Asia Sentinel

An extraordinary domestic study lists concerns about rents in the social fabric

In Dongguan, an export center close to Hong Kong, the police last week reported a record rise in the crime rate – 5,300 cases in the first 15 days of December – and issued a handbook for residents to protect themselves from violence, street robberies and break-ins.

The warning came during the same week that President Hu Jintao gathered China's elite into the Great Hall of the People to celebrate three decades of economic change that gave China the world’s fastest growth rate and saw it turn from a starving country on the edge of bankruptcy into the world’s fourth largest economy.

It is thus more than true that there are in reality two Chinas and a government in a race to see which one will prevail. The global economic crisis has cast a heavy shadow over China’s success story, with Dongguan and the rest of Guangdong Province, China’s richest, providing dramatic counterpoint to the feverish efforts by China’s leaders to contain the damage.

In November, the government announced a huge Rmb4 trillion stimulus plan to attempt to ameliorate the slowdown, and that has been followed up by plans by provincial governments to add as much as another Rmb10 trillion in spending. Hardly a day goes by without another announcement of a major stimulus. Last week was typical.

On Monday, for instance, the stock market reacted to news that the agriculture sector would be the recipient of major investments, making rural areas and residents a top priority in 2009. On Tuesday, the government announced a substantial boost in spending for the power grid and construction of nuclear plants. On Wednesday, it announced import and export tariffs would be adjusted for machinery and electronics.

On Thursday, it announced the launch of yet another stimulus plan to boost real estate starting Jan. 1. On Friday, the State Council announced it would cut the fuel consumption tax.

There are questions if it will work. In a remarkably frank study published last week called “Analysis and Predictions of Chinese society in 2009.” the China Academy of Social Sciences set out the three big risks for the year ahead:

• Unemployment could go as high as 9.4 per cent because of the factory closures caused by the financial crisis, the Sichuan earthquake and other natural disasters and polluting firms shut by tighter environmental laws.

• The lack of affordable housing has urban residents angrier than any other issue: 47 per cent of people surveyed said that they lived in bad housing and could not afford their own home. “The housing conditions of low-income people in large and medium cities is far behind those of other groups of the population,” the study said. That is being exacerbated by a collapsing housing bubble that may be almost as big as America’s. Property prices, down from their peaks, still have as much as 20-30 percent to fall before 70 percent of the population can afford to buy Both the central and provincial governments have announced measures, including cuts to transaction costs easier mortgage terms, especially for first-time buyers, and extended payment schedules for developers’ land premium installments, all to no avail.

• The increasing gap between rich and poor, officials and common people is cause for increasing outrage. “These two conflicts are the most likely fuses for social conflict,” the survey. 68.8 per cent of those surveyed said that, during the last 10 years, officials had gained too many benefits, while workers, farmers and migrant workers had gained too little: 36.3 per cent said these conflicts would intensify in future.

Corruption remains a major source of discontent, with 39 per cent telling the researchers they were unsatisfied with the government’s attempts to deal with it. The study said it was no longer enough to rely on campaigns and individual leaders to fight corruption and that a new system was needed in 2009.

Many people in senior positions are corrupt,” said Lin Qi, a Beijing consultant. “The wife of Wen Jiabao, a geologist, is the chief valuer of jewellery in China.”

Comments (2)

Subscribe to this comment's feed

Show/Hide comments

China's Year of Living Precariously
written by 666 , March 04, 2009

The US $2 trillion in reserves is not cash; it is loaned from the US from trade deficit. When the Chinese
people find out. It is a serious social problem.

report abuse

vote down

vote up

Votes: +0

Social inequities
written by Mao , December 23, 2008

Instead of priming the economy with massive infrastructure projects, Hu and Wen should do much more to mechanize agriculture so as to improve the productivity of the rural area. Far from the socialist utopia promised by the Communist, peasants are still bearing the yoke of expliotation with little investments from the State.

report abuse

vote down

vote up

Votes: +0

Show/Hide comment form

Write comment

Name

Website

Title

Comment

smaller | bigger

Subscribe via email (Registered users only)

I have read and agree to the Terms of Usage.

Write the displayed characters

Add Comment