Doing research in China: constraints, conformity and self-censorship

Hong Kong-based economics professor Carsten A. Holz asks an important question in this month's Far Eastern Economic Review: Have China Scholars All Been Bought? Of course, you know the answer:

Academics who study China, which includes the author, habitually please the Chinese Communist Party, sometimes consciously, and often unconsciously. Our incentives are to conform, and we do so in numerous ways: through the research questions we ask or don’t ask, through the facts we report or ignore, through our use of language, and through what and how we teach.

Foreign academics must cooperate with academics in China to collect data and co-author research. Surveys are conducted in a manner that is acceptable to the Party, and their content is limited to politically acceptable questions. For academics in China, such choices come naturally. The Western side plays along.

China researchers are equally constrained in their solo research. Some Western China scholars have relatives in China. Others own apartments there. Those China scholars whose mother tongue is not Chinese have studied the language for years and have built their careers on this large and nontransferable investment. We benefit from our connections in China to obtain information and insights, and we protect these connections. Everybody is happy, Western readers for the up-to-date view from academia, we ourselves for prospering in our jobs, and the Party for getting us to do its advertising. China is fairly unique in that the incentives for academics all go one way: One does not upset the Party.

What happens when we don’t play along is all too obvious. We can’t attract Chinese collaborators. When we poke around in China to do research we run into trouble. ...China researchers across different disciplines may not all be equally affected. Economists and political scientists are likely to come up against the Party constraint frequently, and perhaps severely. But even sociologists or ethnographers can reach the forbidden zone when doing network studies or examining ethnic minority cultures.

Holz does not pull any punches, likening the Communist Party to the mafia. The examples he gives of 'doing research' are both fascinating and horrifying. Hat tip: China Challenges

Comments

[Arthur Eckart]

Obviously, China has a lot to hide. The article states China will surpass the U.S. in purchasing power parity in 2009. Yet, even Chinese autos are luxury goods to the vast majority of Chinese. Also, there are few Chinese factory workers earning over $100 a month (while the vast majority are still in the Agricultural Revolution). The link below shows Mattel and foreign distributers received $9.65 for each Barbie Doll produced in China, while China received $0.35 for labor, plant & equipment, and electricity. China's 12% real output growth either suggests the economy is much smaller, than believed, or it's in a boom phase of a boom/bust cycle. It seems, China shows only the "good" side of the economy (even when costs are higher).

http://www.globalexchange.org/campaigns/sweatshops/china/501.html

[Arthur Eckart]

Link below about Chinese labor is interesting (click PDF link in article):

http://www.chinalaborwatch.org/en/web/article.php?article_id=50342

Illegal discrimination based on gender, age, height, province, and origin
Wages below subsistence level. Workers earn $0.40 an hour, $3.22 a day. After mandatory deductions for dorm and food expenses, daily earnings drop to $2.55 at most
Routine 10 hour shifts, six days a week
Mandatory overtime shifts, without full overtime pay
Denial of paid holidays, marriage and bereavement leaves, to which Chinese workers are legally entitled
Lack of benefit rights for workers such as health insurance, work injury insurance and pension programs
Physical and verbal abuse

[marketreflections]

This is a good post, and I think CCP is aware of the "challenge", see my following post on marketreflections.com

041907 Red paper bear from china: not so scary

Nevertheless, it gapped down major stock indexes, who then realized that CCP bear is a paper one, just like that of US tiger. The indexes have since then been running iterations of “cups with or without a handle” , along a slowly sloping upward line, still bullish as of noon.
I never question CCP’s ability to handle anything such as GDP, CPI, three representations, ballistic missile, Olympic, etc.

The real challenge to future CCP generations is how to allow enough standard deviations for its otherwise highly “normalized” population, which has currently almost no standard deviations allowed on either side of CCP center.

Without enough standard deviations allowed, there will be no imagination. Just like today’s TSL and SOLF, you have got to allow them fly, with heads either up or down, and that is ok.

