Brave Citizen of China questioning his country's stimulus package

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xraymike79's picture
xraymike79
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Joined: Aug 24 2008
Posts: 2040
Brave Citizen of China questioning his country's stimulus package

A message from the leading pro-democracy Chinese dissident Bao Tong:

(3-3-2009)

"The duty of a government is to maintain social justice and to be
fair to all legal enterprises and all work forces according to the law.
I plead with the NPC to order all levels of state administration to
continue to protect (labor-intensive) village and township enterprises
and to do their very best to help rural migrant workers who have lost
their jobs; significantly reduce the amount of funds directly
controlled by state administrations (especially funds allocated to
Communist Party administrations), so that these resources can be
channeled to consumption funds, especially rural. The goal is to end
the abnormal situation of “rich state vs. poor people” and the huge
income gap between urban and rural areas. Only if an effort is made
towards reaching this goal can China materialize the much desired
domestic market. If 800 million rural residents are without decent
purchasing power, there will be no significant domestic market. Without
elevating the income levels of rural residents or rural migrant
workers, that is, the purchasing power of the largest sector of
society; the so-called policy of “stimulating the domestic market” will
surely be misguided."

****If 800 million rural residents are without decent purchasing
power, there will be no significant domestic (Chinese) market.****

"Without migrant workers and the labor-intensive industries in
townships and villages, China would not be where it is today. It would
be suicidal to [make policies to] discriminate against them."

The Chinese populace is deeply concerned about the four trillion
yuan designated as an economic stimulant. Four trillion yuan are the
savings of the entire people, an average of 3,000 yuan for each of
China’s 1.3 billion people. For millionaires, it is a drop in the
ocean, but for the millions of poor, it means surviving for a year.

So will this huge sum be used improperly? Will it aggravate various
social problems? For example, will it stimulate even more lavish
spending by some Communist Party administrators, or more corruption on
the part of some officials, or more substandard construction
projects[2], thereby harming the nation and the people? Will it worsen
the growing urban/rural income gap or worsen the already decreasing
ratio of labor income versus GDP? Or will it stimulate a new surge of
environmental pollution and destruction of natural resources?"
----------------------...

"(1) Social distribution and social welfare is serious tilted in favour of Government civil servants

From 2003 until 2008, government revenue accounted for one-fifth to
one-fourth of total GDP. Of this huge revenue, 58 percent was used to
support about 70 million functionaries in party and government organs.
With wage growth lagging far behind the growth rate of GDP, pay for
public officials nationwide (excluding regional pay) was increased a
total of 3 times since 2001, with no increase less than 15 percent. The
groups mainly covered so far in the system of guaranteed pension,
health care and other social benefits enjoyed in China have been Party
and government functionaries. Medical and health resources, for
example, are characteristically tilted in favour of cadres as a group,
for example the "grading system" in the drug supply, the higher and
better political status, social status hierarchy, of the group
participating in medical insurance higher the level of the quality of
medical services, medicine supplies, etc. According to official Chinese
figures, 80 percent of Chinese government investment in medical
expenses is for a group of 8.5 million mainly (high level) party and
government cadres.

The wages of the numerically vast group of base-level workers,
however grow very slowly, or fail to grow at all; major social welfare
segments in the social security system such as medical and pension
insurance etc., have virtually no connection with the bottom of
society.

(2) Enormous wealth is concentrated in a handful of rich and powerful families

The focus of the limited anti-corruption in China is among the
lower-level officials; political high-levels seem to be insulated from
corruption.

Although rumors about the secrets of success of the children of
high-ranking cadres have been circulating in China and overseas, they
cannot be confirmed, and such people have never been included in the
Hurun rich list.

However, there are two sets of data that suffice to demonstrate how
the red aristocracy leaped from the "proletariat" to the super-rich
list in a mere 30 years.

Some data indicate the astonishing concentration of wealth in
China. The World Wealth Report 2006, released by America's Boston
Consulting Group, shows that 1.5 million families in China (about 0.4
percent of the national total) share 70 percent of its total wealth-and
this is only bank deposits, shares and other public financial assets,
excluding gray income-while in developed countries, under normal
circumstances 5 percent of households own 50-60 percent of the wealth.

