July 20, 2005

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China's Mounting Social Costs

NYT reporter Howard French writes compellingly about the increased rioting found across China's countryside as China's farmers take officials and company owners to task for corruption and the unaccountability of their actions. He focuses on a heavy 3-day riot over the health hazards created by a pharmaceutical plant. As many as 15,000 people were demonstrating.

We have heard for some time about Chinese citizens' newfound willingness to challenge authority when they find their life or livelihoods under threat. But what is fascinating is the reaction from the Central Government. French quotes government ministers in official statements saying that 'lower-level cadres are less competent' and that 'praised demonstrating farmers for knowing how to protect their rights.'

China's new generation of mandarins are grappling with two profound problems. The first is a lack of accountability in the political process, which can result in arbitrary and corrupt decision-making. The Central government is desperately trying to fix that by improving recruiting quality standards and reaching out beyond the Party for good civil servants; in the meantime they are becoming willing tolerant of short-term fixes like having mass protests act as a natural check on localized incompetence.

But let us hope they do not think that is the only problem; a systemic issue in China is that over the last 25 years it has gone from mass collectivization to a outright denial of many basic forms of social safety nets or protection. I'm far from being a socialist, but China's neglect of public healthcare and education systems, not to mention the environment is bringing with it mounting social costs. These are costs that China, as it becomes richer, will need to pay for in increasing amounts to maintain social stability. Because that's part of why these riots are happening too.

Is it a vicious circle though, because the Central government often can't collect enough taxes to fund these basic social needs and pension plans (that will make the US social security fiasco look like child's play when all these only children have to work for all the retired parents?) from local governments? What's your take on the solution to China's mounting social costs? Bureaucratic efficiency? More privatization? Less privatization? Democracy? Let's hear it.

posted by HK Dave on 07.20.05 at 02:33 PM in the


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My take? Seriously? I kind of think that they might need another revolution, actually.

posted by: RP on 07.21.05 at 12:54 AM [permalink]

A reveolution won't help. The problem is that things are moving so fast that there is not enough time to correctly allocate resources. This is not just a Chinese proble but applies to India, Korea and a host of similarly developing countries which are foreign reserve rich. Totatally different conditions to Africa where there just are enough resources.

The "revolution" needed is to contain corruption and evolve a transparent and equitable sustainablity. While then western world continues to consume the way it does, I'll follow the money rather than the heart.

posted by: da on 07.21.05 at 09:33 AM [permalink]

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