>>>>>>>>>>>Holy Crap!! Is this really true?
>>>>>>>>>>>
>>>>>>>>>>>(1)
>>>>>>>>>>>"It is not a secret anymore that 250 million Chinese people live on
>>>>>>>>>>>less than $1 per day. Another 700 million or 47 percent of the
>>>>>>>>>>>population, live on less than $2 a day. The work conditions of Chinese
>>>>>>>>>>>laborers - the people who provide the world with every affordable
>>>>>>>>>>>consumer products from T-shirts and bras to home appliances and
>>>>>>>>>>>computers - are far from pleasant. They often work between 60 to 70
>>>>>>>>>>>hours weekly."
>>>>>>>>>>>
>>>>>>>>>>>Oh, so that's how *they* do it. No wonder Chinese products are so
>>>>>>>>>>>cheap!!
>>>>>>>>>>>
>>>>>>>>>>>(2)
>>>>>>>>>>>"Overall urban and rural unemployment rate in China is estimated at
>>>>>>>>>>>approximately 30 percent."
>>>>>>>>>>>
>>>>>>>>>>>Whoa.
>>>>>>>>>>>
>>>>>>>>>>>I'm no bleeding heart human rights advocate as anyone knows, and am
>>>>>>>>>>>certainly no leftist, but I find these stats pretty appalling even by
>>>>>>>>>>>my 'callous' standards. And no, I don't care about Gini coefficients,
>>>>>>>>>>>or pretend to be the advocate for the poor, or this nation-state thing
>>>>>>>>>>>which must be tearing the heart of some idealistic Western libs out!!
>>>>>>>>>>>
>>>>>>>>>>>Phew!! After reading this I should be more Confucian (excuse me,
>>>>>>>>>>>rst0wxyz). RAK bows, geez, thank you mom and dad. Thank you for not
>>>>>>>>>>>having me born in mainland China or having me grow up there. I promise
>>>>>>>>>>>you I won't drag & drift my bimmer dangerously again........
>>>>>>>>>>>
>>>>>>>>>>>===========
>>>>>>>>>>>Article: China, the WTO and Globalization: Looking beyond growth
>>>>>>>>>>>figures
>>>>>>>>>>>Feburary, 2006
>>>>>>>>>>>
http://www.nadir.org/nadir/initiativ/agp/free/wto/news/2006/0128wto_china.html
>>>>>>>>>>>and mirror link
>>>>>>>>>>>
http://yaleglobal.yale.edu/display.article?id=6929
>>>>>>>>>>>
>>>>>>>>>>>China, the WTO and Globalization: Looking beyond growth figures
>>>>>>>>>>>By Dorothy Guerrero*
>>>>>>>>>>>
>>>>>>>>>>>BEIJING'S pre-Christmas announcement of its readjusted 2004 gross
>>>>>>>>>>>domestic product (GDP) made an international stir and sent economists
>>>>>>>>>>>scampering to their calculating tables so they can revise their
>>>>>>>>>>>predictions concerning when China may overtake the US as the world's
>>>>>>>>>>>biggest economy. There is a 17 percent difference between the Chinese
>>>>>>>>>>>government's previous report about its gross national income of $1.65
>>>>>>>>>>>trillion and the recomputed figure, which amounted to $2 trillion. The
>>>>>>>>>>>new calculation carries a significant implication: it means that China
>>>>>>>>>>>is a much bigger economy than we thought. It means that it already
>>>>>>>>>>>climbed to the fourth slot in the world's ranking of largest economy
>>>>>>>>>>>all this time, which are two notches higher from previous position of
>>>>>>>>>>>number six.
>>>>>>>>>>>
>>>>>>>>>>>There is no doubt that this advance in the pack is impressive. Official
>>>>>>>>>>>statistics illustrate two decades of very strong annual growth rate of
>>>>>>>>>>>real GDP, which has averaged around 9.2 percent. Since 2001 it is the
>>>>>>>>>>>world's number two in purchasing power parity (PPP). Many countries
>>>>>>>>>>>envy its record of economic progress. However, this record-growth
>>>>>>>>>>>produces a big misconception that it is a big winner of globalization.