Further data deal with the kind of people who hold this
concentrated wealth. According to data reported in a joint
investigation by the State Council Research Office, the Research Office
of the Central Party School, the Central Propaganda Department Research
Center, Chinese Academy of Social Sciences and other agencies, as of
the end of March 2008, 27,310 people in the PRC privately owned
property (not including offshore or foreign property) in excess of 50
million rmb, and 3,220 people owned in excess of 100 million yuan.
2,932 of the wealthy in excess of 100 million rmb are children of
senior cadres, whose [total] assets exceed 20,450 billion. And checking
the source of their assets, it was mainly derived relying on their
parents' power capital.

[3] Trend to self-interest shown in the distribution of political power and inheritance of social status

In China's political marketplace, trade in power, that "scarce
good," has always taken place in a black box. The facts show that
children of senior officials have priority in the inheritance of power.
Even if some of them don't take up key posts, due to lack of ability or
some such, they at least enjoy political titles like Delegate to the
National Peoples Congress. the Chinese Peoples Political Consultative
Commission, etc.

In China, the deep-rooted interest relations between officials
gives cadres' children distinct advantages in succeeding to power. The
official study also shows that cadres' children enjoy over twice as
many chances of becoming cadres as those of ordinary people. The
advantages of cadres' children in the transmission of social status is
also reflected in employment issues. A Peking University team
investigating "The Expanding Scale of Higher Education and Graduate
Employment" found that, through relationships and power, parents can
directly determine their children's employment; the better the family
background, the higher rate of getting a job on graduation, as well as
the amount of starting salary.

This shows, not only that children's higher education outcomes vary
according to sector, but more importantly, indicates that China's
social mobility is closed like the hereditary status of pre-modern
society.

This is tantamount to blockage of the channels for the elites at
the bottom of society to rise, despite the quality of the ruling elite
group being weakened, and despite the great harm is to social
stability."

 

Bao Tong is presently under house arrest

http://www.time.com/time/printout/0,8816,1874164,00.html

 

bearing01's picture
bearing01
Status: Silver Member (Offline)
Joined: Sep 8 2008
Posts: 153
Re: Brave Citizen of China questioning his country's ...

I didn't read all your writing.

China bailing out or stimulating its economy is very different than US stimulation its economy.  China has savings and wealth. USA has debt, no savings, and relies on printing money or other countries to lend us their savings.

China is stimulating to build infrastructure like bridges, roads, power plants, and other structures that will support and make possible the next industrial boom in China.  USA is using its borrowed money to stimulate to create museums, dog parks, All Terrain Vechicle courses, welfare for rich Wall-Street bankers, and other things that will not contribute to future productivity.  

China has been investing worldwide in commodities to secure energy or metals for the next productive boom of China.  USA has been creating carbon taxes and other royalty taxes on its mining sector and energy sector to hamper and reduce future availability of these resources for Americans.  This green energy movement for Americans  may be considered necessary for long term prosperity, but it will come as a very expensive tax for Americans in the way of much higher energy prices.

What your government needs to do is to stop lending money to the American Government.  Stop printing Yuan to buy US treasury bonds.  It needs to find a way to spend its US dollars before they're worth less, using them to invest in China to help the Chinese.  It needs to stop printing Yuan to buy US debt in order to let the Yuan to strengthen against the US dollar.  This will make Chinese exports more expensive for Americans, but commodities and goods produced in China will be more affordable to Chinese.  You will be able to afford more of the wealth that you have been creating and giving to the Americans, who by the way, have absolutely no means to repay you.

xraymike79's picture
xraymike79
Status: Diamond Member (Offline)
Joined: Aug 24 2008
Posts: 2040
Re: Brave Citizen of China questioning his country's ...

You need to read the whole post to understand it. And you need to read more about China, its environment, how and why the trade imbalance occured. Your response doesn't really make sense if you understand the big picture.

caroline_culbert's picture
caroline_culbert
Status: Platinum Member (Offline)
Joined: Oct 2 2008
Posts: 624
Re: Brave Citizen of China questioning his country's ...

"Re: Brave Citizen of China questioning his country's ..."

They're smart....or....they're part of the plan.

 

 

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