For bonds, you almost have to be a “party member” to get into the “elite” trading game, where volume matters, not imagination. How far you can imagine beyond Uncle Fed’s GDP and CPI estimates for 2007?

CCP is smart, no doubt. It allows many junior and non CCP 200 to play in the economic sectors out of CCP200’s interest, giving some vitality to its economy. Politically, it starts to have some non-CCP or people with secret CCP membership card to hold minister level positions in government.

In the sphere of minds, CCP is still struggling. I am sure CCP understands that they really cannot manufacture “Bill Gate” type of people, the way they produce “HU” style secretary-general, starting the process from CCP’s National Youth Committee.

Freedom is really expensive to rulers of any nation, including US. It is a challenge to their IQ and EQ.

The lack of freedom, as limited and wasteful as it could be, is even more expensive for a nation: Without “Bill Gates” types, there would be almost no Nasdaq; without Nasdaq, where US would be?

Back to the three slowly sloping upward lines, I would imagine that there would be quite a few bears trigged by CCP paper bear and jumped into a bear trap this morning. Will they get a chance to cover today?

[mike]

"""The link below shows Mattel and foreign distributers received $9.65 for each Barbie Doll produced in China, while China received $0.35 for labor, plant & equipment, and electricity. China's 12% real output growth either suggests the economy is much smaller, than believed, or it's in a boom phase of a boom/bust cycle. """

Unless China is counting that $9.65 toward its own GDP, wouldn't this mean the Chinese economy is actually *larger* than is thought? What happens when China develops their own global brands (already happening) and then revalues the yuan (also beginning to happen)? That Mattel margin will be staying in China, along with a scaled up $0.35 manufacturing component.

And with regard to the tough working conditions and abuse of labor: all these things were standard conditions in the US at the turn of the century. Like most human rights issues, this is just American hypocrisy at work. Guantanamo, anyone?

[mike]

Furthermore, "Wages below subsistence level" - this cannot possibly be true. These people are alive and working, are they not?

[Arthur Eckart]

Mike, China made $0.35 in GDP and foreigners made $9.65 for shipping, advertising, profit, etc. This means foreign economies are larger than thought, because consumer surplus isn't reflected in their GDPs. Subsistence wages are questionable. Chinese laborers are provided dormitories, cafeterias, and uniforms. However, if a laborer cannot perform, he or she is discarded. There are hundreds of millions of available laborers in China that can be exploited for 10 or 20 years. Living standards are relative. In a hundred years, people may assume we all lived like barbarians.

[T Yang]

Arhur, are you a beautiful girl? how could you draw in chinese factory workers at $100 a month? you would have been hot-hunted in china to be a HR director for those companies who have to pay $350 for each worker per month.

In adition to provide dormitories, cafeterias, social insurance,my boss have to spend Rmb896,353.43(Usd$115,658)for his 305 employees april paroll, however, he is still fearing those worker's job quiting tomorrow.

[Arthur Eckart]

T. Yang, you must get beat up a lot.

[Arthur Eckart]

T Yang, I suggest you get bigger glasses. The facts disagree with the propoganda (e.g. see pdf link in site below). The Chinese communists exploit its workers to extreme levels. If there's a labor shortage, it's only because Chinese workers would rather live on the farm or on the street than work for Chinese factories. Also, I may add, Chinese communist workers generally can't compete with Western capitalist workers, since most Westerners produce and earn up to 40 times more (measured in a hard currency). Chinese policies are naive and may not help China much in the long-run. Perhaps, an economic collapse will make the Chinese communists less arrogant.

http://www.chinalaborwatch.org/en/web/article.php?article_id=50342

[Arthur Eckart]

Chinese labor conditions are well documented (see links below):

"A Chinese factory that manufactures iPods employs 200,000 workers who live in dormitories where visitors are not permitted. Workers toil for 15-hour days for as little as $50 per month."

