Sep 04

China’s Hazy Future?

Written by Allen on Thursday, September 4th, 2008 at 7:13 am
Filed under:Analysis, culture, Environment | Tags:, , , , ,
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According to an article from the Wall Street Journal two weeks ago, China will face three major problems in the coming years.  The problems involve: the nation’s changing demographics, the increasing strain on energy and environmental resources, and widening social inequalities between the rich and poor.

On China’s growing top-heavy demographics, the article offered:

The precedents aren’t encouraging. Many developing countries in Latin America and the Middle East stagnated after periods of rapid growth. Economists sometimes call this the “middle-income trap” because so many countries have failed to achieve consistent growth that would deliver higher prosperity.

In the next few years, China will cross the threshold to a majority-urban society. China’s urbanization rate is about 40% to 45% now, well below levels of about 75% in most of Western Europe and Latin America, but statistics show that growth in China’s urban population is already slowing

The “demographic dividend” from a young and growing work force may have been responsible for a quarter of China’s growth to date, says Wang Dewen, a demographer at the Chinese Academy of Social Sciences. In the future, he and other scholars argue, China will have to grow by making more productive use of fewer resources — working not just harder, but smarter.

Regarding the increasing strains on energy and environmental resources, the Wall Street wrote,

China’s growth has depleted global supplies of energy and raw materials, as well as its own resources of clean air, fertile land and drinkable water. Without improvements in efficiency, China’s expansion will be constrained by the finite supply of such essentials. In recent months, the nation has been plagued by shortages of gasoline and electricity, illustrating the limits to its consumption.

So far, China’s government is falling behind in its drive to cut the amount of energy required to produce each yuan of economic output. It managed a reduction of just 2.9% in the first half, less than last year’s 3.7%. Economists say China’s low state-set prices for energy need to become more market-based to create pressure to conserve

Regarding the growing social inequity, the paper explained:

Just 30 years after it began moving away from socialism, China has become one of the world’s most unequal societies, based on measures of the gap between richest and poorest.

Addressing that will require repairing a dilapidated network of social services — something the government says it is working on.

“The party will need to take itself on in very difficult ways to address this issue,” says Minxin Pei, a China scholar at the Carnegie Endowment for International Peace in Washington. Addressing inequality “will be a wedge issue among the ruling elites — not just an issue that divides the haves and the have nots.”

What do people feel is the prospect for China’s developments in the coming years?

I am particularly worried about the demographics.  Japan is facing a long-term stagnation partly because of its top-heavy demographics.  Will China succumb to the same fate?  I am also concerned that the environmental problems will only aggrevate the problem – as old people develop diseases associated with excess pollution.

Energy and resource limitations are definitely another concern.  There is no way for China to industrialize the same way of the West.  The burden on global resources will be too great.  Will China become energy efficient in time?  Will technology be China’s savior?  Will intelligent urban planning do the trick?  Or will Chinese learn to live happily with less resources per capita?

Finally – social inequity.  Is China about to explode or are things under control?  What can be done to reduce this gap?  Will the Chinese become fatigued from the almost single-minded focus on economic development that has dominated the national psyche for the last 30 or so years?

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39 Responses to “China’s Hazy Future?”

  1. Michelle Says:

    So many people for so many years have been convinced that some kind of ‘big problem’/ disorder is just on the horizon for China. I don’t really see it. The only time I’ve ever felt like the roof could possibly come down was SARS (but even then not really) and any of the anti-foreign protest periods in the past few years, those are pretty scary, but i admit probably only really scary because i’m one of the foreigners!

    Anyhow, I digress. As long as reality exceeds expectations, all will be well (in terms of unrest). For now i get the feeling that people don’t really have high expectations, just modest ones, and the rate of change is faster than people’s expectations can catch up. So long as this is the case, and there is no real sense of entitlement (kept in check by media control) to things like clean water, adequate pensions, etc. everything will be fine.

  2. Wukailong Says:

    After so many people like Gordon Chang have been crying wolf, it’s quite natural to think that this is just another one of the “China doom” theories. It might turn out that way in the end, but I think the difference this time is that both the government and major think tanks acknowledge the problem.

    Anyway, if the growth of the urban population is slowing down, now is the time to begin dismantling the hukou system and seriously create more labor protection (rural population that’s moved into cities often face dubious employers). The latter has been under way for some time, the former needs more legal protection than things like 暂住证.

    As for the use of energy sources, China is currently very inefficient. Even India uses its sources more effectively (I read somewhere, can’t find the source now). Luckily, China seems intent to cooperate with Japan on this issue, one the most energy-effective countries in the world.

    Almost all these concerns are address under the banner of “harmonious society”, but it is of course an open question whether this vision can be put into practice.

  3. Michelle Says:

    I agree, and I would really like to see China capitalise on the opportunity it has to leap frog over older energy solutions to those of the future. Of course, what these are is another debate altogether, considering the dust that topics like river dams and nuclear power kick up…

  4. Netizen K Says:

    I think China’s future is good. Nasayers are many in the last decades and they are all proven wrong.

    Regardless, China has problems and the Chinese know it. That’s why they reform their systems. I think they will be successful.

  5. Nimrod Says:

    Very good topic. China has lots of big problems, some of which the world hasn’t had to deal with. That’s why it’s such a hot topic of concern and debate among armchair policymakers and why they’ve often turned out to be wrong.

