tag:theconversation.com,2011:/us/topics/china-in-transition-4243/articlesChina in transition – The Conversation2016-01-19T08:48:10Ztag:theconversation.com,2011:article/532702016-01-19T08:48:10Z2016-01-19T08:48:10ZHow Chinese mix of frugality and risk-taking is driving global stock markets wild<p>Plunging Chinese stocks have been sending worsening ripples across global markets all year, prompting fears of spillovers and <a href="https://theconversation.com/to-avoid-a-2016-crash-the-major-powers-need-to-pull-in-the-same-direction-53059">recessions</a>. </p>
<p>China’s Shanghai Composite Index <a href="http://www.wsj.com/articles/asian-markets-rally-in-early-trading-1452821550">lost 8 percent last week</a> alone and is down more than 20 percent since a recent high in December, putting it in bear-market territory. That slide and the accompanying concerns about the world’s largest economy have sent stocks in the US, Europe and elsewhere into a tailspin. The <a href="http://www.wsj.com/articles/global-stocks-fall-on-oil-and-china-woes-1452850130">Dow Jones Industrial Average and Standard & Poor’s 500</a> are both down 9 percent for the year. </p>
<p>This isn’t the first time in recent memory that tumbling Chinese stocks cascaded across the globe following a sharp rise. The same thing happened last May, in part because China is in the midst of a <a href="https://theconversation.com/chinas-five-year-economic-plan-is-rich-with-symbolism-50001">difficult transition</a> from an economy emphasizing capital investment, exports and savings to one based on innovation, services and greater consumption. </p>
<p>A byproduct of this transition into a more mature economy is slower growth. Typically, as a nation progresses from poor to middle income – and from basic needs and manufacturing toward a service economy that includes more creativity and intellectual assets – growth rates naturally slow down for reasons economists do not fully fathom. </p>
<p>But what’s really behind all this angst, the booms and the busts? And are investors and traders right to be increasingly concerned about a global recession? </p>
<p>A longer-term view suggests the fears are misplaced: the world economy will actually benefit from a successful transition in China, despite a few bumps along the way. </p>
<p>And as for the cause, it helps to examine Chinese culture and history. A heady brew of frugality, wild risk-taking and amateurism has created huge bubbles – ones that were bound to deflate. </p>
<p>These are some of the lessons I’ve learned from following China’s economy for two decades, witnessing firsthand the fascinating transformation of places like Beijing from cities of bicycles with few cars and clear air to ones known for massive traffic jams and ubiquitous face masks. </p>
<h2>China stocks: a brief history</h2>
<p>First let’s take a closer look at the Chinese stock market’s behavior in recent years. </p>
<p>Despite the <a href="https://theconversation.com/chinas-stock-market-is-in-for-a-turbulent-2016-52731">volatility</a>, Chinese stocks have yielded among the best returns in the world. The graph below shows the change in the Shanghai Composite Index since its launch in 1991. Even with the wild swings last May and over the past month, it has returned a compounded average growth rate of 13.1% since it was created, double the rate of return for the Dow in the US and the FTSE 100 in Europe over the same 25-year period. </p>
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<p>This kind of performance should be the envy of the world and not cause for fears and sell-offs elsewhere.</p>
<p>So why the angst and hand-wringing? Because Chinese markets also exhibit those distressingly wild swings, in amazingly short time periods. Consider the index’s 259 percent jump from 1,659 on August 6, 2006, to 5,955 on October 1, 2007, and the subsequent 69 percent plunge to 1,821 on December 1, 2008. </p>
<p>More recently, the index was 2,117 on August 1, 2014, but was madly propelled upward to 4,612 by May 1, 2015, followed by a crash to 2,950 on January 13.</p>
<p>Here’s where an understanding of Chinese culture and history comes in.</p>
<h2>A tradition of frugality and savings</h2>
<blockquote>
<p>He who will not economize will have to agonize.</p>
<p>I have … precious things which I hold fast and prize. The first is gentleness; the second is frugality.</p>
</blockquote>
<p>Until a generation ago, most Chinese were poor. Their sages like Confucius (the first quote above) or Lao Tze (the second) wrote proverbs that made a virtue out of sheer necessity. </p>
<p>Mainland Chinese culture today is still in a transition in which sudden affluence has not yet erased the frugal habits of the past. Hundreds of millions in China grew up mainly on noodles or rice, with at best tiny portions (under two ounces) of <a href="http://www.theguardian.com/environment/datablog/2009/sep/02/meat-consumption-per-capita-climate-change">meat served</a> no more than three times a week to accompany the starches. While today they eat better and partake more of flesh, the parsimony of the past lingers in the unusually high savings rate in China. </p>
<p>The average American household – depending on the state of the U.S. economy – <a href="http://www.pgpf.org/chart-archive/0119_international_saving">saves</a> between -2 percent and 4 percent of its income. By contrast, the typical Chinese household <a href="http://www.bloomberg.com/news/articles/2015-05-01/chinese-consumers-cling-to-saving-suppressing-spending">saves</a> about 30 percent of its disposable income. As a result, China has by far the <a href="http://data.worldbank.org/indicator/NY.GNS.ICTR.ZS">world’s highest gross saving rate</a> as a share of GDP, according to the World Bank. </p>
<p>This is something the Chinese government is trying to change by encouraging consumption. But altering this millennia-old habit will take a long time. Meanwhile, the huge savings surplus has to go somewhere. </p>
<p>What choices does a family have to invest its savings? Only so much can go into gold or other valuables. The bank, a relatively new institution in China, offers <a href="http://china.deposits.org/deposits/">meager yields</a> that turn negative when factoring in inflation (meaning when you withdraw your money a month or year down the road, you’ll have less spending power than when you deposited it). Real estate is perceived as an overinflated bubble destined to pop, and government <a href="http://globalbusiness.me/2015/09/11/capital-outflows-from-china-and-the-hidden-story-in-chinas-fdi-statistics/">capital controls</a> prevent investment abroad. </p>
<h2>Frugality and risk-taking: odd bedfellows</h2>
<blockquote>