"Near-total lack of representation for the millions of workers, most of them 18- to 22-year-old women, who toil at assembly lines more than 60 hours a week for wages that amount to about $120 a month. And most live at their factories in company-provided dormitories and eat in company cafeterias -- and then hand back a third of their pay for food and lodging. Some unhappy villagers have gone home, and factory managers have begun to encounter labor shortages for the first time."

"A spokeswoman for Kaisi Metals acknowledged that working conditions at the factory in Guangdong province were not ideal, but insisted that employees chose to work long hours. Workers were paid US$24.33 (€18.69) a week — or US$0.32 (€0.25) per hour — for a 77-hour work week." "Grueling, exhausting, numbing, dangerous and poorly paid would be the only way to describe the work day at the Kaisi Metals factory," the report said.

VF/H.H. Cutler’s CEO said of the 28-cent-an-hour wages they paid in Haiti: “Well, the workers are alive aren’t they? So they must be subsistence wages.” "This is exactly the point. The factory workers in China do survive on their wages, because they work 12 to 14 hours a day, seven days a week during peak seasons, often with just one day off a month. They survive because most factory workers are migrants from rural areas who, once they arrive at the factory are housed 10 to 20 people to one small, crowded company dorm room. For the years they are at the factory, their “home” is a 2 ½ by 2 ½ by 6 ½-foot space on a metal bunk bed. They subsist on two or three dismal meals a day provided at the factory canteen."

"Can you live on the 25-cent-an-hour wages U.S. companies and their factory contractors pay in China, which come to about $65 a month? Not even close: It costs $12.05 a month in China just to provide milk for one six-month old infant. So this expense alone would consume 19 percent of your total wage. A very modest diet for a three-person family costs approximately $72.29 a month, which is more than most factory workers earn."

"Some expenses in China:

A quart of milk:
$0.82 --over 2 ½ hours wages
A liter of orange juice
$1.45 --five hours’ wages
A “Big Mac” with fries and a Coke
$1.93 --6 ½ hours’ wages
A movie
$ 1.81 --over 6 hours’ wages
A pair of Nike sneakers
$81.93 --nearly 5 ½ weeks’ wages
Men’s new shoes
$24.10 --80 hours’ wages
One man’s t-shirt
$ 2.41 --7 hours’ wages
A cheap, plain woman’s 2-piece outfit
$12.05 --more than 40 hours’ wages"

"U.S. companies claim they are developing a middle class in China. But how could a factory workers afford a new 15 by 17-inch color TV that costs $343.37, which is nearly half a year’s wages. Just the tax on purchasing a new car is $1,205, and to install a phone, the cost is $361."

http://www.nytimes.com/2006/12/19/world/asia/19shenzhen.html?ex=1324184400&en=e777bad42f7755a3&ei=5088&partner=rssnyt&emc=rss

http://www.truthout.org/cgi-bin/artman/exec/view.cgi/61/20552http://www.boston.com/news/world/asia/articles/2004/11/28/unrest_is_stirring_among_chinese_factory_workers/

http://www.iht.com/articles/ap/2007/02/05/asia/AS-GEN-China-Labor-Abuse.php

http://www.freerepublic.com/forum/a3952b6077ff6.htm

[Arthur Eckart]

Mike, you stated: "What happens when China develops their own global brands (already happening) and then revalues the yuan (also beginning to happen)? That Mattel margin will be staying in China, along with a scaled up $0.35 manufacturing component."

China receives $0.35 for labor, plant & equipment, and electricity (while foreigners receive $9.65) So, if production costs rise too much, foreigners will increase or shift production to lower cost countries. If the Yuan appreciates, it'll become less likely China will exchange dollars for Yuan (because it'll receive fewer Yuans per dollar). Chinese brands, at this point, generally can't compete on the world market.