    1. Rich-poor gap — As I’ve explained elsewhere, the (growing) gap is a known artifact of the policy of “some people get rich first”, which is a mode of fast disequilibrium growth. It does not need to be a persistent phenomenon. Whether people accept this, well, besides the fact that it is a social contract, Michelle’s #1 is exactly what I wanted to say on that. I think (so far), things have been changing so fast that even the poorest of the poor peasants can have a reasonable dream that they will get rich in their lifetime with hard work and some luck and enterprise, because their cousins may actually have. And they’ve been through so much worse.

    2. Productivity and innovation — But to continue that legacy, China will definitely need to increase productivity and move up the food chain. Some of that will be forced by the changing demography imposed by the one-child policy. This will be the most difficult and unpredictable task to handle. If it can be handled, many of the other problems (environment, energy use, inverted population, etc.) will take care of themselves because they all boil down to this problem. I’m generally optimistic about Chinese finding new/more productive ways to work because Chinese (culturally) are not only among the hardest-working but (people tend to forget) the most enterprising people on this planet. Chinese companies in certain emerging areas have also done well, due to China’s unique human resources and lack of regulation, in mobile technology, in internet TV, genetic engineering, and alternative energy.

    3. Retirement and aging — In terms of the strains of an aging population, China’s current savings rate is encouraging. There is enough money to pay for retirement over all, and that’s all that matters. Either Chinese culture’s filial ties help to take care of the social net, or the government taxes. I don’t see how this can be any more alarming than the truly alarming trillions-of-dollars-in-the-hole retirement system of the US, with a population that enjoys negative savings. Effectively, China may very well be funding both its own retirement and that of the US in the near future.

    4. Political fallout — Allen also quoted the “wedge” issue between ruling elites. Indeed this has become somewhat of an issue, and is manifested internally in the left-right debate, which quickly turns into a debate over whether and how quickly to adopt features of the Western systems and what from them. This includes things like voting. There is a big long-term social contract in China that certain people would like to forget, where some people/some regions got to get rich first to get things rolling, but then they were supposed to get taxed heavily to subsidize the development of the rest of the country. We’re seeing that now imposed top-down through long-term planning, but if we allowed open voting and instant “democracy” at the national level, China (just considering the neidi parts) would not only split along regional lines but exactly into this kind of populist-rural vs. elite-urban political in-fighting and gridlock that have prevented the likes of Mexico from escaping the middle-income trap.

    I’m almost certain Chinese policymakers have been intensely studying cases like Mexico to see what its problems are and try to avoid them. Chinese policymakers are pretty methodical about these things. This is done at a high level and in a coordinated way, and once the decision is made, it is put into long-term planning and implemented for decades to come — much more effective than the thinktank-government relationship in many countries.

    5. Development fatigue — All else being equal, psychology is everything. Surveys show Chinese people are optimistic. Chinese individually and China collectively have big dreams and incredible drive. How many countries today can you still say that about? Having a healthy and positive national dream of redemption from the hundred-years shame does wonders to ease development fatigue — I wouldn’t worry about that till China is at the top. 🙂

  6. wuming Says:

    This is an interesting discussion.

    Michelle and Nimrod — I agree with you on the point of expectation vs.development. This is a key factor in ensuring social stability and further development. Stability and development happen to be the twin obsessions for Chinese government and Chinese people.

    On aging population, in addition to Nimrod’s observation about special Chinese cultural characteristics that may help alleviate the pressures, China has also several tools in hand for that:

    First, China can gradually relax the one-child policy to insure a stable population replacement rate.

    Second, China can increase the retirement age. You may have seen many middle-age retirees (especially women) exercise in the parks in Chinese cities. In these parks lie a great pool of productivity that is left untapped up to now. Gradually lifting the retirement age may help China to get of the aging population hump until the effect of the first measure starts to kick in.

  7. Charles Liu Says:

    On the issue of rich and poor, one might take a look at the Gini Index:


    US and China are both in the middle, 0.4-0.5 range as it seems. Then again America is the height of Western Civilization, and China is supposedly the commie scurge of the earth.

  8. Daniel Says:

    You all have very good comments, and from what I’m reading, it appears that it’s not they don’t have the ideas or will to do things, it’s to actually do them, to take action that needs to be done. However, that is a process which takes time and nearly everyone knows that.

    The only thing I see which may be a very tacky issue to deal with would be the rich-poor gap. Generally, if the middle class is very large, it’s not quite visibly noticeble (in a sense), however I think how one defines the wealth gap differs place to place. Income, property, material possesions, status, etc. I sort of believe that as long as humans live in such societies, there’s always going to be poor and rich…and the gap can be as wide or thin as it could be. Plus, if it’s moving in the direction that I think it is, then there is a chance we could be seeing just as many rags to riches stories and the riches to rags stories of a lot of people. So, it could be harder to deal with than the other issues.

  9. Daniel Says:

    Actually, I forgot to mention about the rich-poor gap. Even though social mobility is becoming more smoother than before, this problem has been a shadow in most human societies for a long time. No doubt our ancestors did spent some time to think about it as well, in regards to the other problems.

  10. jack Says:

    I am no expert on economics or sociology, but I’d like to clear the air a bit through my rationale.

    About the inequality. As long as the government keeps delivering economic growth, I do not believe the financial divide between the have and have-not will eventually bring down the society.
    Take US for an example, the bottom 50% population own less than 1% social wealth;as for the super-rich 1%, according to an UN survey in 2006, the world average number is 40%,I guess the number for the 1% super-rich in US would be way higher than that. In a sense, today’s China resembles 1920s’ US: a very patchy social safety net, inadequate legislation and enforcement of laws and regulations, yet at the same time numerous opportunities for those are enterprising and diligent, and the society as a whole boasts an optimistic and upward mindset. If continuing economic gains can be delivered, the poor would be able to afford a relatively decent life and enjoy a social contract with better terms.

