision instead of guessing it.