Paradoxes Go with China's Glittering Economic Growth
Alongside China's rapid economic growth, three paradoxes have yet to be explained: the declining prices, the lower employment rate and the bearish stock market. All the three phenomena usually accompany an economic depression instead of the bubbling briskness in current China.
Continuously diving prices in general indicate an economy has slipped into a deflation, suffering from consumers' sluggish purchase sentiment. After the widely acclaimed "soft-landing" in 1996 out of the sizzling macro-economy (the inflation rate then was as high as 27 percent) during 1993-94, the prices in China have been riding a downward trend. For policy-makers, cries for coping with the deflationary bites are as irksome as the deflation itself over the past five years. The increasing unemployment rate is another sphinx.
Although officials usually pin the unemployment rate at below 4.5 percent, analysts believe the figure should hit at least 7 percent, an internationally recognized alarm level. Some even project it at 15 percent or higher, pointing at the hidden unemployment in cities and the excessive labor in countryside. As for China's stock market, theoretically a barometer of an economy's health, it is completely a puzzle seemingly contrary to whatsoever rational answers.
Recording yesterday an all-time low over the past three and half years, China's stock market appears to be running on its own, ignoring the major indicators of China's economic performance.
"All these paradoxes do not contradict with the actual economic circumstances of China, lending no doubt of China's economic growth," Qiu Xiaohua, deputy director of the National Bureau of Statistics of China was quoted as saying by the Beijing-based China Economic Times.
For the declining prices, consumers' cautious consumption does play a certain role, which, however, should not be exaggerated, Qiu said. In addition to households' weakening buying willingness, there are some deeply seated reasons, according to the statistics official.
First, despite the 8 percent gross domestic product (GDP) growth in 2002, China actually has a potential to grow by 9 to 10 percent. When an economy operates under its potential supply capacity, it is quite natural for it to grow with the prices going down, Qiu said.
Moreover, technological advancements, the government's determined efforts to dismantle monopoly and encourage competition, and the reduced tariffs with China's entry of the World Trade Organization all help to drive the prices down. As for the rising unemployment rate, Qiu attributed it to the changes in China's economic growth mode and the employment structure.
Instead of simply relying on more investment of labor, land and capital, China is now trying to negotiate a higher economic output through the technological upgrade and the industrial structural adjustment.
Such a course tends to hype up an economy's productivity with the same or lower employment level, according to Qiu. In the past, with 1 percent GDP growth, China needs one million more workers. Now, however, the same rate of GDP growth can only create 700,000 to 800,000 jobs, he said.
The on-going urbanization and the sped-up restructuring in the State-owned sectors are also altering the employment structure of China. On the one hand, State-owned enterprises are struggling to survive through sacking excessive hands; on the other hand, farmers are rushing to cities, picking up jobs that might be done by the urban newly-unemployed if they want.
By now, the shifting population out of the countryside to cities usually stands at over 100 million, 90 percent of which have anchored their jobs there, according to Qiu.
For the inconsistency between the overall economy and the stock market, Qiu laid out a long list: regulators' weak supervision, listed companies' worse quality, the market's small size relative to China's national economy, and market participants' profiteering mentality.
But most analysts would rather believe another scenario: When the stock market was initially designed as a channel to bail out the deficit-ridden State-owned firms, and when nearly all stock-holders are well convinced that the shares in their hands can bring them not the so-called profit or dividend but a gambling chance, the stock market will surely bid farewell to the economic fundamentals and head for its own way.
Top 10 China Economic News of 2002 by Beijing Press
The following are the top 10 China economic news in 2002 picked out by 14 major newspapers of Beijing, published on December 27.
1. The 16th National Congress of the Communist Party of China (CPC) clearly put forward the objective of building a well-off society in an all-round way in China.
2. China's economic growth rate in 2002 reached around 8 percent and GDP surpassed RMB 10 trillion yuan.
3. The nation's realized foreign direct investment exceeded 50 billion US dollars, being the world top.
4. The nation's whole-year total import/export volume reached 620 billion US dollars, likely to leap from world sixth place to the fifth.
