The Awakening Giant: Diverse China's Unity & Development Path

1. Topic 5 – China, the Awakening Giant A – The Chinese World B – The Path to Chinese Development C – Selected Problems and Issues

2. A. The Chinese World 1. Unity and Diversity What characterizes Chinese geography and in which way it has been a factor of unity and diversity? 2. Chinese Demography How does China cope with its huge demography? 3. Communist China How communism has changed the Chinese society?

3. 1. Unity and Diversity • A change in emphasis • Conventional perspective: • China was presented mainly from a political and historical perspective. • Imperial history. • Communism (Maoism); a centrally planned economy. • Political movements that impacted the society (e.g. Great Leap Forward, Cultural Revolution, Open Door Policy). • A rural society isolated from the outside world. • In today’s China, this perspective has almost become irrelevant. • Emerging perspective: • Economic forces at play. • A China that has become the industrial motor of the global economy. • Unique social issues linked with industrialization and urbanization. • Growing player in regional geopolitics.

4. 1. Unity and Diversity China: 3.7 million square miles Gobi Desert 65% mountainous USA: 3.6 million square miles

5. 1. Unity and Diversity Arable land: 12% Arable land: 25%

6. Main Rivers of China Heilong Jiang (Amur) China's border with Russia Huang He (Yellow River) Can carry up to 40% sediment weight (highest in the world). Subject to flooding, especially in its delta. Changed course many times. Chang Jiang (Yangtze) Longest river, China’s main street (6,300 km). Pearl River delta system Most productive and sustainable ecosystem in the world. Rice paddies and fish ponds.

7. 1. Unity and Diversity • The Grand Canal • Achievement of Imperial hydrological engineering. • First segments completed around 602 AD (Sui Dynasty). • At its peak during the Ming dynasty (1368-1644 AD). • Totaled about 2,500 kilometers, 1,700 still in use today. • Grain distribution through the empire, notably its capitals. Beijing Tonghui Canal (Yuan) Yellow Sea Yongji Canal (Sui and Yuan) Old course of the Yellow River (Song) Jiao-Lai Canal (Yuan) Jizhou Canal (Yuan) Yongji Canal (Sui) Jizhou East China Sea Tongji Canal (Sui) Luoyang Kaifeng Huaiyin Bian Canal (Song) Chuzhou Yangzhou Canal (Song and Yuan) Yangzhou Jiangnan Canal (Sui, Song and Yuan) Suzhou 400 km Hangzhou

8. The Chinese Realm 53% of the population speaks Mandarin. Han China: 92% of the population Minorities dominantly live in mountainous or arid regions. Turkic Mongols TaklaMakan Gobi Koreas Highland China Han Tibetan Miao-Yao Taiwan Tai

9. The South China Sea – A Contested Area of the Chinese Realm Paracel Islands Spartly Islands Important shipping lanes. Oil and natural gas reserves. Fishing areas. High biodiversity (coral reefs)

10. 1. Unity and Diversity: Main Agricultural Regions China feeds approximately 25% of the world’s population with about 7% of the world’s arable land. North: continental climate growing wheat, sorghum and corn. Wheat Dominant Pasture and oasis Rice Dominant Double-crop rice South: subtropical climate growing rice.

11. 1. Unity and Diversity • Chinese Cuisine • Food and tastes are a cultural expression. • Reflects the complexity of the country. • Diversity of the climate, products and customs: • Each cuisine has its own set of base elements (grains, meats, vegetables, oils and spices). • Strive for harmony of sight, smell, taste and texture. • 8 regional / provincial cuisines: • Shandong, Sichuan, Guangdong, Fujian, Jiangsu, Zhejiang, Hunan and Anhui. • Two main local cuisines (Beijing and Shanghai). • Many minorities cuisines. • Long history of famines and food shortages: • Anything edible will be used. • Parts of animals which are often discarded will be used (feet, head, tendons, tripes). • The wok: a fuel efficient form of fast cooking.

12. 1. Unity and Diversity: The Three Chinas Western China Sparsely populated. Region of minorities. Most mineral resources The Interior Agricultural and demographic hearth. Poor and rural China. Coastal China Forefront of modernization. Political and economic center. Rich, urbanized and open to the world.

13. 1. Unity and Diversity: China’s Main Contrasts

14. 2. Chinese Demographics • Demographics... • More people than the combined population of Europe, the Americas and Japan. • Any change has global ramifications. • The demography of China is a powerful trend (1.32 billion): • About 14-17 million people are added each year in the 1980s. • Average of 13 million people per year in the 1990s. • 10 million people per year in the 2000s. • Expected to peak at about 1.45 billion by 2030. • Projection figures are revised downward (2000-2006: 100 million less in 2050). • 400 million Chinese live in towns and cities (30-35%). • 64% of the population lives in rural areas (950 millions). • 343 million females are in their reproductive age.