    About the demographics. First of all, I’d like to point out the effect of economy of scale applies in demographics too, namely, 100 young supporting 400 old people would be much less a burden than 10 young supporting 40 old folks,if you factor in the costs of infrastructure for health and care,etc. Second, the growth of population can not guarantee an promising economic prospect. In today’s China, raising and put a child through college is a huge investment, neither individual parents nor the society as a whole can afford to raise, let alone a decent education for more than 2 kids.A smaller but better-schooled young generation would serve China much better than a populous but poorly-educated next generation, especially true when China is trying to climb up the food chain,thus the urgent need of a skilled and well-educated labor force. In the foreseeable future, I think the growth of population would continue to be a much bigger headache for China compared to the danger of a shrinking labor pool. Look into India and Africa, you would understand what a nightmare an exploded population growth can be. In a scenario that China runs out of labor, it can ease that by raising the bar of retirement age in the short term and shift its policy on population control, with a denominator of 1.4 billion people, a slight policy swing would generate an extra labor force in tens of millions on short notice.

    About increasing strains on energy and environmental resources. Well, it is not an issue unique to China. Hold your horse there, I am not going to blame it on other countries. Honestly,as an average Chinese citizen, I DO feel quite worried about the environmental perils.
    China surely can secure enough energy and raw materials for its development(China does have plenty of coal to last at least several centuries and money to import raw materials)but at what price?Can the earth afford that? The glaciers within and outside China and the icecaps are melting and accelerating, more and more animals and plants go extinct. It is more scary than sad.

    Frankly I do not reckon China will not altruistically stop its development to save other people’s ass,well, China’s ass included,but I do believe as more and more Chinese are realizing the damning consequence of global warming and prefer to adopt an approach that is more eco-friendly, thus more sustainable and economical in the long term, there is still hope.

    Meanwhile, sincere support from the countries with sophisticated clean technologies and examples on handling environmental issues would make it a much easier sale to China.

    The mother nature would wreak havoc on us sooner or later if we do not switch to
    a greener way of life and development. I sincerely hope all the people,all the nations around the
    world can show unity,courage and vision, at least on this urgent issue.

  11. Nimrod Says:

    jack wrote:

    “Meanwhile, sincere support from the countries with sophisticated clean technologies and examples on handling environmental issues would make it a much easier sale to China.”

    Support from countries with sophisticated technologies, sincere or not, is rather difficult to come by, especially with embargoes on technology transfers and an attitude of strategic competition. Certain countries may not feel like giving up an inch of their living standards and lifestyles even for long-term benefit.

  12. Allen Says:

    Two years ago, when I was at a MIT energy conference, I remember sitting in an exhibit that showed a short movie on the global energy crisis. At the end of the presentation, the audience were shown the result of several surveys.

    One survey asked whether the U.S. gov’t should allow U.S. companies to export advanced green technologies to countries like China (when many of those had been developed with U.S. government grants), in effect subsidizing China’s effort to become more green – some 76% of those polled answered NO.

    It was only one question, I know, but I was nevertheless disappointed.

    Even in areas where we can all clearly have win-win, people are concerned who would come up further ahead as a result of the cooperation…

  13. Daniel Says:

    Mind me asking but what kind of green technologies are we talking about?

    I only have a small exposure to this field, limited to my academic studies, but as far as I know, basically anything related to science and technology that can be made understood or built can be replicated in another place…given they have the tools, organization, etc.
    Are the reasons why people may not like exporting “non-weapon intended” technologies such as these related to patent issues?

    Hey, on another related note…anybody watch the Discovery Channel’s project Earth show(s)?

  14. Allen Says:

    @Daniel regarding kind of green technologies:

    We were talking a host of stuffs – including clean coal power generation, bio fuels, new batteries, architectural designs and hybrid electromotives, etc.

  15. jack Says:

    R&D in new green technologies is indeed costly, thus it is reasonable for the leading countries to make a buck or two out of it. However,considering how much is at stake here, I really hope they would not get too greedy. It can and should be a win-win example.
    It’s time the developed countries bring into practice the high moral ground they boast of on daily basis: human rights, at least the right to survive.

  16. totochi Says:

    @Allen #12

    To the people at the conference, maybe it’s not a clear win-win situation. Fair or not, China has a reputation for not respecting IP rights. A lot of us may consider it a “win” if we can help China find less polluting methods of energy production but for the IP holder, the risk is that a Chinese company will take the technology to make products for profit, without permission or paying royalties. Sure some researchers are not in it to make money but a lot of the research from US government grants are patented and become the seed for start-ups. Do you expect the CEO of First Solar to transfer/give their thin-film solar process to China? What could go wrong?

    China is the largest producer of solar cells. I would like to see solar power replace some of the coal consumption in China but almost all the solar modules go to Europe/Japan. Not sure how to encourage local use of green technology when burning coal is so easy and cheap. Maybe more subsidies from the Chinese government, better IP enforcement, an a little bit of trust will help.

  17. totochi Says:


    I agree in principle. There are some technologies that should be shared for the good of the whole world. An analogy would be cheap AIDS medicine for poor regions in Africa. However, I also can see it would be hard at an individual level. If I spent 20 years researching a technology and had the chance to start a company, go IPO, and make $millions, it would be a struggle to just hand the technology to China/India/developing country and risk losing it all. Just being honest.