>>>>>>>>>>>Although there is truth to the claim that on-going market reforms and
>>>>>>>>>>>China's opening to the global economy gave millions of Chinese people
>>>>>>>>>>>an increased standard of living, many new and critical documents are
>>>>>>>>>>>also arguing that there are more Chinese people that are suffering
>>>>>>>>>>>because of its rapid transition to market-based economy.
>>>>>>>>>>>
>>>>>>>>>>>For the majority of the Chinese people the more meaningful and
>>>>>>>>>>>important question is not "when will China become the world's number
>>>>>>>>>>>one?" Rather, they are asking, "When will the benefits of China's rise
>>>>>>>>>>>to superpower status start to affect our lives positively?" True
>>>>>>>>>>>enough, being number one - as in the case of the US for a long time -
>>>>>>>>>>>does not necessarily guarantee an end to poverty for marginalized
>>>>>>>>>>>people and the likelihood of better opportunities and access to
>>>>>>>>>>>resources. New studies on the relationship between poverty reduction
>>>>>>>>>>>and inequality show that there is no necessary connection between free
>>>>>>>>>>>trade and poverty reduction. (1) In fact, a close study of China's case
>>>>>>>>>>>as a catch-up economy since reform started in 1978 shows that greater
>>>>>>>>>>>openness to external trade was not the driving force behind its
>>>>>>>>>>>success.
>>>>>>>>>>>
>>>>>>>>>>>In the recent 6th World Trade Organization Ministerial Conference in
>>>>>>>>>>>Hong Kong, which was held from December 13 to 18, the spotlight was on
>>>>>>>>>>>China. Its economic performance after WTO accession is probably one of
>>>>>>>>>>>the most highly watched developments since it will support or smash
>>>>>>>>>>>notions about free trade and economic liberalization as necessary
>>>>>>>>>>>preconditions for economic development. Although China displayed a
>>>>>>>>>>>not-so energetic host posture and is still finishing its transition
>>>>>>>>>>>stage that will end in 2013, its fulfillment of its WTO obligations
>>>>>>>>>>>concerns many.
>>>>>>>>>>>CHINA'S ACCESSION TO THE WTO
>>>>>>>>>>>
>>>>>>>>>>>China joined the WTO in December 2001. Since then, it amended more than
>>>>>>>>>>>2,500 of its national laws and regulations and abolished more than 800
>>>>>>>>>>>others to fulfill WTO rules. (2) Until now, there is no accurate
>>>>>>>>>>>general calculation about the implications of these changes on people's
>>>>>>>>>>>livelihood. Some of the estimated negative impacts are minimal or
>>>>>>>>>>>negative employment growth in the sectors such as agriculture,
>>>>>>>>>>>automobiles, machinery and instruments. On the other hand employment
>>>>>>>>>>>gain occurred in industries such as plant-based fibers, livestock and
>>>>>>>>>>>meat, clothing, light manufacturing and electronics. (3) What is clear,
>>>>>>>>>>>however, is that membership to the multilateral trade body further
>>>>>>>>>>>deepened the Chinese economy's dependency on external trade and foreign
>>>>>>>>>>>investment.
>>>>>>>>>>>
>>>>>>>>>>>Prior to its integration into the international trade regime, WTO
>>>>>>>>>>>supporters within the Chinese government argued that accession would
>>>>>>>>>>>help China further expand its market, accelerate the restructuring of
>>>>>>>>>>>its industries and improve its legal system. The Chinese Ministry of
>>>>>>>>>>>Commerce report in the second quarter of 2005 shows that the total
>>>>>>>>>>>volume of international trade in 2004 has exceeded one trillion US
>>>>>>>>>>>dollars and that China is now the third biggest trader worldwide. The
>>>>>>>>>>>report also shows that foreign investment reached US$53.51 billion that
>>>>>>>>>>>year while the estimate for 2005 is that it will exceed US$60 billion.