<p>Pearls don’t lie on the seashore. If you want one, you must dive for it.</p>
</blockquote>
<p>― Chinese proverb</p>
<p>It seems like a paradox that Chinese traditions emphasize frugality, while at the same time its culture lauds risk-taking. </p>
<p>Studies by business professors Elke Weber and Christopher Hsee <a href="http://decisionsciences.columbia.edu/uploads/File/Articles/weber_hsee_mgtsc1998.pdf">concluded</a> that when it comes to social interactions, Chinese are indeed conformist and risk-averse. However, in financial transactions, Chinese are significantly bolder than investors in many western nations, something also corroborated in Chinese proverbs that appear to provide greater risk-taking advice than American proverbs. </p>
<p>Gambling also has a long history in China. Desmond Lam, in his “<a href="http://www.urbino.net/articles.cfm?specificarticle=a+brief+chinese+history+of+gambling">A Brief Chinese History of Gambling</a>,” relates how games of chance began as early as the Shang Dynasty (1700–1027 BC). Gambling became an obsession amongst high officials as well as common folk. Gambling parlors proliferated in the Qing Dynasty, and continue to this day.</p>
<p>The widespread willingness to gamble is also illustrated in a survey (conducted early last year by State Street Corporation) that <a href="http://money.cnn.com/2015/04/01/investing/investing-stock-market-china/?iid=EL">showed</a> that as many as 81 percent of Chinese investors traded at least once a month, which is by far the highest rate in the world. </p>
<h2>Mania over a quick buck</h2>
<p>And that brings us back to the recent volatility.</p>
<p>In April 2015, hairdressers in Shanghai or Shenzhen were <a href="http://money.cnn.com/2015/06/15/investing/china-stocks-10-trillion/">telling</a> their customers how they had doubled their investment in just two months between February and May 2015. The S&P 500, by contrast, barely budged. </p>
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<p>The mania for a “quick buck” affected all levels of society, down to workers with relatively few savings. It was a wild run-up similar to the tripling of share prices from October 2006 to October 2007, followed by the almost predictable collapse to the original levels by December 2008. </p>
<p>To the <em>nouveau riche</em> in emerging nations, modern finance is a brave new world, leading to speculative excess untempered by losses. The crashes in 2007 and 2015 did not deter new hopefuls from entering this game in China. </p>
<p>That’s at least in part because there is a lot of pent-up money in China, chasing very few options. This, plus the fact that most Chinese investors are novices and are willing to take more risks than Western investors, explains the wild swings in the Chinese markets.</p>
<p>Moreover, the gyrations in the Chinese stock markets have little to do with the actual fundamentals of the economy, despite some recent headlines. That’s the conclusion of a <a href="http://www.saif.sjtu.edu.cn/sites/default/files/images/ymzhou/paper_736.pdf">recent study by scholars</a> at the Wharton School and Shanghai Jiaotong University, calling the typical correlation between stock returns and future GDP growth “statistically insignificant.”</p>
<h2>No need to panic</h2>
<p>So will the behavior of less than one percent of the Chinese population – those who invest in shares – drag China and the rest of the world into a recession in 2016? </p>
<p>The likelihood is low. Too much is being read into the slowdown in inflation-adjusted GDP growth, which is <a href="https://www.imf.org/external/country/chn/">forecast by the IMF</a> at a little over 6 percent this year – still a remarkable performance and among the highest in the world. And as noted above, volatility in Chinese stocks isn’t necessarily a sign of anything in the real economy. </p>
<p>Regulators, in fact, may deserve some of the blame by acting amateurisly with new “<a href="https://theconversation.com/just-another-bad-day-in-the-office-for-chinas-lonely-stock-traders-52756">circuit breakers</a>” that halt trading if the main index falls by more than 7 percent. Doing so may actually be making matters worse by broadcasting a “panic” signal to investors.</p>
<p>True, the Chinese economy is undergoing a tricky transition involving the fundamental restructuring of how it grows. The world will be better for it, thus to investors worldwide: don’t panic.</p><img src="https://counter.theconversation.com/content/53270/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Farok J. Contractor does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Global stocks have been turbulent all year thanks to jitters about China. But what’s really going on here?Farok J. Contractor, Distinguished Professor of Management & Global Business, Rutgers UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/488042015-11-02T11:03:18Z2015-11-02T11:03:18Z‘Rise’ of China’s yuan is much ado about little<figure><img src="https://images.theconversation.com/files/100393/original/image-20151030-16510-ffhl7u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The yuan has a long way to go.</span> <span class="attribution"><span class="source">Yuan dollar via www.shutterstock.com</span></span></figcaption></figure><p>China’s currency, the yuan, recently (and briefly) became the <a href="http://www.swift.com/about_swift/shownews?param_dcr=news.data/en/swift_com/2015/PR_RMB_special_edition_sibos.xml">world’s fourth-most-used form of payment</a>, behind the US dollar, euro and pound sterling, having (marginally) pushed past the Japanese yen. </p>
<p>Last week, China’s central bank <a href="http://www.bloomberg.com/news/articles/2015-10-22/china-said-to-weigh-pledge-for-opening-capital-account-by-2020-ig1sbvez">discussed</a> whether to make an explicit pledge to dismantle the capital controls that prevent the yuan from becoming fully convertible with other currencies at rates determined by the market. </p>
<p>Does all this mean the yuan’s heyday has finally arrived? Hardly. </p>
<p>As we will see, there is less significance to this phenomenon – and talk of the yuan becoming an “official IMF reserve currency” – than media headlines suggest. </p>
<h2>A drop in the bucket</h2>
<p>The yuan still accounts for a small fraction of world payments, <a href="http://www.scmp.com/business/markets/article/1873623/share-chinese-currency-slides-global-payments">2.45%, to be precise</a> in September after <a href="http://www.bloomberg.com/news/articles/2015-10-06/yuan-overtakes-yen-as-world-s-fourth-most-used-payments-currency">edging up to 2.79%</a> – and fourth place – a month earlier. This is less than a third of the pound’s 9% share, a tenth of the euro’s 29% and a drop in the bucket of the dollar’s 43%. </p>