[T Yang]

Arthur Eckart, i can not say you are an idiot,but completely brainwashed by the western media, instead of swallowing every word you get, you should use your own brain to doubt information, let's teach you some ABC to anti-brainwash; news from NT times" there are few Chinese factory workers earning over $100 a month",
Step 1, is it true? can you doubt such an authoritative media? of course you belive it is ture because you are brainwashed, however, you are human being, you can use the $100 to think more.
Step 2. can $100 explain China's saving rate(45%), 450 million Mobile phone/400 million fixed line phone user, 99% Color TV owner, 9 million vehicles sold in a Yr ....., if you can explain perfectly, please go to metal hospital directly.
Step 3. Is NY times lie? not completely, how much your 18-year-old american child can earn? for a developing country like china, an 18 year old girl who is taking her first job, $120 is better than nothing, but how about other chiense experienced factory workers? all of them same? you should doubt.
Step 4. Why NY times report like this, politics, it is not a lier but not give a whole picture,
Step 5, Highly recommend you to read some news from Xinhua with suspect mind to understand other side of a story.

Arthur Eckart, you are human being, no one expect you to be great, but before making noise you should use your own brain to think independently, otherwise, you will making funs and produce a lot of nonsense.

[Arthur Eckart]

T Yang, you stated: "Highly recommend you to read some news from Xinhua with suspect mind to understand other side of a story." I couldn't find any significant economic news or data from Xinhua. However, I found the following article (link below): "Xinhua: the World’s Biggest Propaganda Agency" Perhaps, you can list some links.

http://en.epochtimes.com/news/5-10-12/33256.html

[T Yang]

Arthur Eckart, "Xinhua: the World’s Biggest Propaganda Agency", spend some time to read Xinhua by youself, then make your own decision, epochtimes.com ( Falun Gong )who is claiming news like "20 million member of CCP quit the party", "Sujiatun Camp","organ harvest" ...., think twince.

CCP is being busy for money, there are many economic news or data from their source, I personally think you can take their information because no need for them to cook a better picture than real one which are good enough.

[Arthur Eckart]

T Yang, the Chinese elite overstates China's economy to justify its absolute power. China wants to show its people that communism (or state control) is more capable than capitalism (or individual freedom). Consequently, China has been expanding at a suboptimal rate (i.e. too quickly) to a large extent (i.e. the real costs are higher). Also, I may add, China's elite has the best estimates of economic data. The Western media has less accurate estimates of China's economy (even the CIA overstated the Soviet Union's economy by several times).

[T Yang]

Arthur Eckart, average chinese trust no one both communist Agency or western media, they trust the improvement of their own living standard, most are enjoying 10 times more wages than they were 15 years ago, instead of overstating, we chinese are thinking that CCP is exactly understate china's economy no matter you like or not...

China saving /GDP rate is roughly 50%, Investment / GDP ratio is 60%, it tax revenue have overtaken Japan in Yr2006, Foreign reserve Usd$1.2 trillion, Goods trade export reached Usd 1 trillion and overtook USA in Yr 2006..... all those do not reconcile with GDP number, the only reasonable explaining is that GDP understated, particular in Service sector.

[Arthur Eckart]

T Yang, there's not enough information to make that conclusion. A high investment or saving rate can be positive or negative for an economy. Given high Chinese investment (or saving), government expenditures (e.g. public works through taxes), and net exports, consumption must be very low. Also, the $1.2 trillion in dollar reserves is an accumulated amount (over years). In 2007, the U.S. will export $1.4 trillion and import $2.0 trillion. I suspect, U.S. exports far exceed China's consumption. Moreover, China's trade barriers don't add to living standards. I'm sure China also has very low debt levels. However, it's uncertain if that's a positive or negative. U.S. saving is low and debt is high. However, low prices (or more value) and cheaper capital induce demand (and raise living standards). Also, Americans must work longer to pay-down debt and build-up saving, which will add to GDP. Unfortunately, China is in many industries with declining prices, while the U.S. is in many industries with increasing prices. Consequently, U.S. GDP will benefit from greater exports. If China's social costs were taken into account, along with its trade policies, it's possible China has been working almost for free.