15. The Population of China, 0-2050 The population exploded after 1949. Population control was secondary. Mao Zedong saw numbers as a workforce and a way to fight the Soviet Union and the United States. Calls for women to “breed for the motherland”.

16. Chinese Population, 1949-2008 (in millions) (projections to 2050)

18. Population Density of China and Most Populous Provinces Excessive concentration: 50% of the population lives on 8.2% of the land. Bulk of the population along the coast. East China accounts for 90% of the population. 56%, about 728 million, are living in mountainous areas. High density rural areas.

19. 2. Chinese Demographics • Current issues • Population growth undermines Chinese development (education, health, energy, food, transportation). • About 10 million persons reach the job market each year. • Increasing ethnic diversity: • The government had not enforced the One Child Policy among the country’s 55 recognized minority groups. • They had increased their share of still predominantly Han population to 9.4% in 2005 from 6.7% in 1982. • Missing female population. • Sustaining agriculture. • Coping with huge urban growth. • Nutrition transition: growth of “western diseases” (obesity, diabetes).

20. Population Pyramid of China, 2005

21. Population Pyramid of China, 2050

22. 2. Chinese Demographics • Education • Traditionally perceived as a path to self improvement (Confucianism). • College attendance: 20% in 2005 from 1.4% in 1978 • Produces 440,000 engineers per year (10 times more than the US). • Low quality of many college degrees (rote learning instead of creative thinking). • High unemployment among recent graduates (26% found employment in 2008). • Tremendous incurred costs.

23. 2. Chinese Demographics • Surplus labor in rural areas • Development of the rural economy and the higher rate of birth. • Large numbers of surplus rural labor: • Many rural provinces have an excess population they cannot sustain. • Difficult situation in the country side as China is running out of land. • Need to transfer from the agricultural to a non-agricultural sector. • Increased urbanization. • About 20 million people per year migrated from the interior to the coastal areas.

24. 2. Chinese Demographics • Aging of the population • China is in its peak active population years, to last until about 2015. • Then, a rapid shift is expected. • 65 years old or older: • 87 million in 2000. • 112 million in 2010. • 340 million in 2050. • Providing social security and services to a huge elderly population. • High savings rate a positive factor.

25. 3. Communist China: the Path to the PRC

26. Chinese flag Red: the color of revolution. One large star: communist party. Four stars: four classes : the workers, the peasants, the petty bourgeois, and the “patriotic capitalists”. Communism and China The Marxist ideology is of western origin. Leninism (Soviet Union after 1917): Compatible with the Chinese ideology. Absolute central power. Bureaucracy. Social division of the society. Economic and social control. 3. Communist China

27. 3. Communist China • Maoism • Mao (1893-1976) had evolved a Chinese Communist alternative that reflected China’s different demography. • Core goals: • Economic self-reliance. • Power derived from numbers. • Labor-intensive rather than technologically advanced development. • Local community effort. • Concept of “mass-line” leadership: • Integrated intellectuals with peasant guerrilla leaders as a fundamental economic and social strategy. • Launched programs of industrialization and collectivism.

28. 3. Communist China: Maoist Movements

29. 3. Communist China • Development strategies • Based on the Soviet model. • Collectivization: • Land was expropriated. • Farming was collectivized. • Industries were reorganized as state-owned communal enterprises. • Immobility of the population. • Emphasis on “heavy industry” and as source of employment: • Redistribution of economic activities in the interior. • Fear of war and vulnerability of the coast. • Dramatic social changes: • Education: formal state education (politically-oriented). • Religion: abolition but some level of tolerance. • Population growth: favorable policies.

30. 3. Communist China • Reforming China (Deng Xiaoping, 1904-1997) • Initiated important agricultural and industrial reforms (1978). • Opened China to the outside world for trade and technology: • Different from Mao’s view of self-determination. • Characterized by pragmatism: • “It is not important if the cat is black or white, as long as it catches mice”. • Establishment of “socialist market economy” to help China’s development. • Decollectivization (1978-) • Many farms reverted to families. • Land leased. • Growth in Coastal zones: • Major cities. • Special economic zones. • Most important migratory movement from the countryside to the cities in history.

31. Administrative Divisions of China 5 Autonomous Regions Recognition of minorities. Buddhist Tibetans (Xizang). Muslim Uygurs (Xinjiang). Mongols (Inner Mongolia). 4 Municipalities Beijing, Tianjin, Shanghai and Chongqing; China’s most prominent cities. 22 Provinces 7-100 million people. Similar to US states. 2 Special Administrative Regions Hong Kong and Macao. “One country, two systems”. Taiwan “Rebellious Province”

32. B. Chinese Development 1. Rural Development What is the structure and challenges of Chinese agriculture? 2. Urbanization What is the nature and extent of urbanization in China? 3. Industrialization How China was able to industrialize? 4. China and the Global Economy How China is becoming a leading element of the global economy?

