By Godfree Roberts selected from his extensive weekly newsletter : Here Comes China
Before we dive into Godfree’s newsletter for this week, those that are interested in space, satellites and imaging will enjoy this. China’s new ‘multi-mode’ satellite releases first high-res images and they are truly magnificent. Take a look as we do not have permission to post anything here.
This week from the Here Comes China newsletter, I’ve selected three pieces. The first is Godfree’s look at Poverty and Inequality in China, and for the second we take a look at Xinjang and finally, a video titled The US, Iran, China and Perspectives on the Global Crisis which is a panel discussion presented by the Institute for North American and European Studies (INAES) and hosted by Zeinab Ghasemi Tari with guests: Alastair Crooke, Pepe Escobar, and Seyed Mohammad Marandi
Poverty and Inequality in China
The moral test of government is how it treats those who are in the dawn of life, the children; those who are in the twilight of life, the elderly; those who are in the shadows of life, the sick, the needy and the handicapped. Hubert Humphrey, Nov. 1, 1977.
In 1850, when Western nations were the richest on earth, capitalists created the first market economy. By privatizing credit, land, and labor, they allowed human society to be regulated by the market. In 1950, when China was the poorest nation on earth, communists created an organic economy by subordinating credit, land, and labor to the service of society and trusting the government to regulate it. In 2020, after growing twice as fast, China’s economy is overtaking market economies in two important aspects: eliminating poverty and inequality.
In 2000, the United Nations set six Millennium Development Goals: eliminate extreme poverty, hunger, disease, inadequate shelter, exclusion, and gender bias in education by 2015 and, since then, on Poverty Relief Day, China’s President and Prime Minister, trailed by TV crews, have visited rural villages to remind urbanites what poverty looks like. In 2016, urban poverty disappeared and, by June 1, 2021, rural poverty will follow it and every Chinese in the lower half of the income distribution will own a home. Here we briefly retrace the steps in this remarkable program before meeting the poorest man in a poor village.
In 1993, Shanghai’s successful Minimum Livelihood Guarantee Trial Spot went national as today’s social safety net, dībǎo, which pays the difference between people’s actual income and the ‘dībǎo line,’ set based on local living costs. Though the qualifying process is daunting, the dībǎo gives recipients discretionary money and access to benefits like inexpensive medical insurance.
An ethnic Miao family exemplified rural poverty in 2008. They owned a little adobe house, farmed their tiny plot, sold blood, and did odd jobs to get by. With three children (minorities are exempt from family planning), they were unable to afford furniture so their clothes were folded on the floor and their entertainment was a black-and-white TV. They received a monthly living allowance of two hundred dollars from the local government, the husband’s occasional day jobs earned ten to twenty dollars, and blood-selling brought in another hundred dollars. His wife said this paid for sixty pounds of rice, two packs of salt, a kilo of peppers and a bag of washing powder, electricity and transportation. Their village headman explained, “Our village population is 1,770 and more than two hundred people live on blood-selling. Our land is arid, seven hundred villagers’ homes have no arable land at all and, without a road, they walk three miles for drinking water.”
Rural pensions, introduced in 2009, lowered poverty to fourteen percent then, in 2014, workers’ compensation, maternity benefits, unemployment insurance, skills training and equal access to urban employment reduced it to seven percent.
Next, tens of thousands of anti-poverty teams moved into poor villages to help them join the cash economy by growing mushrooms, planting pear trees, raising mohair goats, or hosting eco-tourists–anything to bring them into the cash economy. By 2018, pinned to the door of every poor household was a laminated sheet listing its occupants, the causes of their poverty, their remediation program, a completion date and the name, photograph and phone number of the responsible official. Corporations pitched in. Foxconn, Apple’s assembler, moved two-hundred thousand jobs inland, Hewlett-Packard moved huge factories to Xinjiang, and Beijing moved entire universities.
But it was infrastructure–roads, railways, Internet and drones–that tipped the scales. By 2019, lives in one-hundred twenty-three thousand poor villages had been transformed by high-speed, low-cost Internet service that made e-commerce, distance education, remote healthcare and delivery of public services possible. Isolated villages soon averaged four daily drone pickups and demand for drone piloting classes exploded as crop-spraying, land surveying, and product delivery made off-farm employment the majority of rural income.