5. Important progress was made in transformation of government functions and the state revised over 2300 regulations and canceled 789 administrative examination and approval items during the first year of WTO entry.
6. The Ministry of Civil Affairs announced on July 19 that the nation has brought all the 19,308,000 urban residents who have difficulties in life or work into the state's system for ensuring a minimum standard of life.
7. On June 24, the State Council formally cancelled a provisional regulation requiring listed companies to sell part of their State holdings through domestic initial public offerings (IPOs) and additional share offers. In October the China Securities Regulatory Commission (CSRC) published measures on takeover of listed companies and information reveal of changes of shareholding of listed companies, but the stock market still remained sluggish.
8. The south-north water diversion project was formally kicked off on December 27, in which three canals will be built to link up the Yangtze River, Huaihe River, the Yellow River and Haihe River, with an expected investment totaling 500 billion yuan.
9. China's six major civil aviation groups were established on October 11, and on October 15 the China State Power Corporation was split into five power companies and two grid companies. This marks a milestone in the nation's industrial reform and regrouping.
10.China signed the Framework Agreement on China-ASEAN Comprehensive Economic Cooperation with leaders of the Association of Southeast Asian Nations (ASEAN) to kick off the free-trade zone, the biggest one formed by developing countries.
Let One Hundred Cultures Bloom
Nearly 30 years after the mind-numbing Cultural Revolution, China is free again to dream of what can be I once spoke to a wise man in Beijing about his house. he squinted through thick bifocals and dispensed aphorisms while tapping ash from his cigarette onto the gleaming marble floor. "When houses are old, their bones creak," he said. It was, he believed, time to buy himself a new home. I asked the age of his house. He said it had been built five years ago.
We foreigners judge China by its tragic layers of history, the thousands who died building the Great Wall, the chaos of the Cultural Revolution, the shocking massacre at Tiananmen Square. We are entranced by the epic sweep of the Middle Kingdom, and the Chinese themselves oblige us by talking endlessly of their 5,000 years of civilization. The irony, though, to borrow from historian Francis Fukuyama, is that China has reached the end of its history.
The 1966 to 1976 Cultural Revolution began the destruction, razing centuries-old temples and condemning China's imperial past as feudal and superstitious. For twenty years after the terror ended, people struggled just to find themselves, to recover from one of the worst tragedies a state could inflict on its people. Now, at last, the Chinese are able to look forward. A whole generation is coming of age, untouched by the nation's painful past. Eight years ago, when I studied in China, some of my classmates still referred to each other as "comrade." For China's youth today, such expressions from the Cultural Revolution seem as distant as poems from the Tang dynasty. Even the middle-aged, who suffered the brunt of those horrible years, are resolutely moving into the future, their dreams ever more expansive (and expensive): televisions; mobile phones; fully wired, million-dollar mansions.
This much more genial cultural revolution is transforming the nation. Walk Shanghai's Nanjing Road at midnight, and yesterday's factory workers are today's entrepreneurs, fashioning a neon dreamscape from ancient alleyways. Overseas Chinese return from five years abroad to find their hometowns unrecognizable, while in the interior, whole new cities are sprouting out of rice paddies. In many ways, this makes the Chinese seem like the most unsentimental people in the world-the cult of newness replacing the cult of history. But, in truth, this kinetic dash into the future is also creating one of the most dynamic societies on the planet. Designers are fashioning a new Chinese aesthetic, blending the here and Mao. Business moguls are building economic empires, flooding Asia with their cutting-edge products. Even those sclerotic communists are reinventing themselves, inviting once-disdained capitalists into their fold.
And that wise old man? I hear he's moved into a brand-new house, taking his prized collection of jade antiques with him. The next cultural revolution has only just begun-and there's no looking back.
16th Party Congress: China Elects New Leaders
Paving the way for the younger generation to take up the reins of the Communist Party of China, President Jiang Zemin and five other top leaders stepped down, leaving Vice-President Hu Jintao as the only politburo member to be re-elected to its 300-plus central committee in Beijing on Thursday.