33. Challenges for Chinese Agriculture

34. Production and Yield of Paddy Rice in China, 1961-2009

35. Production and Yield of Wheat in China, 1961-2009

36. Meat Production, United States and China 1961-2009 (in tons)

37. 1. Rural Development • Rural-Urban Migrations • Conventional situation: • China fixed its population to its place of work and residence. • Food tickets were only valid at the place of residence. • Residence permit necessary to obtain food (permit not transferable). • Emerging situation: • Possible to transfer the residence permit if a sum is paid. • Surplus labor in the countryside moved to cities in order to occupy lowe wages jobs (construction, manufacturing and services). • Migrants around 100-120 millions (about 10% of the population). • 20% of agricultural workers take at least of month off per year to work outside the farm. • About 250-300 million peasants may have left the countryside by 2010. • Possibility of a reverse migration: • Sharp drop in exports by the end of 2008. • Unemployed workers returning to the countryside.

38. 2. Urbanization • Urbanization concern • Historically underrepresented: • Most of the labor in the countryside. • Urbanization accelerated only after 1978. • 32% urbanization level (2000), or 400 million urban residents. • 40 million new urban residents between 2001-05 (official). • The reality is more likely to be 50-70 millions. • 50% urbanization level to be reached by 2030. • Urbanization occurred at the expense of highly productive agricultural areas.

39. Urban and Rural Population in China, 1961 - 2050

40. 2. Urbanization Beijing The political center. Imperial capital transformed into a national capital. Shanghai The head of the dragon (Yangtse). The industrial center. The new financial center. Gateway to Central China. Guangzhou Old commercial city. New industrial center (Pearl River Delta). Gateway to South China.

41. 3. Industrialization • Urban industrial economy (1950-1980) • Creation of vast administrative units. • The work unit (Danwei): • In industry, services and administration. • Controlling the population through geographical fixation. • Stability and material security provided. • Workers class is the outcome of the communist government: • Regrouping of labor in industrial units. • Employment was guaranteed for life: • Employees have a set of social benefits. • Health, retiring, housing, education, vacations, preferential prices on food. • Transmission of the job to a member of the family. • Promotions were done by the social position and respect of ideology. • Having a job in a State enterprise was to possess an “iron rice bowl”.

42. 3. Industrialization • Open Door Policy and economic development (1980-) • Employment problems: • Increasing since the 1960s because of demographics. • The State sector was not capable to absorb all the new workers. • Inefficiency of the State sector with diminishing returns (classic central planning conundrum). • Collective and private enterprises: • Growth occurring in the labor intensive light industrial sector. • The share of the industry outside the State control has gone from 20% of industrial production in 1978 to 70% in 1993. • Private enterprises account for growing share of the industrial output. • 1978-2001: 200 million Chinese have been lifted out of absolute poverty.

43. 4. China and the Global Economy • Integration to the global economy • Economic growth is mainly driven by exports: • China contributed to 25% of the world’s GDP growth (1995-2002). • With no welfare state, no labor unions and an enormous supply of both labor and savings, “communist” China is a capitalist's paradise. • Lessons from the past: • Each time China opened to the outside, a period of relative prosperity resulted. • Each time China closed to the outside world (e.g. the Great Leap Forward and the Cultural Revolution) was a period of instability. • The CCP is embracing this form of development: • Insuring improvements in the population’s welfare. • Insuring the growth of the economic power of China. • Insuring technological development. • Insuring their own survival / legitimacy.

44. Major Components to Price Reductions by the Chinese Manufacturing Sector, 2005

45. 4. China and the Global Economy • Growing consumption of resources • Economic growth has increased China’s consumption of resources: • “The Dragon is hungry”. • Second largest consumer of oil after the United States. • Energy supply problems with increasing blackouts. • Completion of a natural gas pipeline in 2004 (Tarim Basin to Shanghai). • Driving up global commodity prices: • Increased global competition caused by China. • Fear that China may “export inflation”. • China may hit a “resource wall” inhibiting future developments.

46. China’s Share of the World Commodity Consumption, c2009

47. China’s Endowment in Strategic Mineral Resources, 2007

48. Crude Oil Production and Consumption, China, 1980-2009 (in 1,000 of barrels per day)

49. China’s Crude Oil Imports, 2004

50. 4. China and the Global Economy • Growth of international trade • Tremendous growth of China’s involvement in international trade over the last 25 years. • Exploitation of comparative advantages. • Export oriented (neomercantilist) “strategy”: • China is the world’s 3rd largest exporter (2005), 7.3% of the world’s trade. • Exports account for 40% of the GDP while this share was 5% in 1978. • However, 90% of exports are by foreign owned factories. • United States: • Most important trading partner. • Account for 40% of China’s exports and 10% of its GDP. • American corporations benefiting tremendously from low costs. • The European Union the second. • Japan the third.