>>>>>>>>>>>The fourth quarter report for 2005 shows that four hundred and fifty of
>>>>>>>>>>>the world's top 500 companies have invested in China. (4)
>>>>>>>>>>>
>>>>>>>>>>>China became the favorite destination of foreign direct investments
>>>>>>>>>>>(FDI) because of the attractive benefits it offers. China has a very
>>>>>>>>>>>friendly business environment that includes adjusted tax rates for FDI,
>>>>>>>>>>>which is half the rate that state-owned enterprises normally pay. It
>>>>>>>>>>>gives good conditions for guaranteed profits for transnational
>>>>>>>>>>>corporations (TNCs) such as low rent, cheap natural resources and lax
>>>>>>>>>>>rules for its exploitation, low wages for workers, absence of
>>>>>>>>>>>independent trade unions, no-strike laws and many others.
>>>>>>>>>>>
>>>>>>>>>>>The international business community was happy to note during the WTO
>>>>>>>>>>>ministerial in Hong Kong that Beijing complied well with its
>>>>>>>>>>>commitments to the WTO. China cut its overall agricultural tariffs from
>>>>>>>>>>>54 percent in 2001 to 15.3 percent in 2005 and this will be further
>>>>>>>>>>>reduced to 15.2 percent in 2006. No single member has made such a huge
>>>>>>>>>>>cut in such a short period of time in the WTO history. The average
>>>>>>>>>>>agricultural tariff worldwide is now 62 per cent.
>>>>>>>>>>>
>>>>>>>>>>>The future of the agricultural sector was one of the most important
>>>>>>>>>>>concerns during the talks in Hong Kong. The dominant view among
>>>>>>>>>>>economists within China is that agriculture is comparatively
>>>>>>>>>>>unimportant relative to other promising and more beneficial sectors
>>>>>>>>>>>since China is not a major exporter of agricultural products. The
>>>>>>>>>>>agricultural sector only contributes 15 percent to China's GDP.
>>>>>>>>>>>However, the number of people that depends on agriculture for survival
>>>>>>>>>>>and development is still huge.
>>>>>>>>>>>
>>>>>>>>>>>Huge adjustments were also made on import tariffs, financial services
>>>>>>>>>>>and government procurement. Import tariffs for 2005 were cut to an
>>>>>>>>>>>average of 9.4 percent from 15.3 percent in early 2001. Tariffs on
>>>>>>>>>>>information-technology products, including computers and
>>>>>>>>>>>telecommunications gear, have fallen to zero from 13.3 percent over the
>>>>>>>>>>>same period. (5) Since December 2004, foreign banks were allowed local
>>>>>>>>>>>currency operations in 18 Chinese cities.
>>>>>>>>>>>
>>>>>>>>>>>Beijing agreed to begin talks on joining the WTO Government Procurement
>>>>>>>>>>>Agreement during the second half of 2005. When such agreement is fully
>>>>>>>>>>>reached, it will grant foreign companies nondiscriminatory access to
>>>>>>>>>>>government purchases. At the moment, Chinese government agencies are
>>>>>>>>>>>required to purchase equipment and technology only from Chinese-owned
>>>>>>>>>>>companies unless there is no existing commercially viable alternative.
>>>>>>>>>>>BEHIND THE STATISTICS
>>>>>>>>>>>
>>>>>>>>>>>It is not a secret anymore that 250 million Chinese people live on less
>>>>>>>>>>>than $1 per day. Another 700 million or 47 percent of the population,
>>>>>>>>>>>live on less than $2 a day. The work conditions of Chinese laborers -
>>>>>>>>>>>the people who provide the world with every affordable consumer
>>>>>>>>>>>products from T-shirts and bras to home appliances and computers - are
>>>>>>>>>>>far from pleasant. They often work between 60 to 70 hours weekly.