[Arthur Eckart]

Also, I may add, the 2007 path of $1.4 trillion in U.S. exports and $2.0 trillion in U.S. imports are in 2000 dollars.

[T Yang]

Arthur,"overstates China's economy to justify its absolute power", there's not enough information to make that conclusion, I am incline to one observation that CCP strategy is Tao Guang Yang Hui (韬光养晦), literally translated as "Hide brightness, nourish obscurity". In Year 2006, china trade increased 25%, investment increased 26%, tax revenue increased 27%, consumption incrased 13%.. how could it be possible to grow only 10.7% on GDP?

I personal think that China's GDP should be $4 trillion in Yr2006 ( 3rd barring by USA and Japan)and will overtake Japan in next year, far more than $2.7 trillion (Yr2006) CCP claims, of course, it is only my own opinion, but we can explain with this number for many china's puzzling saving ratio, trade ratio and total tax revenue...etc.

By the way, China's provincial GDP number totaling is much bigger than state one (about $400 billion more ), perhaps the china's provincial GDP number totaling is more reasonable (more number more tax, no point the provincial leader to report more).

[T Yang]

Arthur,"consumption must be very low", I do not think so, whenever you go to a chinese family, you can find everything - TV, Refrigerator, washing machine, DVD, cooking machine... crowded every corner the house, perhaps chinese owns everything an American owns,exception Car which is expensive for an ordinary chinese by the moment, but even car is steping into chinese family, I think cars sales in china will double within next 4 years to reach 16 million, overtake USA in Yr 2011.

Conception "Consumption must be very low" is fooled by CCP's statistic, are chinese so stupid to loan their money to state owned bank with pitful interest rate 0.72%? no one is willing to hold "paper note" (saving rate 50%) and not consume, the only explain is that you have too much, can not spend all and then save some after mad consumption.

China exports (tangible goods) exceed U.S exports in Year 2006, you can google from WTO source.

[somebody from some other country]

Of course you can't live the US life style in China. I don't even see why anyone should want to.

Shoes in China don't cost that much. There are plenty of far cheaper knockoffs (same for almost everything - phones, TVs, even entire companies are copied - go ask NEC ;) ). If they aren't really rich they don't need to pay 10x more to Nike.

I bet most people in China don't eat Big Mac meals every day (nor want to). They'll probably be eating much cheaper stuff - rice + vege + tofu/egg + fish/meat.

And lots of chinese are lactose intolerant and so they shouldn't be drinking milk (it'll probably be harmful).

As for the t-shirt stuff, what's wrong with working even 7 hours to buy something that should last you a few years? And I don't think t-shirts cost that much in China either. OK maybe a Nike one does..

But the same factory making the Nike shirt by day could be making a Nuke t-shirt at night which is much cheaper and just as good ;).

[Arthur Eckart]

Sure, why live in a rich neighborhood when you can live in a poor one. If copying is so easy, why aren't the Chinese (or any other country) building Toyotas or reverse engineering Cadillac SUVs. It would seem cooking Big Macs would be easier.

[Woba Li]

Arthur, you are the resident idiot on this blog. To this day, you still think Cadillac SUVs are high tech stuff? China's auto industry is the third largest in terms of cars built. And you think they dont know how to make SUVs?

You need to move out of your good neighborhood trailer park, visit your beautiful state of California and talk to the executives of those high tech companies. They will give you a lecture on current economy of China.