  18. B.Smith Says:

    When it comes to a lack a resources, I think China may do better than the States. Americans have become too comfortable with ridiculously cheap energy and goods – we have P. Diddy throwing tantrums about not being able to fuel his private jet, for example. Most Chinese are used to a much more frugal – and efficient – standard of living. Even in Thailand, the Chinese here have the reputation of working hard, living frugally, and becoming rich. That mentality will serve China well in the coming years.

  19. jack Says:

    @ totochi

    About intellectual property. The enforcement of IP-related law in China is patchy indeed. But too often the reality is the fees for patents are way too high for most indigenous enterprises in developing countries to afford. Thus they have two options: stay backward or get it whatever way you can.
    To solve the IP issue both, it would need cooperation and compromise from both sides. For example, it takes more than a month’s salary of an average Chinese worker to buy Windows Vista, thus it simply would not sell.

    Japan and German government heavily subsidizes the use of solar panels: in Japan, the gov pony up
    half the expense. China can not afford that.There are high-level talks about the transfer of clean technology
    at a reasonable price between China and Japan, if that can be done despite the hostility, awkward history and potential competition between the two nations. Any more reluctance from the developed nations can only be seen as short-sightedness ,greediness and hypocrisy.

    If every individual is bent on maximize his or her own benefit no matter what, then the human race is doomed. It entails vision, sacrifice and courage to buck the trend.

  20. perspectivehere Says:

    In addition to technology there is also the question of finance, regulation and negotiation of commercially attractive deals.

    This article from Asiamoney has some interesting perspectives:

    “GREEN FINANCE – Sun setting on foreign investors’ green dream
    Western companies and private equity firms have repeatedly been blown off course in their attempts to access Asia’s lucrative alternative energy industry. Priced out of the market by domestic players in China and at the mercy of domineering property developers in India, they face a tough choice to avoid missing out completely: sell their technology or get into bed with joint-venture partners. Naomi Rovnick reports.”


    I especially liked this passage:

    “Opportunity and reality
    It’s easy to see the appeal of China and India when it comes to green energy investments. They are both growing rapidly and at the same time are becoming aware of the damage that oil and coal production does to the environment.

    China’s aim is to derive 15% of its energy needs from renewable sources by 2020, compared with about 7% today. The government would need to invest US$266 billion in alternative fuels to make up the balance, according to the Royal Society of Chemistry, creating two million jobs.

    Both China and India are choosing wind power as their preferred source of renewable energy. As China has discovered via its Three Gorges Dam scheme, hydroelectric projects are extremely expensive, displace communities and damage ecologies, while solar power needs large sums of investment to raise its efficiency.

    For China, the development of wind power projects has been especially pronounced. A report co-authored in 2006 by the Global Wind Energy Council (GWEC) and Greenpeace found that the country had built 61 wind farms, from Guangdong to Mongolia, which when connected to the electricity grid can collectively produce more than four gigawatts of energy. But foreign investors are not getting a look in.

    According to the report, there were four rounds of bidding for 12 major wind farm projects awarded in China between 2003 and late 2005. State-backed entities won eight of the tenders and privately owned Chinese power firms made up the balance. Western companies were conspicuously absent.

    Part of the explanation for the success of domestic companies is that Beijing does not need western cash. Plus, international builders of wind power projects have realised they have little chance of competing with local companies.

    The reason is simple. China persists in tendering its new wind projects and awarding them to bidders that offer the lowest delivery price per megawatt of energy. But as HSBC energy banker Jonathan Drew explains, the government also demands that local power companies source more of their power from renewable sources. Meeting these quotas is more important for the local firms than making money on the investments, so they have been bidding at levels that more commercially-orientated international corporates can’t match.

    As the report’s authors note, all the winning bidders were “apparently mainly concerned to enter a promising industry, even though profit was not guaranteed”. Raymond Fung, of Babcock & Brown, says he would love to finance Chinese wind farms but admits his institution has never managed to get its hands on such a project.

    “The tendering system has been one main reason,” Fung says. “We cannot make the numbers work when we are competing with public sector players.”

    This passage is interesting for the following reason: The Chinese government demands that local utilities source a high percentage of its power from renewables. But these policies are “too green” for the market to support an attractive commercial return for foreign investors. The local utilities (which are generally only partially privatized) obey government requirements even if the projects are not commercially viable, putting public interest (as articulated by the Chinese government) ahead of corporate profits. In effect, the government is subsidizing green power and making the shareholders of the utilities bear the burden. Because power prices are regulated, the shareholders may suffer from lower profitability.

    Of course, someone can come along and do an elegant microeconomic analysis of how it would be more efficient for the government to get out of the way of the market.

    Someone can also come along and argue that in a democratic system, the people can decide if they want more renewable energy power, and that it is fundamentally wrong for non-elected public officials to make such decisions for the people.

    My question is whether this policy is good or bad from the standpoint of addressing China’s energy and environmental issues.

    What do people on this blog think? I’d be interested in hearing whether people think it is a good or bad policy for China to require local utitlities to source a certain percentage of power from renewables.

    Are there such requirements in other countries?

  21. S.K. Cheung Says:

    Seems to me China has a free-market. So unless the central party mandates it, innovation will be driven by market forces. But as long as energy is subsidized, the perceived market force of inefficient energy consumption will be minimized. And the impetus for innovation will also be suppressed.
    I don’t know about clean coal, waste-to-energy, run of the river hydro. But I don’t think ethanol will fly, not when the net energy consumed and CO2 emitted to produce it exceeds the resultant energy produced or CO2 saved. As for bio-diesel, that’s going to require a heck of a lot of used cooking oil.
    I do wonder about the rich-poor gap. Such a disparity between haves and have-nots can’t engender much stability. And I wonder how much patience the have-nots will have before they tire of waiting for their turn to become upwardly mobile.