>>>>>>>>>>>
>>>>>>>>>>>In sparkling modern cities like Shenzhen in Guangdong province,
>>>>>>>>>>>modernity has two sides: one is the US-educated corporate executives
>>>>>>>>>>>and technical experts who work in impressive high-rises, the other is
>>>>>>>>>>>the millions who sweat in mindless, repetitive factory work in the
>>>>>>>>>>>"special economic zones". Those who belong to the second category
>>>>>>>>>>>receive as little as $100 per month. Most complain about the tasteless
>>>>>>>>>>>food in their cafeterias and cramped dormitories where 10 to 20 workers
>>>>>>>>>>>share a small room. The majority of them are migrant workers from rural
>>>>>>>>>>>areas who lack access to many basic social benefits, have few
>>>>>>>>>>>possibilities for upward mobility and have no security of employment.
>>>>>>>>>>>This vast "floating population" is driven to the cities by the hopeless
>>>>>>>>>>>situations in their villages and the increasing gap between life in the
>>>>>>>>>>>cities and the countryside.
>>>>>>>>>>>
>>>>>>>>>>>Economic growth has been uneven and unfair to those in the agricultural
>>>>>>>>>>>sectors. Agricultural wages are stagnant despite China's phenomenal
>>>>>>>>>>>economic rise. Unemployment in the rural areas is now in an alarming
>>>>>>>>>>>state - the government estimate is that the unemployed and
>>>>>>>>>>>underemployed rural labor now number around 100-120 million. (6)
>>>>>>>>>>>
>>>>>>>>>>>The pattern of migration to urban areas is comparable to Japan's
>>>>>>>>>>>experience during the period of post-war industrialization. In 1947,
>>>>>>>>>>>700 million people or 50 percent of Japan's workforce used to be
>>>>>>>>>>>involved in agriculture. This was reduced to less than three percent by
>>>>>>>>>>>2002. (7) China's case is more rapid and more dramatic, entailing
>>>>>>>>>>>bigger demands for adjustments and posing bigger problems to the
>>>>>>>>>>>expanding cities than Japan. Three hundred million Chinese are expected
>>>>>>>>>>>to migrate from the rural areas into the cities before 2020. This is
>>>>>>>>>>>one of the largest migrations in human history.
>>>>>>>>>>>
>>>>>>>>>>>China's problems about its "surplus labor" present many daunting
>>>>>>>>>>>challenges as it transforms itself into a knowledge and service-based
>>>>>>>>>>>economy. It is not easy to create productive employment for its 744
>>>>>>>>>>>million-strong labor force. China needs to create 300 million new jobs
>>>>>>>>>>>within the next decade to absorb or re-employ those who lost their jobs
>>>>>>>>>>>in the agricultural sector as well as former state-owned enterprises
>>>>>>>>>>>(SOEs) and provide work for the new members of the labor force. (8)
>>>>>>>>>>>
>>>>>>>>>>>The lack of jobs and poor conditions in the rural areas are bound to
>>>>>>>>>>>result in the loss of the already limited agricultural land to
>>>>>>>>>>>development as well as diminished income because of excessive taxation.
>>>>>>>>>>>The central government is saying that some policy measures to improve
>>>>>>>>>>>the situation in the country side are starting to be implemented and
>>>>>>>>>>>are in fact generating positive results. However, the general
>>>>>>>>>>>development in the rural areas is still lagging behind the urban areas
>>>>>>>>>>>by ten years. The state of the environment is also deteriorating and
>>>>>>>>>>>this is increasingly affecting people's health and livelihoods.
>>>>>>>>>>>Protests and rioting triggered by generally felt injustice and
>>>>>>>>>>>environmental problems are now an almost daily occurrence in the
>>>>>>>>>>>countryside.
>>>>>>>>>>>
>>>>>>>>>>>A recent World Bank study notes that China's farmers were already
>>>>>>>>>>>suffering declining income in the years before WTO entry. But the
>>>>>>>>>>>linking of China's fortunes to foreign markets has aggravated the
>>>>>>>>>>>trend, particularly as China removes tariffs that once protected local
>>>>>>>>>>>farmers from imports.