<p>Another measure of a currency’s international prevalence is in <a href="http://data.imf.org/?sk=E6A5F467-C14B-4AA8-9F6D-5A09EC4E62A4">foreign exchange reserves</a>, which result from the accumulation of export surpluses. </p>
<p>The yuan <a href="http://www.bloomberg.com/news/articles/2015-08-04/imf-says-more-work-needed-before-yuan-reserve-currency-decision">accounts</a> for just 1% of other countries’ allocated reserves, compared with 64% for the dollar, even though China accounts for the same <a href="http://stat.wto.org/CountryProfile/WSDBCountryPFView.aspx?Country=CN&">share of world trade</a> (about 12%) as the US. </p>
<p>In other words, the yuan is underrepresented in payments and reserves relative to its share of world trade, while the dollar is similarly overrepresented, due to the popularity among investors and governments of the US’ broad, liquid and secure capital markets.</p>
<p>Market forces alone should lead one to expect the yuan’s share to rise and the dollar’s to fall over time. </p>
<p>Matching the currency used in payments and receipts in trade and investment reduces transaction costs, currency risk and volatility exposure, so more people will want to use the yuan as their transactions with China increase.</p>
<h2>A shift away from trade</h2>
<p><a href="http://data.worldbank.org/country/china">China’s share of world GDP</a> (13.3% in nominal terms as of 2014) will likely rise as its economy continues to outpace the average of other large economies. But use of the yuan for payments and reserves may increase at a slower pace as China shifts away from an economy fueled by trade.</p>
<p>This is because China plans to <a href="http://www.reuters.com/article/2013/03/05/us-china-parliament-idUSBRE92402R20130305">reduce</a> its reliance on export-led growth and increase <a href="http://data.worldbank.org/indicator/NE.CON.PETC.ZS">domestic consumption as a share of GDP</a> (which is currently very low). </p>
<p>Though there are few signs of this happening so far, the plan, if successful, means that trade as a share of GDP will begin to shrink. And that will likely mean slower growth in use of the yuan than in the recent past.</p>
<h2>The difficult road to becoming a reserve currency</h2>
<p>To become an “official” IMF-endorsed “reserve currency,” China has to meet various criteria that would make the yuan “freely usable”: that is, readily bought and sold by anyone at any time. </p>
<p>These criteria include a market-determined interest rate, exchange rate flexibility and convertibility, a more open capital account, and a significant share of official reserves, international banking liabilities and global debt securities. While many steps have been taken in these directions, including very recently, none of these criteria is close to being fully achieved. </p>
<p>All this requires politically and technically difficult domestic financial market reforms and liberalization. Such reforms reduce the <a href="http://www.atlanticcouncil.org/images/publications/RMB_Ascending.pdf">government’s ability</a> to establish policies that reduce volatility and encourage growth. That’s because of what is known as the “trilemma” of international finance, in which only two of the three goals of monetary policy – control of interest rates, exchange rate flexibility and capital mobility – can be achieved at the same time. </p>
<h2>Market manipulations</h2>
<p>The Chinese government’s own reactions to this past summer’s <a href="https://theconversation.com/explainer-chinas-black-monday-and-global-market-turbulence-46566">financial market turmoil</a> suggest that it is not ready to undertake or complete many of the required reforms. </p>
<p>Its <a href="http://www.slate.com/blogs/moneybox/2015/08/31/china_s_stock_market_intervention_the_government_intervened_for_the_sake.html">interventions</a> show that it is not yet willing to allow market forces to rule in its currency and financial markets. This includes its effort to halt the precipitous decline of an overvalued stock market – which it itself had previously boosted – and to <a href="http://money.cnn.com/2015/08/11/news/economy/china-yuan-devaluation-stocks-market/">devalue</a> the yuan by the largest amount in two decades. </p>
<h2>Trust must be earned</h2>
<p>Even if the IMF designates the yuan as a reserve currency, this does not mean that its use as such will rise quickly or greatly. World central banks and individual investors will only increase their use and holdings of yuan if they have confidence in the currency. </p>
<p>And that won’t happen until Chinese financial markets develop the depth, diversity, transparency and security that have kept the dollar reigning supreme as the world’s preferred reserve currency, even as the US share of global trade and investment has declined. </p>
<p>Governments are understandably reluctant to hold reserves in a politically managed rather than market-determined currency. </p>
<p>The trust of market actors has to be earned over time and cannot be merely conferred by an international body like the IMF.</p>
<h2>Benefits and disadvantages</h2>
<p>There are some benefits when a currency becomes more widely used in the global monetary system – its “internationalization” – regardless of whether it gets the IMF’s imprimatur. </p>
<p>One benefit is “seignorage,” which is the revenue the issuer gets from the value of a currency over and above the cost of producing it. Others include a looser (more stimulative) monetary policy, enabling (marginally) faster growth, and the ability to borrow and invest internationally in one’s own currency, thus avoiding currency risk.</p>
<p>But there are also disadvantages, including losing control over the effectiveness of monetary policy and exposing the domestic economy to destabilizing (and increasingly volatile) global capital flows. </p>
<p>This is why small open economies like <a href="http://www.bis.org/publ/bppdf/bispap15l.pdf">Singapore</a> and Switzerland, whose currencies are popular with international investors, have long resisted internationalization. In contrast, China seems to regard reserve currency status as <a href="http://www.cifr.edu.au/assets/document/CIFR%20Internationalisation%20of%20the%20RMB%20Report%20Final%20web.pdf">desirable</a> for its own sake, as a “status good” conferring an assumed prestige that it craves.</p>
<p>In the longer run, both China and the world economy stand to gain from increased international use of the yuan. China will benefit from the domestic financial market reforms that internationalization will require, and the rest of the world will get a more diverse basket of currencies to choose from to finance trade and investment and hold reserves, reducing the current overdependence on the US dollar. </p>