  22. Daniel Says:

    That’s interesting to note, B. Smith.

    Come to think of it, living frugally and hard work would be very helpful (In addition to innovation definantly). Some of the things I noticed when I went overseas and coming back home was the impact human activity has on nature. Now, I have heard about the debates regarding this, but I mean even if it was a little effect, it still matters. Some of the argument for more sustainable methods seems to be based on financial reasons. Of course, there’s the whole providing for the future and environmental issues, but it’s a little obvious that a big part of the drive comes from being able to pay for it.

    Not a lot of people, especially in the developed world, would want to let go that easily with such comforts and luxuries. Even some big names, like Al Gore or Richard Branson, talk a lot but look at how they live. For others not so famous or wealthy, nearly every industry that helps maintain such “developed” lifestyles pollutes, directly or indirectly. So, it’s not like we who live in such societies appear to care, it’s just that many of us, especially in the younger generation, were born to that way of life and most likely have to learn to deal with it or change.

    Which reminds me, I think another good area to dwell about regarding sustainable development would be waste management. I have a feeling some in China are looking towards the nuclear format for energy, but we’ll see.

  23. jack Says:

    I think it is largely a good policy for China to require local utilities to source a certain percentage of power from renewable.

    In any capitalist economy, the supreme guideline of enterprises is to maximize its profits.And too often what the executives care most is short-term gains. The much hyped corporate social responsibility is only a facade of conscience to promote themselves. Neither do those corporates have the authority or influence to shift the policy.

    In China, it is still much cheaper to generate electricity with coal plants than with wind farms, thus the utilities have no incentive at all to adopt greener technologies voluntarily. However, when they do invest in wind farms,albeit involuntarily, it is of their interests to improve upon the green technologies to cut costs and increase profits,paving the way to a commercially viable solution. As for those shareholders of those utilities, when they decided to buy those shares, they do know those are state-run utilities. This is a package deal: those utilities are state-owned, enjoying monopoly in the market and likely promising high returns,meanwhile the possible change of energy policy is part of the deal.

  24. Jerry Says:



    I read this article from the NYT. The points are probably valid. Nonetheless, for me, it is a bit too parochial and limited in scope. It is easy for Americans to point fingers at China. China is such a nice, convenient bogeyman.

    Nimrod, your analysis seems pretty detailed. Some of these same issues plague the US, too, like energy use, and equality. Population is not as big an issue. National debt is a huge issue in the US ($9.5 trillion). The savings rate of Americans is abysmal. Both, the US and China have a huge, partially hidden national debt, which is our environmental destruction. By using other countries for our natural resources, we (China and US) have created environmental damage abroad. I intend to discuss that later in this blog topic.

    But now for the global issues. These aren’t just China’s issues or US’s or European issues. For now, I am not going to address global warming. I want to address an issue that does not get the play of global warming, but has serious ramifications for everybody on this planet. I am talking ecological footprint versus the Earth’s biocapacity, the subject of the World Wildlife Fund’s (WWF) report, “Living Planet Report 2006”. I wrote about this at another blog topic at Fool’s Mountain. I am going to repeat it here.

    First, I want to preface my remarks, with a few sentences about wanting a better life. Who can blame the Chinese for wanting to get out of poverty, wanting a better life, nice things, and a better life for their offspring. Pretty normal. Unfortunately, we humans (seemingly all of us) are pretty short-sighted by nature and generally don’t see the long-term costs we are incurring, heading at us like the old trite saying, “Is that light I see at the end of the tunnel? Or is that a freight train headed for us?”

    Ecological footprint versus the Earth’s biocapacity are very abstract terms. Here is the World Wildlife Fund’s (WWF) definition: Ecological Footprint (EF) measures the amount of biologically productive land and water area required to produce the resources an individual, population, or activity consumes and to absorb the waste they generate, given prevailing technology and resource management. The Earth’s biocapacity (BC) is the amount of biologically productive area – cropland, pasture, forest, and fisheries – that is available to meet humanity’s needs. Demand vs. Supply.

    In 1961, Earth’s population was 3.08 billion people. Ecological Footprint (EF) was 4.5 billion global hectares (gha) versus Biocapacity (BC) of 9 billion gha. A 50% surplus of BC. By 2003, the population was 6.3 billion people. Ecological Footprint (EF) was 14.1 billion gha versus Biocapacity (BC) of 11.2 billion gha. EF has overshot BC by 25%. Essentially, what we have is “deficit spending.” On a global basis.

    In 2003, the US, with a population of 294 million, had an EF of 9.6 gha per person and BC of 4.7 gha per person. Japan, with 127 million, had an EF of 4.4 gha per person and BC of 0.7 gha per person. China, with 1.311 billion, had an EF of 1.6 gha per person and BC of 0.5 gha per person.

    In 2008, WWF did a follow-up report on Asia and China. From 1961 to 2003, China, Japan, the EU, and USA showed significant growth in the overshoot of biocapacity.

    Reports and information are out at Global Footprint Network (http://www.footprintnetwork.org/)

    So what does all this mean? It means that the earth can not sustain us at our present rate of consumption. Here is what WWF said in their 2006 report.

    Since the late 1980s, we have been in overshoot – the Ecological Footprint has exceeded the Earth’s biocapacity – as of 2003 by about 25 per cent. Effectively, the Earth’s regenerative capacity can no longer keep up with demand – people are turning resources into waste faster than nature can turn waste back into resources.

    Humanity is no longer living off nature’s interest, but drawing down its capital. This growing pressure on ecosystems is causing habitat destruction or degradation and permanent loss of productivity, threatening both biodiversity and human well-being.