To combat isolation, Congress took $120 billion from vehicle sales tax revenues and built 150,000 miles of new rural roads, one of which reached Mashuping, an isolated cliff village on the bank of the Yellow River and one of the poorest in Shaanxi Province. Villagers cultivated apples and Sichuan pepper trees but were forced to sell their produce cheaply to the few dealers who came by motorbike. Then a new five-hundred mile, riverbank highway brought ‘targeted anti-poverty teams’ and now, said a grower, “Our apples sell out when they’re still hanging on the trees”. By 2019, per capita income was twice the national poverty level.
Villages like Liangjiahe, where Xi Jinping grew up, exploit unique niches. Though cabbage fields still line its single road, the canny inhabitants cultivate tourists, charging thousands of visitors eight dollars to hear tales of Xi’s Four Hardships–flea bites, bad food, hard labour, and assimilating into the peasantry. They give three hundred overnight guests a taste of Xi’s boyhood in cave inns decorated with vintage Mao posters and kerosene lanterns and furnished with hard brick beds warmed by earth stoves. “All authentic, of course. We want to protect the Liangjiahe brand image,” a young guide brightly explained.
Dedicated software apps help rural laborers connect with employment opportunities, veterans and disabled folk to find piecework, and young people returning home to start businesses. In one Zhejiang Trial Spot, five hundred villages employ 200,000 locals to promote local products and skills in e-commerce niches where villages have organized into clusters around market towns. By 2019, rural online stores employed thirty-million people, creating an e-commerce market bigger than Europe’s.
Beijing judges anti-poverty programs successful when ninety percent of villagers swear, in writing, that they are no longer poor and after roaming teams of auditors conduct followup studies and send their findings, with videos, to anti-poverty officers. Beijing plans to recoup its entire poverty alleviation investment by 2040, through e-sales taxes.
In 2016 the government shifted ten percent of the equity in the most valuable SOEs into the social security fund and President Xi set a final goal, “If we lift ten million rural people out of poverty each year until 2020, the social security system will provide adequate financial support for our twenty-million disabled people.”
Accelerating inland growth has triggered coastal labor shortages and forced employers to automate, raise productivity, and move up the value chain–just as Beijing intended. In 2019, Mentech, a telecom manufacturer in coastal Dongguan, offered regular wages plus $1,100 guaranteed monthly overtime, air-conditioned dorms, free Wi-Fi, and birthday presents. Monthly manufacturing wages averaged $1800 in 2019 and overtime, bonuses, company housing and free meals allow workers to send money home. Factory workers are generally young, happy, and carefree, gossiping, flirting, listening to music and–except in large corporations–wearing what they please.
Today, adjusted for productivity, regulations and benefits, Chinese employees cost employers more than their American cousins and barely two percent of them pay taxes.
Until recently, millions of migrant workers who contributed to urban retirement funds could only collect full pensions in their home provinces, and local governments had no money for them when they returned at the end of their working lives. Despite pleas from cash-starved inland provinces, rich coastal provinces clung to multi-billion surpluses so Beijing endowed a trillion-dollar National Pension Insurance Program in 2011 and strong-armed provinces to join and the People’s Daily drummed up support by appealing to national pride, “In developed countries like America–whose Gini index sometimes reaches .41–income disparities are eased through gradually increasing taxation on the wealthy and improving welfare systems to help the poor. China should learn from America’s experience.” In 2014, civil servants and academics joined the national scheme and, in 2019, Beijing issued a billion electronic cards that access personal and medical records, dispense social security benefits, receive government subsidies and reimbursements, and pay bills.
As wealth redistribution becomes a national priority, economists are finding that inequality statistics have been exaggerated because land, housing and food are much cheaper inland–though their quality is identical–and rural incomes have fifty percent more purchasing power than coastal wages.