>>>>>>>>>>>
>>>>>>>>>>>reduced by 40 percent (46 million), while workers in collectively owned
>>>>>>>>>>>urban enterprises decreased by 60 percent (18.6 million). Laid-off
>>>>>>>>>>>state workers (registered) are around 34 million. Many of these
>>>>>>>>>>>laid-off workers only received partial payment when their SOEs closed
>>>>>>>>>>>down. At the local level, problems are now arising due to the uncertain
>>>>>>>>>>>future of 23 million town and village enterprises (TVEs), which employ
>>>>>>>>>>>around 135 million people. The TVEs, which served as the driving force
>>>>>>>>>>>of the local economy in the 1980s, are now saddled with rising costs
>>>>>>>>>>>and competition from foreign firms. Overall urban and rural
>>>>>>>>>>>unemployment rate in China is estimated at approximately 30 percent.
>>>>>>>>>>>
>>>>>>>>>>>China's courtship of foreign investment dramatically affected SOEs.
>>>>>>>>>>>According to Hart-Landsberg and Burkett in their book "China and
>>>>>>>>>>>Socialism" (9) the loss of profitability of state enterprises is
>>>>>>>>>>>connected with the increased reliance to foreign investors. Since state
>>>>>>>>>>>enterprises pay relatively high taxes (compared to foreign investors)
>>>>>>>>>>>as well as employment, investment and employee-welfare responsibilities
>>>>>>>>>>>(pension, housing, health care) they became increasingly uncompetitive
>>>>>>>>>>>compared to private enterprises. The decrease in the SOEs
>>>>>>>>>>>profitability, coupled with management problems as well as corruption,
>>>>>>>>>>>resulted to their indebtedness. As their overdue debts increased in
>>>>>>>>>>>volume, the government opted to privatise them as a way to unload the
>>>>>>>>>>>government burden. Privatisation encouraged greater dependency on
>>>>>>>>>>>foreign investors, who started purchasing the ailing state enterprises.
>>>>>>>>>>>The state enterprises' share of industrial output fell from 64 percent
>>>>>>>>>>>in 1995 to 30 percent in 2002. The SOEs are now operating at a loss of
>>>>>>>>>>>about one percent of GDP each year. (10)
>>>>>>>>>>>
>>>>>>>>>>>Exports took a leading role and to continue the rapid growth, the
>>>>>>>>>>>economy relied more and more on foreign enterprises especially in
>>>>>>>>>>>high-tech industries. The increasing centrality of exports and foreign
>>>>>>>>>>>investments rationalized the economy's dependency to global trade and
>>>>>>>>>>>investment agreements and, above all, the WTO.
>>>>>>>>>>>
>>>>>>>>>>>China's rapid growth was indeed achieved with many social and
>>>>>>>>>>>environmental trade-offs. It now symbolizes the many wrongs that come
>>>>>>>>>>>with corporate-driven form of economic globalization. Privatization and
>>>>>>>>>>>the increasing power of local elites and foreign enterprises in China
>>>>>>>>>>>are magnifying the already huge division between the winners and losers
>>>>>>>>>>>of such growth. The UNDP's Human Development Report for 2005
>>>>>>>>>>>illustrated an alarming increase in the country's income disparity.
>>>>>>>>>>>China's Gini coefficient (a measure of equality/inequality: 0 means
>>>>>>>>>>>everyone has the same income; 1 means one person has all the income)
>>>>>>>>>>>hit 0.465 in 2004, and it is estimated to approach up to 0.47 in 2005.
>>>>>>>>>>>(11)
>>>>>>>>>>>LEADERSHIP OF THE DEVELOPING COUNTRIES?
>>>>>>>>>>>
>>>>>>>>>>>While China's rise is giving expectations that it will become the "new
>>>>>>>>>>>empire", the world's fastest and largest developing country seems to
>>>>>>>>>>>harbor no intention of establishing itself as the advocate of the
>>>>>>>>>>>world's poor. The other big players, India and Brazil, have shown more
>>>>>>>>>>>interest in playing that role. During the process of negotiations prior
>>>>>>>>>>>to the Hong Kong WTO meeting, China did not put any important proposals
>>>>>>>>>>>on the table.