<p>This should also help us avoid the chronic and excessive trade and financial imbalances among countries.</p>
<p>But before we can get there, China needs to follow through on <a href="http://www.economist.com/news/special-report/21668719-china-shakes-worldbut-not-way-it-hoped-longer-march">major reforms</a> of its domestic financial system, which will not be quick, easy or certain.</p><img src="https://counter.theconversation.com/content/48804/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Linda Lim does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Recent headlines suggesting the yuan is on the verge of becoming an international currency stray far from reality.Linda Lim, Professor of Strategy, University of MichiganLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/483262015-10-04T19:21:03Z2015-10-04T19:21:03ZFactCheck Q&A: Will China have a 150% increase in carbon emissions on 2005 levels by 2030?<figure><img src="https://images.theconversation.com/files/96882/original/image-20151001-5833-kg2yf2.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Agriculture Minister Barnaby Joyce, speaking on Q&A.</span> <span class="attribution"><span class="source">Q&A</span></span></figcaption></figure><p>(<strong>The Conversation is fact-checking claims made on Q&A, broadcast Mondays on the ABC at 9:35pm. Thank you to everyone who sent us quotes for checking. Viewers can request statements to be FactChecked via <a href="http://www.twitter.com/conversationEDU">Twitter</a> using hashtags #FactCheck and #QandA, on <a href="http://www.facebook.com/conversationEDU">Facebook</a> or by <a href="mailto:checkit@theconversation.edu.au">email</a>.</strong></p>
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<figcaption><span class="caption">Excerpt from Q&A, September 28, 2015.</span></figcaption>
</figure>
<blockquote>
<p>China from 2005, I think to 2030, will have 150% increase in carbon emissions with their trading scheme. We will have between a 26 and 28% reduction in our emissions on 2005 levels without a trading scheme under our current process. – Agriculture Minister Barnaby Joyce, <a>speaking</a> on Q&A, September 28, 2015. </p>
</blockquote>
<p>There are two things worth checking here: the source of Joyce’s figures and the appropriateness of comparing China and Australia’s projected emissions. </p>
<p>On the first: his quote reflects figures from a recent government <a href="https://www.dpmc.gov.au/sites/default/files/publications/Setting%20Australias%20post-2020%20target%20for%20reducing%20greenhouse%20gas%20emissions_0.pdf">report</a>, but the projected 150% increase in China’s emissions is at the upper end of estimates. It rests on some radical assumptions about, for example, the pace of China’s economic growth. </p>
<p>On the second point: comparing China’s projected emissions output with Australia’s is like comparing apples and oranges. It tells us little about the wisdom or otherwise of introducing an emissions trading scheme in Australia.</p>
<h2>Checking the source</h2>
<p>Minister Joyce’s quote rests on figures from an August 2015 <a href="https://www.dpmc.gov.au/sites/default/files/publications/Setting%20Australias%20post-2020%20target%20for%20reducing%20greenhouse%20gas%20emissions_0.pdf">report</a> prepared by the UNFCCC Taskforce at the Department of the Prime Minister and Cabinet. (The UNFCCC is the United Nations Framework Convention on Climate Change, the arm of the UN responsible for global climate talks).</p>
<p>The report says:</p>
<blockquote>
<p>China has announced it will reduce its emissions intensity 60 to 65% by 2030 on 2005 levels. This is projected to lead to a 150% rise in emissions by 2030.</p>
</blockquote>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/96924/original/image-20151001-306-h0uqpx.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/96924/original/image-20151001-306-h0uqpx.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/96924/original/image-20151001-306-h0uqpx.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=297&fit=crop&dpr=1 600w, https://images.theconversation.com/files/96924/original/image-20151001-306-h0uqpx.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=297&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/96924/original/image-20151001-306-h0uqpx.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=297&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/96924/original/image-20151001-306-h0uqpx.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=374&fit=crop&dpr=1 754w, https://images.theconversation.com/files/96924/original/image-20151001-306-h0uqpx.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=374&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/96924/original/image-20151001-306-h0uqpx.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=374&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Targets submitted by key countries, on a 2005 base.</span>
<span class="attribution"><a class="source" href="https://www.dpmc.gov.au/sites/default/files/publications/Setting%20Australias%20post-2020%20target%20for%20reducing%20greenhouse%20gas%20emissions_0.pdf">DPMC</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>(By the way, <a href="https://theconversation.com/factcheck-has-any-country-bested-australia-in-emissions-intensity-reduction-since-1990-41518">emissions intensity</a> is greenhouse gas emissions per unit of gross domestic product (GDP).)</p>
<p>China’s <a href="http://www4.unfccc.int/submissions/INDC/Published%20Documents/China/1/China's%20INDC%20-%20on%2030%20June%202015.pdf">Intended Nationally Determined Contribution</a> (<a href="http://unfccc.int/focus/indc_portal/items/8766.php">INDC</a>) pledge outlines its goal to peak its carbon emissions by 2030. </p>
<p>However, it requires a complex series of calculations and assumptions to estimate the emissions <em>level</em> at which it will peak. It’s worth comparing the 150% figure with a number of independent evaluations. </p>
<p>Analysts such as <a href="http://climateactiontracker.org/countries/china">Climate Action Tracker</a> predict that in 2030, China’s emissions will be somewhere in the range of 13.8-14.4 gigatonnes of CO<sub>2</sub> equivalent per year (GtCO<sub>2</sub>e/year). </p>
<p>If this is compared with China’s 2005 emissions level of 7.34 GtCO<sub>2</sub>e/year (as recorded by a government information <a href="https://www.environment.gov.au/system/files/pages/ac0b4568-a29b-4def-872e-f7fe96da73ea/files/emissions-information-sheet.pdf">sheet</a> published by the Department of Environment), this represents an increase of between 88 and 96% – well short of 150%.</p>