[Arthur Eckart]

Woba, I've seen Cadillac SUVs and they're high-tech luxury cars (see link below with picture of Jay Leno, who's a car collector and endorses Cadillacs). I guess, I am the "resident idiot," because I didn't know China made $60,000 high-quality SUVs, and with such ease. I'm living in California now, and not in a trailer park. The high-tech executives in Santa Clara, San Jose, etc. (and other "Silicon Valleys" throughout the U.S.) will tell you China is not even on their radar screens as a competitor. Of course, if they need slave labor for an obsolete product, China may be their first choice. However, unfortunately, given China has been sending sub-standard goods to the U.S. recently, to maintain low costs (see second link), it may no longer be the first choice for cheap labor. China's problems in the news are only the tip of the iceberg.

http://www.cadillac.com/index.jsp?noredirect=true

http://www.corpwatch.org/article.php?id=14610

[Woba Li]

Arthur, you are the most ignorant and arrogant American I have come across with, and I know a lot of rednecks from Reading, CA.

Cadillac SUVs are high tech? Jay Leno is an expert in high tech? Give me letterman anyday. Most of his collections are old classic cars, you lost all your credibility by using your Jay Leno card. If anything is high tech, it's the new Tesla car, but not Cadillac SUVs. This shows your beyond imagination ignorance and the sorry ass status of your education.

China has its share of low tech, labor intensive and sometimes low quality manufacturing industry. But China is also eating up the value chain and is seriously challenging those big established American high tech companies. You are an ignorant fool if you never heard of Huawei, Lenovo or ZTE. Do a wikipedia search, come back tell me who's Cisco's main challenger in the router business and whos' the world's third largest PC maker.

[Arthur Eckart]

Woba, if you don't know new American cars are loaded with high-tech equipment, then you're living on another planet (and you may be, e.g. in China). I'm sure Jay Leno has forgotten more about cars than you'll ever learn. I looked up your three Chinese firms. Here's what Wikipedia had to say about them:

Huawei: "In 2003, Cisco filed a lawsuit [18] against Huawei claiming Huawei infringed Cisco's intellectual property to develop a line-up of routers and switches. Huawei immediately stopped selling the relevant products in the US market and then agreed to modify its command line interface..." Lenovo: Is a Hong Kong firm. ZTE: "was awarded a contract from Viet Nam Railways valued at VND1 trillion (62.5 million USD) to upgrade and modernize the railway's signal."

I'm sure there are better firms in China. Here's a link to Cisco's competitors: http://finance.yahoo.com/q/co?s=CSCO Obviously, everything you say about me fits you perfectly.

[T Yang]

Forget Arthur Eckart, he is a colonial brainwashed american, you are wasting your time to educate an ignorant fool.

[Arthur Eckart]

Woba, aka T Yang, Jay Leno can teach you about cars in links below:

http://www.popularmechanics.com/automotive/jay_leno_garage/4206704.html

http://www.popularmechanics.com/automotive/jay_leno_garage/1563517.html

http://www.popularmechanics.com/automotive/jay_leno_garage/4200831.html

[somebody from some other country]

"Sure, why live in a rich neighborhood when you can live in a poor one"

Sure YOU can live in a rich neighborhood in the USA.

But millions of Chinese can't, and meanwhile they do what they do- make t-shirts, PCs, shoes, etc for other countries. They are definitely much better off than 30 years ago, so they must be doing a few things right.

What do you expect them to do? Wear Nikes, eat Big Macs, drink OJ everyday? That's what you're saying. You're expecting them to live a US lifestyle with US prices in China. Sure if the US is going to give them enough money to do so, they might. Meanwhile, they make do with what the USA is actually willing to give them in return for the goods they sell to the US. Trade. Willing buyer, willing seller. The last I checked the US Gov is the one that's always trying to force people/countries to do stuff they don't want to. Far more than some Factory Owner in China.

You think millions of Chinese won't want to live elsewhere? There's stuff called immigration controls. The USA don't want them or the Mexicans in.

I think that's fine. What's best for the country - just pick the best for citizens (none of this by birth thing for children of noncitizen immigrants), and save the low-end cheapest as temps.