Hu, 59, the first top leader of China whose party career began after the Communists took over in 1949, is widely expected to take over from Jiang as party chief when the central committee meets on Friday. He will also take over as president of the world's most populous nation and Asia's fastest growing economy in March.The party's landmark 16th congress, attended by 2,100 delegates, also unanimously approved in its closing session Jiang's proposal to open membership to formerly reviled capitalist entrepreneurs.
"The congress is a complete success. It is a congress of unity, a congress of victory, and a congress of progress," Jiang said while being flanked by the top Chinese leadership at the Great Hall of the People. "The 356-member central committee for the new term has been elected at the congress, thus ensuring the smooth succession of the new collective of the central leadership of the party to the previous one."
Jiang, 76, also ensured the retirement of the old generation of China's leaders from the seven-member politburo, except for Hu. Jiang and "five of his colleagues in the party's top decision-making body are not on a new central committee of the CPC elected here this morning", the official Xinhua news agency said.
Jiang's five colleagues who also stepped down are: Premier Zhu Rongji, parliament head Li Peng, both 74, Li Ruihuan (68), chairman of the Chinese people's political consultative conference, Wei Jianxing (71), head of the central commission for discipline inspection, and Li Lanqing (70), vice-premier.
The new CPC central committee is composed of 198 full members and 158 alternate members. Some 180 of the 356 members and alternate members are new faces.Hu was picked a decade ago by the late 'paramount leader' Deng Xiaoping to become Jiang's successor. He is set to become general secretary of the CPC, the world's largest political party, which boasts of a membership of 66 million.
While Hu is expected to be the only candidate for the top party post, Hong Kong media reports said Jiang's close aide, Zeng Qinghong, 63, is also vying for the coveted party title.
Hu, who has served key posts in some of China's poorest and most remote provinces, had demonstrated toughness in dealing with the Tibetan independence movement. Many Tibetans believe he had a hand in the unexpected death of the Panchen Lama, their second highest spiritual leader.
The 16th party congress also passed a landmark amendment to the constitution of the CPC to enshrine Jiang's thought of 'Three Represents' along with the theories of Karl Marx, Mao Zedong, and Deng Xiaoping.
Jiang's theory, which has been described as a breakthrough, calls for the inclusion of China's business class and capitalists in the party that has for long been regarded as the vanguard of workers and peasants.The congress also elected a new central commission for discipline inspection composed of 121 members to oversee the anti-corruption drive in the country.
Besides, it unanimously approved the 68-page political report presented by Jiang on November 8 and lauded the role of the president and his team in leading China to prosperity.
As is customary, a new CPC central committee will hold its first plenary session on the day following the conclusion of the party congress.The plenum will elect the CPC central committee general secretary, members of its political bureau, and members of its politburo standing committee for a new term.
In the last 13 years, the third-generation leadership of the CPC with Jiang at the core, which led China, has made universally acknowledged achievements in reform, economic and social development, maintenance of stability, foreign affairs, national defence, and administration of the party, state, and armed forces.
Quoting observers, Xinhua said the smooth generational change of the CPC leadership marks the maturing of the biggest ruling party in the world with a history of 81 years and demonstrates the advancement of political life in China."It is bound to have a positive, far-reaching significance for China's long-term prosperity and stability," the state-run news agency added.
Russian President Putin's China Visit: A Brief Report
The list of the documents that determine the form and content of the relations between Russia and China will now be growing by one more paper. This is the joint declaration of the Russian Federation and the People's Republic of China. Russian President Vladimir Putin and Chinese leader Jiang Zemin signed the document on December 2 in Beijing.
The text of the document allows to one judge both the state of relations between the two countries and the situation with the Russia-China-USA "triangle." The declaration also provides material to forecast several international events in the future. The preamble of the document sets out the determination to move forward, to expand and deepen relations and the strategic partnership between the two countries, and to realize the great strategic idea of being "good neighbors, good friends, good partners forever, but never enemies."
This statement is not unsubstantiated. It is supported by mutual obligations to solve several problems that hamper the strengthening. The document particularly reads: "To find a mutually-acceptable solution of the issue pertaining to the state borderline between Russia and China on the two parts that have not been coordinated yet; to expand cooperation in terms of illegal immigration; to take measures to strengthen cooperation and amend the adequate legal base in the field of ecology and environmental protection, paying attention to environmental collaboration in border areas."