<p>If we assume, (as <a href="https://www.google.com.au/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CBwQFjAAahUKEwiDwrbHuKDIAhVKlZQKHZiLA5M&url=https%3A%2F%2Fwww.fas.org%2Fsgp%2Fcrs%2Frow%2FR41919.pdf&usg=AFQjCNFZcA29LMtJ4CWYe8kohGn0ULn--g">this US Congressional Research Service report</a> has), that China’s 2005 emissions were more like 7.5 Gt CO<sub>2</sub>e per year, that would mean the percentage is even lower – and even further away from 150%.</p>
<p>Most analysts predict China’s carbon emissions will peak some time early in the 2025-30 window, with <a href="http://www.carbonbrief.org/blog/2015/07/climate-pledge-puts-china-on-course-to-peak-emissions-as-early-as-2027/">Carbon Brief</a> projecting a maximum level of 12.7 Gt CO<sub>2</sub>e per year in 2027 – or around 73% above 2005 levels. </p>
<p>So the 150% estimate Joyce is quoting must include some radical assumptions about, for example, China’s economic growth.</p>
<h2>An appropriate comparison?</h2>
<p>Joyce then compares China’s projected increased emissions with <a href="http://www4.unfccc.int/submissions/INDC/Published%20Documents/Australia/1/Australias%20Intended%20Nationally%20Determined%20Contribution%20to%20a%20new%20Climate%20Change%20Agreement%20-%20August%202015.pdf">Australia’s pledge</a> of 26-28% <em>below</em> 2005 levels. </p>
<p>This is like comparing apples with oranges. China is a rapidly developing and expanding economy whose energy needs will increase markedly leading up to 2030, whereas Australia is a more mature developed economy with lower growth whose trajectory will be significantly different. For example, Australia’s demand for electricity has <a href="https://theconversation.com/renewable-energy-deal-gives-no-certainty-over-coming-decades-42329">fallen since 2008</a> (although it has <a href="http://www.pittsh.com.au/assets/files/Cedex/CEDEX%20Electricity%20update%20Oct%202015.pdf">risen</a> recently in some parts of Australia).</p>
<p>So it’s not surprising that under almost any policy regime, China’s carbon emissions will increase in order to meet rising demand using every possible energy source, whereas Australia’s energy growth prospects are more limited and indeed may flatline or even decline over the same period.</p>
<p>It is unrealistic to compare two vastly differing economies. The primary determinant of future emissions <a href="http://www.psmag.com/business-economics/economy-cut-emissions-in-united-states">will be influenced mainly</a> by the underlying future trajectory for each economy - and less significantly by the energy policy mix.</p>
<p>There are three policy levers that governments can use to address climate change: placing a price on carbon, incentive schemes (such as the <a href="https://www.environment.gov.au/climate-change/renewable-energy-target-scheme">Renewable Energy Target</a> and <a href="https://www.environment.gov.au/clean-air">Direct Action</a>), and legislated emissions and performance standards (such as those employed by President Obama through <a href="http://www2.epa.gov/cleanpowerplan/clean-power-plan-existing-power-plants">Environmental Protection Agency regulation</a>). Using all three levers together is likely to accelerate the rate of carbon emissions reduction, therefore buying time and saving the economic cost of climate change over the long term.</p>
<p>The current Australian government is using a single lever - incentives (including Direct Action and a scaled-down Renewable Energy Target). <a href="http://climateactiontracker.org/countries/australia.html">Experts say</a> Australia’s post-2020 climate pledges are not enough to keep global warming below 2 degrees Celsius.</p>
<p>China, on the other hand, has trialled emissions trading schemes in seven of its provinces and cities, and has pledged to adopt this <a href="https://theconversation.com/china-announces-national-emissions-trading-scheme-experts-react-48159">nationally</a>.</p>
<p>Joyce’s quote links an emissions trading scheme to China’s higher future emissions levels, and links Australia’s decreased future emissions to the absence of a trading scheme. </p>
<p>However, China’s future emissions are predicted to be higher because of its economic growth trajectory. An ETS may put a dent in their predicted future emissions but, because of its pace of GDP growth, there’s no way it could match Australia’s pledge to reduce its emissions on 2005 levels. It’s an unfair comparison. </p>
<h2>Verdict</h2>
<p>The 150% estimate Joyce is quoting is taken from a recent government <a href="https://www.dpmc.gov.au/sites/default/files/publications/Setting%20Australias%20post-2020%20target%20for%20reducing%20greenhouse%20gas%20emissions_0.pdf">report</a>. However, it is at the upper end of estimates and must include some radical assumptions about, for example, China’s economic growth.</p>
<p>Comparing China’s predicted emissions growth with Australia’s is like comparing apples and oranges, and tells you little about the wisdom of adopting a carbon trading scheme to reduce emissions. <strong>– Ken Baldwin</strong></p>
<hr>
<h2>Review</h2>
<p>This FactCheck is accurate and reasonable in the points it makes. It is true that Joyce’s quote was comparing an industrialising economy that is still growing with a mature economy whose energy consumption is likely to moderate or fall. </p>
<p>The point to make here is that China is using its state power in a dramatic way that makes it very different from Australia. <a href="https://theconversation.com/china-announces-national-emissions-trading-scheme-experts-react-48159">China is curbing its direct coal consumption</a> in a way that is quite likely to lead to peaking in the country’s emissions well before 2030 – a prospect not considered in the report that the minister was quoting from. At the same time, China is driving the expansion of its renewable energy industry, which will likewise have a dramatic impact on likely future emissions. <strong>– John Mathews</strong></p>
<hr>
<p><div class="callout"> Have you ever seen a “fact” worth checking? The Conversation’s FactCheck asks academic experts to test claims and see how true they are. We then ask a second academic to review an anonymous copy of the article. You can request a check at checkit@theconversation.edu.au. Please include the statement you would like us to check, the date it was made, and a link if possible.</div></p><img src="https://counter.theconversation.com/content/48326/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ken Baldwin has received funding from the Australian Research Council and the Australia-Indonesia Centre.