Lastly, even though I CAN afford to wear Nikes, and eat Big Macs and drink OJ every day, I don't and I think I'm better off for not doing so. Typical meal here is USD1.00-1.50, healthier and tastier too IMO.

[Arthur Eckart]

The Chinese are hard workers. Unfortunately, they're working for foreign firms and communist elites, who've exploited them. There are more choices for Chinese workers today. However, the choice is often working on the farm or working in a factory, while living conditions remain poor and environmental conditions are much worse. If China had an open market, living standards would be much higher. Unfortunately, many of China's economic policies remain suboptimal to large extents, in spite of U.S. advice.

[Arthur Eckart]

Also, I may add, you stated: "Typical meal here is USD1.00-1.50, healthier and tastier too..." Compared to what? There's normally a trade-off between healthier and tastier. A Big Mac is tasty and not healthy. However, you could buy two regular McDonalds burgers for $2 instead, which are healthier and still tasty. There are other burgers, which are tastier, healthier and more expensive (e.g. a Burger King Angus burger). I guess, some prefer catfood, or a go-cart rather than a Cadillac SUV.

[T Yang]

"Unfortunately, many of China's economic policies remain suboptimal to large extents, in spite of U.S. advice." Go hell the U.S advice!!!!

The performance of China's economic policies is not decided by any foreigners but chinese people, CCP does not need to satisfy you american but chinese people, who cares your ignorant if most chinese people are satisfying with their living standard improvement, we are indeed satisfying with CCP's economic policies because our salary are increasing by 10-20% per year, China's GDP is being doubted by every 4 years (by USD measure),our living standard is improving so rapidly which let us find everyday is different and better than yesterday, what a wonderful feeling even we are still poor, China's development have proved those polices are wonderful policies, perhaps the best one in human history. China's policy makers are master in making economic policies for a transferring economy, in this field, U.S can not give any advice but only a pupil.

Due to our initial lower economic base, China is still poor and will be a developing country for the following 100 years, because you can not changed everything in one day, from a big poor developing country to developed one, we need generations hard working, but situation is gradually changing which can contribute to china's nice economic polices such as 8 employees theory; cat theory, stone theory, SEZ theory, tier development theory, three reprenstive theory...;
Year 2004, China's GDP overtake Italy (Usd$1.6 tri)
Year 2005, China's GDP surpass France (Ysd$2.2 tri)
Year 2006, China's GDP surpass UK (Usd$2.7 tri)
Year 2007, China's GDP is definitly to overtake German (Usd$3.3 tri)
Year 2010, China's GDP is gonging to overtake Japan, (My est. Usd$5.5 tri)
..... it is not bad to be a chinese in today's China.

What you can expect more, do not tell me those economic theory was copied from western, let's sample "8 theory" as it clarifies that it is socilism not capitalism if you are employeeing 8 staffs or below, the policies was implemented in Year 1988, economy was then booming contributed to the theory, hahaa!!

In case of environmental conditions, it can only be improved by economic development itself, for example, richer countries environment conditions are better than poor ones because they have more money being invested in those field of environmental protection, Shanghai, Guanzhou and Shenzhen's enviromental conditions are better than other china's poorer cities because local government have more money, thina's envoiromental conditions will become better as economy being more development.

[Arthur Eckart]

T Yang, I've shown you lots of evidence that support my statements. Obviously, you're in denial. China is adding more to foreign living standards than to its own (see prior Mattel and other foreign firm contracts with the communist elite, along with real losses in the foreign currency and bond markets). Over the past several years, it's possible, China's living standards fell, because of higher social costs, which are unsustainable (see examples of lower production standards). China may be working for free, if all costs are taken into account. There's a concept called "moral hazard." When Chinese firms don't take into account negative externalities, to maintain high profits, then more negative externalities will be created. Anyway, it's obvious, China's economic policies (including growth at any cost) are suboptimal to large extents.