Another important statement of the declaration runs: "The heads of Russia and China highlight the cooperation between the two countries concerning strategic stability issues for the sake of improving international security, as well as for global and regional stability." The declaration repeatedly mentions the thesis concerning Russia and China's adherence to the ideals of a multi-polar world.
However, the specific character of today's world showed its influence on this document. The wording of its statements allows to one read between the lines that both Russia and China understand the unipolarity of the world. Furthermore, the two countries are ready to adjust their policies to this.
"Serious and complicated changes took place in the international situation after the events of September 11th, 2001. International terrorism and other kinds of unconventional challenges imperil international peace and security." This statement of the declaration fits the neo-conservative concepts of the Republican administration of the United States. Yet, there might be something else implied in "other kinds of unconventional challenges." It might be Bush's zeal for domination.
"The sides invariably stick to their position about Iraq: the Iraqi issue can be settled thoroughly and completely only by political and diplomatic means, as well as on the grounds of strict observation of the UN Security Council resolutions." It seems that the writers of the declaration didn't have the nerve to say what millions of Arabs, Russians, Chinese, Britons, and Europeans say: a military solution of the Iraqi issue is unacceptable.
To all appearance, the obscurity of the declaration's wording regarding the mutual concern of the deployment of ABM systems deployment in East Asia (on a bloc basis) is not incidental either. The only thing that might raise a little indignation overseas touches upon North Korea: "The sides believe that the preservation of the non-nuclear status of the Korean Peninsula is important for the fate of the world and for the security in North-Eastern Asia. The non-proliferation regime is very relevant too. Therefore, in this context, the sides emphasize the extreme importance of the normalization of relations between the USA and North Korea by means of gradual observance of previously achieved agreements, including the Framework agreement of 1994 and a constructive dialogue for the regulation of mutual concerns."
This statement does not contain direct support of North Korea's suggestion to conclude a non-aggression treaty with the USA. Yet, Pyongyang is put on the same level as Washington, and the North Korean "concern" is equated with the American one. Thus, on the one hand, it is obvious that the diplomacy of both China and Russia personifies reasonable and peaceful tendencies. On the other hand, it can be seen that the foreign political priority for the two countries is relations with the saber-rattling USA. This is the priority for Russia and China after the tragic events of September 11th. The bilateral ties between Russia and China went into the background. Anyway, Vladimir Putin's visit to Beijing will probably improve the tendency of Russia and Chinas' slide towards American politics. We would like to believe that the current contacts will give more boldness to the leaders of the two powers for opposition to American supremacy.
Chinese Authorities Allow HIV-Infected Woman To Marry
We know almost everything about this 28-year-old woman: she is young and beautiful; however, not long ago, she was a junkie. According to official Chinese statistics, the majority of the one million officially registered HIV-infected people in China became infected using drugs; and the woman in question belongs this group as well.. She successfully managed to get rid of her drug addiction, but medicine is helpless against consequences of this awful disease.
The killer virus was discovered in the woman's blood five years ago. Naturally, the woman felt extremely depressed because of it, and she even attempted to commit suicide twice. A devoted friend helped her to believe that she can live and be happy all the same. This man is absolutely healthy; however, he all the same proposed to the woman. Contrary to Chinese legislation, which prohibits marriages whith HIV-infected people, the authorities of Guiyang, the capital of the province of Guizhou (where both the man and the woman live), decided to make an exception in this case. The couple is allowed to get married. Moreover, the marriage is scheduled in Beijing for December 1, on International AIDS Day.
The man and the woman not only dream of becoming husband and wife, they also want to have a baby in the future. This unusual case has caused an uproar in the Chinese press. A Chinese AIDS expert says that if the future husband takes necessary precautions, he will avoid being infected for a rather long period; however, nobody and nothing can give a 100% guarantee in this case. If the pregnancy of the woman is closely observed by doctors, the baby most likely will be born healthy. According to a local newspaper, the chances of the baby being born are approximately 90 percent.