</span></em></p><p class="fine-print"><em><span>John Mathews does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Agriculture Minister, Barnaby Joyce, told Q&A that China will increase its carbon emissions 150% between 2005 and 2030. Is that correct?Ken Baldwin, Director, Energy Change Institute, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/387442015-03-19T09:35:23Z2015-03-19T09:35:23ZInequality in China and the impact on women’s rights<p>In 1995, China hosted the Fourth World Conference on Women, which produced the <a href="http://www.un.org/womenwatch/daw/beijing/platform/">Beijing Platform for Action</a>, a document outlining concrete measures to achieve gender equality worldwide. Last week, United Nations Secretary-General Ban Ki-Moon declared “Women are not just victims; they are agents of progress and change,” at the 59th meeting of the UN Commission on the Status of Women in New York. </p>
<p>Yet today China’s authorities are actively thwarting women’s ability to act to achieve their goals. </p>
<p>On March 8, International Women’s Day, police detained five women’s rights activists planning an action to raise awareness about sexual harassment on public transportation. The United States has since demanded their <a href="http://www.reuters.com/article/2015/03/13/us-china-rights-usa-idUSKBN0M901N20150313">release. </a></p>
<p>Why are China’s authorities threatened by the efforts of these women?</p>
<h2>Overall inequity may disproportionately affect women</h2>
<p>Let’s put the answer in context. Chinese society is torn by widening inequality. China has one of the greatest economic divides among countries with advanced economies, surpassing the United States. (China’s <a href="http://www.pnas.org/content/111/19/6928.full.pdf">Gini coefficient</a>, a measure of income distribution, is .53, compared to .45 in the US and .34 in India). In a society that just over two decades ago was among the most equal, these new social divisions generate tensions and conflict. </p>
<p>In 2005, the last time the government released its count, 87,000 “mass incidents” or protests of various sorts were recorded. The nation’s president Xi Jinping recently moved to contain expressions of dissent. Social discontent stems from diverse sources, including ethnic tensions, housing and land displacement, pollution, and exploitative employment practices. One well-organized protest could spark a more widespread movement that might pose a threat to the political status quo.</p>
<p>Just two weeks ago, journalist Chai Jing released a sobering <a href="https://www.youtube.com/watch?v=T6X2uwlQGQM">documentary</a> about the blighted environment of China’s major cities, generated by over three decades of rapid economic growth. The exposé certainly struck fear into millions of citizens who were able to watch it before being removed from China’s internet platforms. While many citizens are concerned about air and food quality, mothers - who shop and prepare food for their children - are particularly disturbed. </p>
<p>Women’s solidarity around sexual harassment in public places may also catalyze their struggle for a clean environment, which in turn may inspire the environmental movement to action.</p>
<p>And let’s not forget that this all occurs in the shadow of the Hong Kong student democracy protests, which paralyzed that city center for weeks. </p>
<h2>Authorities warn that non-mothers will be society’s ‘leftovers’</h2>
<p>China’s women have plenty of additional reasons for discontent. The state-led Women’s Federation recently concluded a campaign that turned up the volume on the ticking biological and social clocks of successful professional women, warning that they would be “leftovers” (shengnu, in Mandarin) if they didn’t <a href="http://www.pri.org/stories/2013-01-28/china-investing-big-convincing-leftover-women-get-married">marry and procreate</a> by their mid-20s. </p>
<p>A state-invented discourse on suzhi or “quality” emphasizes mothers’ central role in ensuring the future success of their children. This is a thinly veiled campaign to encourage women to prioritize the domestic realm over career, while ignoring the role of men in the household. Moreover, a matrix of state laws have made it quite difficult for urban women to maintain claims to the value of housing in the event of divorce, according to Leta Hong Fincher, author of <a href="http://www.dissentmagazine.org/article/womens-rights-at-risk.">Leftover Women</a>. Rural women are also losing access to land rights.</p>
<p>Meanwhile, the wage gap between men and women has grown steadily; urban women now earn 69 percent of male wages, largely due to occupational sex segregation. My book, <a href="http://www.sup.org/books/title/?id=18491">Markets and Bodies,</a> follows women as they are channeled into low-wage, low-status consumer service jobs, in which they are required to learn the fragile femininity that justifies their placement in these positions. </p>
<p>Retirement age is another source of inequality: Women are legally required to retire between ages 50 and 55, whereas men’s retirement age is 60, giving them between 5 and 10 more years of wage-earning.</p>
<p>Might all this add up to an attempt to mitigate men’s sense of inequality by ensuring their economic dominance over women? </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/75075/original/image-20150317-22271-5az6db.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/75075/original/image-20150317-22271-5az6db.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/75075/original/image-20150317-22271-5az6db.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=387&fit=crop&dpr=1 600w, https://images.theconversation.com/files/75075/original/image-20150317-22271-5az6db.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=387&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/75075/original/image-20150317-22271-5az6db.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=387&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/75075/original/image-20150317-22271-5az6db.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=486&fit=crop&dpr=1 754w, https://images.theconversation.com/files/75075/original/image-20150317-22271-5az6db.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=486&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/75075/original/image-20150317-22271-5az6db.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=486&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Porcelain statues at Cat Street Antiques Market, Hong Kong. The statue in the center of the photo casts a light on how femininity was perceived in Communist China in the late 1960s.</span>