    For how long will this be possible?

    A moderate business-as-usual scenario, based on United Nations projections showing slow, steady growth of economies and populations, suggests that by midcentury, humanity’s demand on nature will be twice the biosphere’s productive capacity. At this level of ecological deficit, exhaustion of ecological assets and large-scale ecosystem collapse become increasingly likely.

    Part of the 25% overshoot on biocapacity may already be showing up in food shortages, global climate change, decrease in fish populations, increases in global pollution, etc.

    A big question: can we all work together to solve global problems like the overshoot of biocapacity? IMHO, the fate of the people, the human species, on this planet are at substantial risk.

  25. perspectivehere Says:

    On the gap between rich and poor, it’s hard to say much that is worthwhile without over-generalizing.

    There was very little income disparity in China 30 years ago — almost everyone was poor and dependent on the State for a living. Is that better or worse than the situation today, where a few hundred families are super-rich, hundreds of millions are middle class and the rest are poor or living at subsistence level?

    While some Chinese may long nostalgically for the simplicity of a less competitive time, when basic needs were met by the State and equality was a high societal priority, the vast majority of Chinese probably prefer the opportunity to achieve a higher standard of living. The cost is pollution, stress, and competition. Breaking the cradle-to-grave iron rice bowl of the SOE system means there will be winners and losers.

    I suspect that over time, China will increasingly be true to its socialist origins and provide a stronger safety net so that the poor and needy and workers are protected. We’ve already seen improvement in the legal treatment of migrant laborers in the urban areas. The latest labor legislation aims to increase legal protection for workers. The image of the “xiaokang shehui” is not about “being the richest in the world” but about making sure everyone has got their basic needs met, plus a little more.

    I like this story of a factory worker, Li Luyuan, excerpted in the FT as “How Li Luyuan became middle-class” http://thechinaprice.blogspot.com/2008/04/excerpt-of-china-price-in-ft.html

    It’s a beguiling portrait of a young woman from the countryside who tries her luck in the city, and captures a bit of the zeitgeist for the ordinary worker in China in the 21st century:

    “When Luyuan arrived in Shenzhen to work two years earlier, she and her friends took the baton in a relay race that began in 18th-century Britain with the industrial revolution. They had edged out the women of Mexico’s maquiladoras and Hong Kong’s housing estates: they were the most affordable and productive workers the world had found, their value to the global supply chain evident in the tens of billions of dollars of foreign investment pouring into China every year. But between interviews, Luyuan was also looking for vacancies in retail. Toy and clothing stores had turned her down on the spot because of her lack of experience. As Meng explained: ‘The places that have good working conditions have pretty tough requirements.’ ”

    “It wasn’t just market forces – higher prices for labour, electricity and land – that were forcing low-end jobs out of the city. The government was doing its part to make sure they left. Just as Luyuan dreamed of climbing out of labour-intensive manufacturing, so too did government officials in Shenzhen – a fishing village in 1980 and the world’s fourth-largest port today – and other cities of the Pearl River Delta. These factory towns were trying to refashion themselves into high-tech, low-pollution, value-added modern metropolises. Along the way, they were pushing out the kinds of jobs on which Luyuan and her friends still depended – and for which they were qualified.”

    Perhaps I like this story because it has a happy ending – it shows how she started out as a mere country girl, spent time in the factory, and now has a nice job selling real estate. Not quite “Working Girl” (http://en.wikipedia.org/wiki/Working_Girl) but Luyuan did start out much lower in the economic scale than Melanie Griffith’s character (from secretary to investment banker).

    Actually, Luyuan’s story is much closer to how Sister Carrie starts off (see http://en.wikipedia.org/wiki/Sister_Carrie for a synopsis, and you can download the entire book here: http://www.gutenberg.org/files/233/233-h/233-h.htm) but with a happier ending – Luyuan does not seem to have (yet) experienced the lurid drama that Sister Carrie went through, although a pretty young girl in the big city no doubt faces many temptations….

    There are interesting perspectives to be drawn from reading Sister Carrie’s portrayal of early 20h century Chicago – the vivid portrait of the nouveau riche and their obsessions with wealth and status symbols. The Hurstwood family conversation around the dinner table (see Chapter IX) could be repeating right now in tables from Shenzhen to Beijing.

    As China is in a similar period of economic development as the U.S. a century ago, it is helpful to compare the common societal tensions that arise in such societies and how they were resolved.

    The dreams of easy wealth in the Gilded Age and Roaring Twenties, captured in novels like Sister Carrie and The Great Gatsby, was soon to be replaced by the failures of the 1929 stock market crash and Great Depression that followed.

    Interestingly, Americans made it through the Depression years not with more freedom but with less. Franklin D. Roosevelt was called a dictator for some of the measures he took, although new research indicates that it fell short of some of the more extreme measures (like dissolving Congress) that his advisors advocated (see http://www.npr.org/templates/story/story.php?storyId=5525748).

    And yet the Americans made it through, and I suspect China will too.

    Today, the U.S. chattering classes that read papers like the New York Times and the Washington Post are far removed from the perspective of (Sister Carrie author) Dreiser’s day. This is why the following article on income inequality, which looks at the looks at how the widening gap between super rich and the middle class resonates much more with their readers:
    “Rich Man’s Burden”

    “One of these forces is America’s income inequality, which has steadily increased since 1969. We typically think of this process as one in which the rich get richer and the poor get poorer. Surely, that should, if anything, make upper income earners able to relax. But it turns out that the growing disparity is really between the middle and the top. If we divided the American population in half, we would find that those in the lower half have been pretty stable over the last few decades in terms of their incomes relative to one another. However, the top half has been stretching out like taffy. In fact, as we move up the ladder the rungs get spaced farther and farther apart.”