>>>>>>>>>>>
>>>>>>>>>>>China's entry to the WTO probably extended the level of transparency in
>>>>>>>>>>>China on issues that are of prime interest to corporations, which
>>>>>>>>>>>includes contracts, regulation of foreign investments, intellectual
>>>>>>>>>>>property rights and other concerns. However, the full exercise of
>>>>>>>>>>>corporate responsibility within China is still far from ideal, and the
>>>>>>>>>>>reality of greater crackdowns on independent organizing efforts by
>>>>>>>>>>>Chinese workers remains.
>>>>>>>>>>>
>>>>>>>>>>>The rise of China contradicts the earlier commonly held view in the
>>>>>>>>>>>West, particularly in Europe, that there is a decline in the
>>>>>>>>>>>nation-state development framework. Less than a decade ago, many
>>>>>>>>>>>adhered to the idea that the future belongs to unions of nation-states,
>>>>>>>>>>>along the model of the European Union and ASEAN. The current trend,
>>>>>>>>>>>which is showing the rise of countries such as China and India, seems
>>>>>>>>>>>to indicate the ascendancy of a new kind of mega-nation-state. It will
>>>>>>>>>>>be very important to see how China as a new power will interact with
>>>>>>>>>>>the US, the EU, Japan and even Russia. China is now convincing the rest
>>>>>>>>>>>of the developing countries and the old powers that its rise is
>>>>>>>>>>>peaceful, and it is mainly, but not exclusively, increasing its
>>>>>>>>>>>influence through economic relations. How these relationships develop
>>>>>>>>>>>will be crucial to follow.
>>>>>>>>>>>
>>>>>>>>>>>* Dorothy Guerrero is a research associate with Focus on the Global
>>>>>>>>>>>South. <
d.guerreroatfocusweb.org>
>>>>>>>>>>>NOTES
>>>>>>>>>>>
>>>>>>>>>>> 1. Martin Ravallion, "Looking Beyond Averages in the Trade and
>>>>>>>>>>>Poverty Debate", paper for WIDER Workshop: The Impact of Globalisation
>>>>>>>>>>>on the World's Poor, October 2004.
>>>>>>>>>>> 2. "China Tackling Challenges in WTO Transition", Xinhua News,
>>>>>>>>>>>December 11, 2004.
>>>>>>>>>>> 3. Ianchovina, Elena, W. Martin, "Economic Impacts of China's
>>>>>>>>>>>Accession to the World Trade Organization, World Bank Working Paper,
>>>>>>>>>>>the World Bank, May 2003.
>>>>>>>>>>> 4. Asia Times online news, December 20, 2005.
>>>>>>>>>>> 5. Murray Hiebert, "Good Marks for China's WTO Obligations", Wall
>>>>>>>>>>>Street Journal, November 28, 2005.
>>>>>>>>>>> 6. See Dale Wen's "China Copes with Globalization", a report
>>>>>>>>>>>published by the International Forum on Globalization, 2004.
>>>>>>>>>>> 7. Ezra Vogel, "The Emperor is Far Away: Understanding the
>>>>>>>>>>>Challenges Faced by the New Leader", Harvard International Review,
>>>>>>>>>>>China: Vol.25 (2).2003.
>>>>>>>>>>> 8. Douglas Shihua Zheng, "China's Employment Challenges and
>>>>>>>>>>>Strategies after the WTO Accession", World Bank Policy Research Working
>>>>>>>>>>>Paper 3522, February 2005.
>>>>>>>>>>> 9. Martin Hart-Landsberg and David Burkett, China and Socialism:
>>>>>>>>>>>Market Reforms and Class Struggle, Monthly Review Press, 2005.
>>>>>>>>>>>10. Shariff Shuja, "The Limits of Chinese Economic Reform", Jamestown
>>>>>>>>>>>Foundation China Brief, Vol.5 Issue 17, 2005.
>>>>>>>>>>>11. China Economic Net, September 21, 2005.
>>>>>>>>>>>
http://en.ce.cn/Insight/200509.shtml
>>>>>>>>>>>