<span class="attribution"><a class="source" href="http://commons.wikimedia.org/wiki/File:Woman_in_Communist_China.jpg">Frank Schulenburg</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>The Chinese Communist Party has always maintained a formal commitment to equality between women and men. In the 1950s it brought women en mass into the labor force, ended the practice of <a href="http://www.wsj.com/articles/SB125800116737444883">footbinding</a>, and dramatically improved female literacy. In her book <a href="http://www.sup.org/books/title/?id=5009">Only Hope</a>, Vanessa Fong argues that the one-child policy led to greater family investment in daughters, when there were no sons with whom to compete. </p>
<h2>Backtracks on original commitment to equality</h2>
<p>China <a href="http://www3.weforu.org/docs/GGGR14/GGGR_CompleteReport_2014.pdf">ranks </a>87th among the 142 countries studied in measures of gender gaps in economic, educational and political participation, as well as health, so its efforts toward parity surpasses many countries in the world.</p>
<p>But the Chinese Communist Party has a history of pragmatically prioritizing men’s over women’s interests, even while it made important strides to redress gender hierarchies. It put the brakes on implementation of its 1950 Marriage Law offering couples the right to divorce, when too many wives attempted to leave their husbands.</p>
<p>The party maintained men as the formal heads of household and women continued to shoulder a second shift. </p>
<p>Today Chinese leaders are dusting off <a href="http://www.newyorker.com/magazine/2014/01/13/confucius-comes-home">Confucianism</a> and founding institutes abroad in the philosopher’s name while, promoting the framework at home. The reemergence of a philosophy founded on gender (as well as generational) hierarchies must be alarming to China’s feminists. It may very well be a strategy through which the state, to use its own slogan, “harmonizes” social inequality. </p>
<h2>Not just a return to the past</h2>
<p>But growing gender inequality in China is not simply a return to past practices and prejudices. This is a new age of wealth accumulation that is unprecedented in China’s history. Women are being made to bear an unfair burden of growing inequality to placate potentially more powerful and restive groups. </p>
<p>It is difficult to say what will happen next. Government authorities allowed Chai Jing’s documentary to circulate longer than anyone imagined. We can also find some hope in the fact that vocal feminists hold positions in major universities and agencies. For example, Li Yinhe, who recently <a href="http://www.nytimes.com/2015/03/07/world/asia/chinese-advocate-of-sexuality-opens-door-into-her-own-private-life.html?_r=0,">revealed </a>that her partner is transsexual, is a member of the prestigious Chinese Academy of Social Sciences. At the same time, substantial dissent will remain invisible to most as the government regularly enlists an elaborate grassroots network to quell disputes before they gain momentum, in a process Ching Kwan Lee and Yonghong Zhang call <a href="http://www.sscnet.ucla.edu/soc/faculty/CKLee/AJS%202013.pdf">“bargained authoritarianism.”</a></p>
<p>In the end, the fate of women in China may be more likely to be “bargained” behind closed doors than fought over in the streets.</p><img src="https://counter.theconversation.com/content/38744/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Eileen Otis does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Once China claimed to lead the way in equality for women. Today, women are warned they will be “leftovers” if they don’t produce children.Eileen Otis, Associate Professor, University of OregonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/386042015-03-18T19:43:27Z2015-03-18T19:43:27ZChina’s ‘Silent Spring’ has many more political hurdles to jump<p><a href="https://www.youtube.com/watch?feature=player_embedded&v=T6X2uwlQGQM">Under the Dome</a>, the self-funded documentary by former television news anchor Chai Jing about China’s battles with smog, has been an internet phenomenon. Within three days of its release on Febuary 28, it had racked up more than <a href="http://www.reuters.com/article/2015/03/02/us-china-environment-idUSKBN0LY11P20150302">150 million views</a> and garnered <a href="http://www.theguardian.com/world/2015/mar/02/china-environmental-policy-documentary-under-the-dome-chai-jing-video">280 million posts</a> on Sina Weibo, a Chinese equivalent of Twitter.</p>
<p>Then the Chinese government <a href="http://www.washingtonpost.com/world/china-wants-cleaner-air--without-an-environmental-movement/2015/03/15/8e34c738-c8b6-11e4-bea5-b893e7ac3fb3_story.html">removed it from the web</a>, stung by the criticism the film prompted, leaving those who had hailed it as a landmark moment in Chinese environmentalism wondering if the documentary’s influence would end up being curtailed.</p>
<p>Seemingly inspired by Al Gore’s <a href="http://www.imdb.com/title/tt0497116/">An Inconvenient Truth</a>, Chai Jing presents some shocking facts to her audience in a <a href="https://www.ted.com/talks">TED Talk</a>-style format. She documents the health implications of smog, such as its possible relationship with lung cancer, and attributes China’s smog pollution to factors including the consumption of low-grade coal and oil, the expansion of energy-intensive industries like steel, and the lack of enforcement of environmental regulations.</p>
<h2>A wake-up call?</h2>
<p>Under the Dome invites comparison with <a href="http://en.wikipedia.org/wiki/Silent_Spring">Silent Spring</a>, Rachel Carson’s 1962 exposé of the effects of pesticides, and some commentators have predicted that the documentary will <a href="http://www.businessspectator.com.au/article/2015/3/2/china/film-going-change-china">galvanise China</a> in much the same way that Carson’s book changed America. </p>