    I think this partially explains why the NYT/Washpo press so often questions and denigrates China’s sense of economic achievement. NYT/Washpo readers (I count myself among them) find it hard to identify with the dreams of hundreds of millions of Chinese whose ambition is to leave the countryside to work in a factory or an office somewhere.

    Most of these Americans are at least two or three generations removed from that experience. So they think Chinese are culturally backward and materialistic in gross and vulgar ways for wanting to choose a better life through “dirty” manufacturing and building high rise residential projects. The NYT/Washpo tries to signal their superior sensibilities by making ironic asides about Chinese obsessions with celebration of “dedication of new tractor factories” and “high speed rail lines” to show that they have moved beyond materialism. They lionize characters like the Dalai Lama, because he sells dreams that resonate with their readers. These readers believe a statement like “strive no longer and you will find happiness” but find it hard to believe that anyone can be happy working on an assembly line.

    Americans who understand their own economic history are perhaps humbler about ourselves, and can place the Chinese desire for mere middle class status in the context of China’s transition from an agricultural to an urbanized and industrialized economy, and find paralles to the same desires of our predecessors and forebears.

    We are also comfortable enough with ourselves not to begrudge the Chinese the same pride that we felt when we put up this, the Trenton Makes, The World Takes lights over the Delaware River:


  26. totochi Says:

    @jack #19

    Japan and German government heavily subsidizes the use of solar panels: in Japan, the gov pony up
    half the expense. China can not afford that.

    Really? How much are the subsidies provided by Japan and Germany per year? Didn’t China just spend $40 billion on the Olympics? An article from SCMP in May said that Chinese government officials annually spend RMB300 billion on dining & entertainment, RMB300 billion on vehicle use, and RMB250 billion on government sponsored domestic and overseas tours. I’m pretty sure the Chinese government can afford cleantech subsidies if they wanted. Of course, that would mean less perks and boondoggles for themselves.

  27. RMBWhat Says:

    @Jerry #24

    I think what you mentioned ties back to trans-human/eugenics beliefs. It’s been documented that the elites believes and supports eugenics. They don’t really want to solve our problem (I mean is it really a problem?). My personally beliefs is that they are creating these problems in order to advance their eugenics programs. Wasn’t it reported that one of the main causes of the current food crisis is due to the U.S shifting food production towards bio-fuel production. It is my belief that this ‘crisis’ is just a part of their plan, to eventually reduce world-wide population by 80 to 90 percent.

    I think there is a solution, yes. But do the elites want to solve it? No they do not. They want to become Gods. It’s well documented.

  28. RMBWhat Says:

    I’m not kidding people! This stuff is real. It’s going to get real bad, real soon. Hell, it’s happening now. People are dying around the world (aids, food crisis, wars, increase in cancer, increase in autism, GMO, human-animal hybrids, chem-trails, and soon WMD)… because of their evil machinations!

    I’m here to warn you guys! Look at the facts. Wake up!

  29. jack Says:


    Do you know how much Japanese gov has to fork to subsidize an average family solar panel? 500,000 yen. That equals $4716. China has a population of 1.4bn today,that is at least 200 million households. In theory China would need $940bn to subsidize them all. There is another catch, how many of those families would pay the other half by themselves?

    I can clearly see you do have a beef with Beijing’s Olympic game.Of the $40bn expenditure, only $2.2bn is directly Olympic game-related. The other $37bn has been spent on the improvement of Beijing’s infrastructure and environment. which will have a lasting positive effect. I can not say all the money is wisely spent, but it definitely hasn’t been wasted as you insinuated.

    Corruption is rampant in China, we all know that. When you talk about the scale of corruption, why don’t you convert the data in Dollar terms? RMB300 billion does look much more impressive than $43bn,does it? Would you find the numbers for USA or other OECD members in SCMP database or reports?

  30. Jerry Says:



    I don’t know China anywhere near as well as you. I do know that I keep hearing/seeing doomsday scenarios in the Western mainstream media very frequently. Personally, I don’t believe doomsday scenarios; I view most of them as hysteria-inducing and designed to control the listener/viewer/reader. They play to our worst fears.

    Nonetheless, there are problems which we need to address. We need to be aware of the problems. We also need to step back and reflect. One of my mottos is, “If we are going to panic, let’s panic early when we have time to do something constructive.”



    I revisited your comments about:

    There is a big long-term social contract in China that certain people would like to forget, where some people/some regions got to get rich first to get things rolling, but then they were supposed to get taxed heavily to subsidize the development of the rest of the country. We’re seeing that now imposed top-down through long-term planning, but if we allowed open voting and instant “democracy” at the national level, China (just considering the neidi parts) would not only split along regional lines but exactly into this kind of populist-rural vs. elite-urban political in-fighting and gridlock that have prevented the likes of Mexico from escaping the middle-income trap.

    I just pray you are right. Somehow, the rich and powerful find ways to take control of governments. This is where they will craft a “democracy” which looks very appealing to the masses. The promise and hope of the “Chinese” dream look very appealing and you get to vote, too. It is only a cover for the super-wealthy and the powerful. This happened in the US.

    People who are rich and powerful seem to develop this “love of money and power” which takes over their lives. They become greedy and want more and more. Fortunately, there are exceptions who seem to learn from their mistakes. I can cite John Gray of Omark Industries in Portland, Oregon, Ted Turner of CNN fame, and Andrew Carnegie, of US Steel fame. All 3 of these men made lots of mistakes, had monster egos, and were at times very greedy and ruthless. Nonetheless, events occurred in their lives which woke them up.

