Tuesday, 13 May 2008

"Huge wealth; huge misery": China by numbers

The Independent on the 10th May had a China special. The numbers at the end of the article are worth posting to have on record.

Whilst the writing style is "sensationalist" it is well written and does paint a good picture.

The dragon awakens: China, how did it happen? [Independent]

What is happening in China is the greatest economic story on the planet. It is the world's biggest boom – and not just the biggest boom right now, but the biggest boom that has ever occurred in history.

As an economist I like numbers. For anyone in the US or Europe these numbers are astonishing. It takes many years to get agreement for just 1 runway in the UK let alone a whole airport (or 97 of them).

The statistics of the boom are astounding. China consumes nearly half the world's cement and produces 40 per cent of its socks. It commissions a new power station about every four days and last year built as much power generating capacity as the entire output of France. It plans to build 97 regional airports in the next decade. And so on.

This comparison with the UK over 100 years ago is a good one.

The other occasion was on the train pulling out of Shanghai. We were passing a wasteland, a site that had been cleared for new building. I glanced out of the window just as we were passing one of the last of the buildings left standing and for an instant saw a group of concerned people carrying out an elderly woman, who was clearly in some distress. I am pretty sure she was being taken from her home prior to its demolition. Then the train picked up speed and we were gone.

Victorian England must have felt like this. Visitors to Manchester were equally appalled and in awe of the stream-driven cotton mills. Huge wealth; huge misery. People ran to the city not because there were good jobs in the mills but because it was a better living than they could have had in the country. At least there was food to eat and there was money to be sent home. And so the workers flock to the cities in China, to what we would call sweat-shops, to produce the toys, clothes and furniture for the shops of the West.

As economists we should not pretend that things in China are any different but as happened in the UK and US these are growing pains that all economies need to go through. China will grow out of these pains a lot quicker than the West ever did (using and adapting Western technologies).

Before China reaches this position these growing pains could get out of hand - can the government negotiate the line between growth and social unrest:

Social tensions and economic inequalities may be even harder to tackle. You can really only catch a feel for that from the Chinese people themselves. A young Shanghai woman told us how she and another friend had spent their last holiday travelling round the deep country: they wanted to see the other China. She described houses where the animals lived on the ground floor, the family in the middle and the fodder was stored in the loft. She realised that these farmers had never seen people like her, the foreign-educated, new middle class of the cities, just as people like her never saw life in the countryside. They could not communicate for there was no common language. The division is even more stark than Disraeli's two nations: at least we could talk to each other.

As someone who writes academic papers on China this final paragraph reveals that there will never be a shortage of research ideas. This is an excellent finish to a very interesting article.

I am not sure we in the West fully grasp the magnitude of what is happening. Intellectually we can see it affecting us but emotionally it is hard to understand that we are moving towards a world where Western ideas, our ideas, will no longer hold sway. China has other ideas. Those will increasingly co-exist alongside ours in shaping global economic and political development. You can see that most obviously in Africa now. If a country seeking inward investment does not want to submit to the guidelines of the World Bank or Western donor agencies it can, if it has something to sell, get China to supply the funds or build the infrastructure instead. This is just an early sign of the shift in power that will go much further.

We will not find this comfortable. What we think will matter less and less. But we cannot do anything about it, and in any case, consider the alternative. Would we really want a China that was failing in economic terms, with all the misery that would cause? That would surely be far more dangerous and disruptive to the world than a continuation of China's thrilling but terrifying success story.

Here are some of the famous numbers:

30,000: The expected number of Chinese MBA graduates in 2008. The number in 1998: 0

5.7 million: Students graduated from Chinese universities in 2007 (compared with 270,000 in 1977)

30: Number of nuclear power plants being built in China

500: The number of coal-fired power plants China plans to build in the next decade

10 million: The estimated number of Chinese people who have no electricity

97: New airports to be built in the next 12 years, bringing the total number to 244 by 2020

540 million: Number of mobile phone users in China, with an increase of 44 million in the past six months

95: The estimated percentage of DVDs sold in China that are fake. Uncensored foreign films are widely available from 50p

160: Cities in China with populations that exceed a million. In the USA there are nine; in the UK just two

80: Percentage of the world's zips produced in factories in the Zhejiang Province city of Qiaotou (amounting to 124,000 miles of zip each year, or enough to stretch half way to the moon). Qiaotou also produces 60 per cent of the world's buttons (15 billion a year), while nearby Datang makes a third of the world's socks. As many as 80 per cent of the world's toys are made in China, which boasts more than 10,000 toy factories

21 million: The number of Chinese-made toys recalled last year by the US toy company Mattel

0: Miles of motorway in 1988

30,000: Miles of motorway today

6.3 million: The number of passenger cars registered in 2007 (compared with 2.3 million in 2004). More than 1,000 new private cars hit the roads every day in Beijing alone

350 million: The number of Chinese people who smoke (a third of the world’s smokers). Around a million people a year are thought to die from smoking-related diseases

240bn yuan: (£17.3bn) The estimated amount earned by the Chinese government in tobacco taxes in 2005

1.3 billion: China’s population. The country accounts for one in five people in the world 400 million

The estimated number of births prevented by China’s one-child policy, introduced in 1979

22: The number of suicides per 100,000 people, about 50 per cent higher than the global average. Suicide is the fifth most common cause of death in China, and the first among people aged between 20 and 35

700,000: The number of people living with HIV or Aids in China. The UN has warned China it could have 10 million cases by 2010 unless action is taken

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