[T Yang]

AE, you know nothing about what is GDP, GDP = GNP + (trade export - trade import), china's trade surplus was only $130 billion or 5% of china's total GDP,it is meaningless to China's total GDP,China's GDP growth is mainly depended on domestic market not foreign market contrast to what you think. for example, China's auto local sales for Year 2007 is about 9 million (4 times that of Year 2002), GM alone is 1 million, it is incrasing by 25% per year for years, by the way, China's economic growth contribution is bigger than USA in Year 2007, first time in history, it is only a starting!

The chinese dont blindly follow what Xinhua are reporting or western media are in denial, we belive our own eyes and feeling, we can tell you that China's living standards are indeed improving rapidly, china's consumption growth rate is stuning 14% per years, it is ridculous any foreigners brag around to local chinese that China's living standards fell, Chinese are not so stupid and dont know what is happening around us. we are not like you, an ignorant fool is busing to deny everything which is happening in a foreign country you know nothing.

The economic development is not only depend on nice economic policy, but also its people, the economic will naturaly increase if most of a nation's citizen is morden people. CCP's policies is not pursuit growth rate, they are focusing on education, social equeal, woman liberation, birth control, infrustruct building, rule of law and democracy, in short, china are still poor but it is a morden social structure and morden people which is CCP's achievement in the past 50 years.

With 1.3 billion morden people on hand, CCP does not need to do anything any more but sit down comfortly to count money and cooling the fast economy.

Any development depend on nothing but a morden social infrustructure which is CCP's feat. with current chinese people, they should enjoy GDP per capital at $15'000 not 2'000. as foreigners, perhaps you have an ideal about china's economic policies but you do not know Chinese people, thus, historily 95% of foreign economists made error prediction on china's growth.

In Year 1989, most foreigners predict the collapse of china within 5 years; In Year 1997, most foreign economists predict economic collapse in China; In Year 2001, the coming collapse of china, Gordon Chang
In Year 2007, what is your prediction? eh., ....... ignorant fools are everwhere in U.S.

[Arthur Eckart]

T Yang, GDP is output within a country's border regardless of ownership. GNP is output anywhere in the world based on ownership by country. Below is a link to a table that shows U.S. exports to China and U.S. imports from China (from 1985-2004). U.S. imports from China is much more than 5% of China's GDP. When other countries are included, China may be exporting up to one-third of its output. One of China's problems is deteriorating "terms of trade," since many industries have declining prices, while the U.S. has improving terms of trade, since many industries have rising prices. So, China has to make up in volume what it loses in value. GDP equals consumption, investment, government, and net exports. If all four components are rising over 14%, then why is GDP rising only 10%? I suspect, China's consumption is low, while the other three are high. China's GDP reflects foreign firms and the communist elite benefit from the exploitation of the Chinese masses. The Chinese aren't stupid, they're just oppressed. My prediction is China's living standards will continue lag output by a large extent, until better economic policies are adopted. China is not exempt from universal economic laws.

"According to Commerce Department numbers, much of what the United States exports to China are machines and machine parts, especially computer components and integrated circuits. Chinese companies assemble the parts into computers, televisions, telephones, toys and other office machines and consumer electronics and ship those back to the United States as well as to third countries."

http://usinfo.state.gov/eap/Archive/2005/Mar/03-517799.html

[T Yang]

Arthur Eckart; I recommend you to learn some from Deng Xiaoping's theories example as;

A) Cat Theory - It doesn't matter if it is a suboptimal economic policies or optimal economic policies, as long as it escalate economic growth, it is a good policies.

B) No-argument thought - Do not debate this anymore.

Note: Deng Xiaoping, August 22, 1904 – February 19, 1997) was a prominent Chinese politician and reformist, and the late leader of the Communist Party of China (CCP). Deng never held office as the head of state or the head of government, but served as the de facto leader of the People's Republic of China from 1978 to the early 1990s. He pioneered "Socialism with Chinese characteristics" and Chinese economic reform, also known as the "socialist market economy", and opened China to the global market.

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