    “There is a big long-term social contract in China that certain people would like to forget”: Let us not forget it. I would like to see that contract stay in effect. The US’s social safety net has been shredded. Forces in Europe are trying to shred their social safety net. Europeans are resisting much more than the Americans.

  31. Daniel Says:

    Hey guys,

    What is the social safety net in Europe? I’m not quite familiar with it, or probably I overlooked it from my studies (which should be understandable since many of us had to learn something regarding Europe in our compulsory education).

    I was thinking about whether they have some type of alliances special relationships based on the biocapcity and ecological footprint that Jerry is talking about. That’s a little scary to imagine about for the future because it appears that the competition for resources will get intense enough for conflict to happen. I think.

  32. Wukailong Says:

    @wuming (#6): Sorry, missed your comment. Where I come from, men and women retire at the age of 65 like. In China, I’ve heard that many employees, especially state employees, retire at the age of 55. Working 10 years more wouldn’t be too much of a problem, would it? 🙂

  33. Jerry Says:



    Thanks for the question. I use social safety net and social contracts interchangeably. I actually misuse the term (kind of shorthand) to talk about what the state is doing for good of the “public”. Jean-Jacques Rousseau and John Locke, two Reformation philosophers, wrote about social contracts. In fact Rousseau’s work was called, “The Social Contract”. Basically, people give up their natural rights under a civilized government, of which they are sovereign; the people rule. They are given civil rights, responsibilities and laws, both negative and positive. In France, for example, there are high taxes and lots of government programs. Medical treatment is free or subsidized. Mass transit is subsidized. There is an extensive unemployment program. Primary and secondary education is provided for free; public universities are subsidized and have very low fees. There are free libraries because it is considered part of education. There is a social welfare program to help the poor live and help them escape poverty. There are numerous state holidays. Work hours are regulated. There may be more and the ones that exist may be changing.

    In the US, much of the social safety net has been dismantled in favor of laissez-faire individualism. People in the US generally don’t see their social connections and responsibilities. Too bad.

    Yes, scarcity of basic resources has some exceptionally scary potential repercussions. That is why I wrote:

    A big question: can we all work together to solve global problems like the overshoot of biocapacity? IMHO, the fate of the people, the human species, on this planet are at substantial risk.

    The alternative to all of us working together could be downright ugly.

  34. Daniel Says:

    Oh I see what you mean Jerry,

    In a way, this laissez-faire attitude in the US is, well…there are both pros and cons. Maybe because it’s a lot bigger place than the other countries, so probably the social contract may be appropriate for more local, particular regions/areas.

    On the other topic, I think if we were to work together, we probably need to start off with closer neighbors. For example, in the case of the US, a joint network throughout the continent of Canada and Mexico plus the caribbean. In China, probably a network working together to tackle these issues with Japan, the Koreas, their Southeast Asian and Central Asian neighbors…Russia, etc. Eventually, they’ll need to work with others around the globe, but like others have mentioned, we’re all in this together (like an enternal marriage or family situation…all in one big house, in that context).

    Man, that’s a short working age, 55 versus 65 ( or 67). I remember a lady from HK told me the same thing. There were many people with plenty of energy to be productive and contribute in their 50s and 60s (and 70s). Actually, she told me that this was one of their bigger reasons to immigrate and move their families to other countries as well. I hate to be stupid in asking this, but is this sort of like the creepy “lottery pick” experiment, where the old needs to go away to make room for the new?

  35. totochi Says:

    @jack #29

    Chill out. Has Japan subsidized every household? If not, then your $940 billion figure is crap. I have nothing against the Olympics so don’t put words in my mouth. The government makes choices. It’s fine that they spent money on infrastructure but it’s a choice. If they only had $40 billion and they build stadiums, that’s fine… but don’t cry that there’s no money for greentech. As for the currency conversion, the article has numbers in RMB so I left it. Should we convert everything to US dollars? Then you will be complaining that we’re too US-centric.

    “When you talk about the scale of corruption, why don’t you convert the data in Dollar terms? RMB300 billion does look much more impressive than $43bn,does it? Would you find the numbers for USA or other OECD members in SCMP database or reports?”

    Why the personal attack? If you can’t deal with two currencies in the same paragraph, that’s your problem. Stop implying bad faith in other people. Also, what do you guys ALWAYS bring up the US or Western countries in your arguments? Can’t stay on topic? My point was that the government spends a lot of money on stuff. If the CCP decides that greentech is important, then it can try to reduce spending elsewhere. Yes, there is government waste in the US but I’m not the one advocating shaming other countries in handing over cleantech. If you still want to make the “well, the US is bad too” argument, then go find your own data.

  36. Wahaha Says:


    “50 steps” laughs at “100 steps” (if any one know better translation, I will appreciate.)

    The story is that in a war, two soldiers were cowards, one of them fleed first, then the other fleed later when the first one had run 50 steps. When the second coward run 50 steps, he laughed at the cowardiness of the first one cuz the first one had run 100 steps.

    Chinese dont accuse or criticize others unless he himself is almost “perfect”, especially dont criticize others for the mistakes he himself made before. The criticisms from the people who make the same mistakes sound arrogant and shameless.

  37. Netizen K Says:

    Half-bottle laughs at full-bottle?

  38. TonyP4 Says:

    how about corruption?

  39. Allen Says:


    I suppose corruption by itself is not really an issue per se – except when it impacts social inequity and the environment – which it does!

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