Adjusted for temporary migration, inequality shrinks even further. Until 2019, economists counted people by where their hukou were registered rather than where they actually lived, so the movement of three hundred million migrant workers distorted statistics severely. In reality, the coastal provinces have millions more migrant residents than their registered populations and the inland provinces have millions less, so a worker moving from the interior to the coast lifts inequality indicators because she contributes to aggregate income at her coastal destination but is still counted as living in her rural home. When analysts corrected the error, they found that regional inequality has been declining by 1.1 percent annually since 1978. In 2002 for example, it took the combined earnings of fourteen Guizhou workers to equal one Shanghainese but, by 2019, the number had dropped to five. Nor is the structural gap as painful as it sounds. Inlanders and their friends got richer every year and, to them, Shanghai’s glitzy lifestyle was no more relevant than Manhattan’s is to folks in Little Rock, AK.
Examining China’s inequalities from a global perspective is enlightening. In 2018, residents of coastal Guangdong Province were five times richer than those in inland Gansu–but Gansu folk were better off than average Armenians or Ukrainians–while residents of wealthy Beijing, Shanghai, Tianjin, and Jiangsu not only earned more than the average American but their median savings, $130,000 were higher, too.
Confucian attitudes will help the Great Rebalancing, since everyone knows the Master’s admonition, “The ruler of a state need not worry that his people are poor but that wealth is inequitably distributed for, if wealth is equitably distributed, there is no poverty.”
The Organization of Islamic Cooperation, representing the nations depicted on the left, welcomes the outcomes of the visit conducted by the General Secretariat’s delegation upon invitation from the People’s Republic of China; commends the efforts of the People’s Republic of China in providing care to its Muslim citizens; and looks forward to further cooperation between the OIC and the People’s Republic of China. Carried unanimously by the Organization of Islamic Cooperation, The Collective Voice of the Muslim World. Adopted by the 46th session of the Council of Muslim Foreign Ministers, Abu Dhabi, UAE, 1-2 March, 2019. 24-25 Jumadah Al-Thani 1440. [MORE]
No Cultural, Religious Repression of Uighur Muslims in Xinjiang says Pakistan Diplomat: A senior Pakistani diplomat on Thursday put up a staunch defence of the controversial education camps in China’s volatile Xinjiang province where thousands of Uighur Muslims have been reportedly detained, saying there is no forced labour or cultural and religious repression in the region. “During this visit, I did not find any instance of forced labour or cultural and religious repression,” Mumtaz Zahra Baloch, the Charge d’affaires, Pakistan’s Embassy in China, told the state-run Global Times on Thursday.
“The imams we met at the mosques and the students and teachers at the Xinjiang Islamic Institute told us that they enjoy freedom in practicing Islam and that the Chinese government extends support for maintenance of mosques all over Xinjiang,” said Baloch, who visited Xinjiang as part of delegation of diplomats.
“Similarly, I did not see any sign of cultural repression. The Uighur culture as demonstrated by their language, music and dance is very much part of the life of the people of Xinjiang,” she said.
Asked about the security situation in Xinjiang, which has been “beset by terrorism”, Baloch said, “We learned that the recent measures have resulted in improvement of the security situation in Xinjiang and there have been no incidents of terrorism in recent months.”
“The counter-terrorism measures being taken are multidimensional and do not simply focus on law enforcement aspects. Education, poverty alleviation and development are key to the counter-terrorism strategy of the Chinese government,” she said. Baloch said the delegation was given full and open access to the three centres that they visited in Kashgar and Hotan.
“The training program includes teaching of national common language (Chinese), law and constitution and vocational skills. The students also participate in recreational activities like sports, music and dance. We witnessed several skill classes being offered in these centres. During the visits to these centres, we had the opportunity to interact with both the management and the students. We observed the students to be in good physical health. The living facilities are fairly modern and comfortable with separate dormitories for men and women. They are being served halal food,” she said.
She said the Uighur language is being used in official establishments, airports, subway stations, police stations or hotels. “Even the copies of the Koran that we saw in the mosques and the Islamic centre were translated into the Uighur language. The most visible sign of protection of Uighur culture by the government is the government-run bilingual kindergarten schools where children learn Putonghua as well as Uighur language and culture from a very young age,” she said.[MORE]
I would consider this one a ‘must watch’ for a tremendously wide view on the Global situation.
Selections and editorial comments by Amarynth. (Go Get that newsletter – it is again packed with detail).