<p>There are indeed striking similarities between the two. Both focus on environmental issues of huge concern to their respective societies; both were made by women with national reputations for their previous work; and both spurred unprecedented national discussions. </p>
<p>Even China’s newly appointed environment minister Chen Jining said he was <a href="http://www.smh.com.au/world/chen-jining-chinas-environment-minister-ignores-pollution-documentary-20150308-13y5g0.html">reminded of Silent Spring</a> when watching Under the Dome – although that was before the government <a href="http://www.washingtonpost.com/world/china-wants-cleaner-air--without-an-environmental-movement/2015/03/15/8e34c738-c8b6-11e4-bea5-b893e7ac3fb3_story.html">abruptly changed its mind about the documentary</a>. </p>
<p>For all their similarities, there are still many hurdles facing the documentary that Carson’s book did not experience.</p>
<h2>The social context</h2>
<p>China is undergoing significant social change, with a growing middle class who are more concerned with quality of life than basic needs, and who are willing to raise their voice over issues that affect their health. This is a similar context to the postwar America in which Silent Spring was published.</p>
<p>Yet today’s world is also more globalised than in 1962, a fact that could have two opposite effects on China’s environmental movement. </p>
<p>On one hand, the potential solutions to global issues such as climate change, and local issues such as air pollution, may feed into each other. As my colleague and I have <a href="https://theconversation.com/china-shows-theres-more-to-renewable-energy-than-fighting-climate-change-31471">argued</a>, concern over China’s energy security has become a key driver of its renewable energy industry.</p>
<p>But on the other hand, globalisation has made people more mobile, both within and between countries. Migration has become an option for some Chinese to escape the smog, which might reduce their motivation to engage in the local environmental movement.</p>
<h2>Differing political climates</h2>
<p>In many ways, the reception given to Under the Dome is broadly similar to that received by Silent Spring. Both were challenged by economic interests, such as the chemical industry in the case of pesticides, and fossil fuel firms in the case of smog. Both were also criticised for a perceived lack of <a href="http://www.ftchinese.com/story/001060997?full=y">“balance”</a> or author <a href="http://www.wusuobuneng.com/archives/17615">expertise</a>, and were even accused of being <a href="http://www.slate.com/articles/health_and_science/science/2012/09/silent_spring_turns_50_biographer_william_souder_clears_up_myths_about_rachel_carson_.single.html">political conspiracies</a>.</p>
<p>Both were also praised by the scientific community. Silent Spring’s legacy was <a href="http://www.acs.org/content/acs/en/education/whatischemistry/landmarks/rachel-carson-silent-spring.html">honoured by the American Chemical Society in 2012</a>, while a Chinese professor <a href="http://blog.sciencenet.cn/blog-57940-871798.html">blogged</a> about Under the Dome: </p>
<blockquote>
<p>… [compared with Chai Jing] we experts in the field of environmental protection and scientists on the smog research should feel ashamed for our incompetence to communicate with the public and our lack of courage to expose the problem. </p>
</blockquote>
<p>But perhaps the most important difference is in how the two respective governments reacted, especially given that both the book and the documentary broadly chimed with what authorities were trying to do at the time. Silent Spring was published when the then US president John F. Kennedy was implementing his <a href="http://www.ushistory.org/us/56b.asp">New Frontier</a> program, and Under the Dome has arrived while the Chinese leadership is commmitting to an “<a href="http://news.xinhuanet.com/english/china/2014-06/13/c_133405882.htm">energy revolution</a>”. </p>
<p>Several key ideas advocated in Under the Dome to fight smog are aligned with the government’s agenda, such as reducing the share of fossil fuels in the country’s energy supply, and increasing the share of renewable energy sources. </p>
<p>This may partly explain why the documentary was first released on the website of <a href="http://en.people.cn/">People’s Daily</a>, the official newspaper of the Communist Party, and why the resulting media and online criticisms of the government’s handling of the smog issue were initially tolerated despite such comments usually being closely monitored and censored by the state. </p>
<p>However, after a week of explosive discussion in the public sphere, the documentary was taken down from all Chinese websites. While the smog issue was a topic of frequent discussion during the annual session of the <a href="http://www.npc.gov.cn/englishnpc/news/">National People’s Congress</a>, held in this same week, Chai Jing and her documentary were rarely mentioned by any representatives or government officials. </p>
<p>Contrast that with the policy response triggered by Silent Spring, including the appointment of the <a href="http://www.jfklibrary.org/Asset-Viewer/Archives/JFKPOF-087-003.aspx">President’s Science Advisory Committee</a>, hearings on the issue in the Senate, and the establishment of the <a href="http://www.epa.gov/">US Environmental Protection Agency</a>. </p>
<p>The Chinese government seems to fear that grassroots movements may undermine its legitimacy in ruling the country. It has implemented a range of <a href="http://www.ids.ac.uk/opinion/greening-china-tackling-bad-industrial-policies-should-be-a-priority">policies</a> to transform China’s energy system, but the effectiveness of those policies are yet to be seen.</p>
<p>The legacy of Silent Spring is beyond question. Whether Under the Dome gets the chance to have a similarly lasting impact is far from clear.</p><img src="https://counter.theconversation.com/content/38604/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Hao Tan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Under the Dome, a hugely popular online documentary about China’s smog crisis, could be as influential as 1962’s US pesticide exposé Silent Spring - but only if Chinese officials allow debate to flourish.Hao Tan, Senior Lecturer, Faculty of Business and Law, University of NewcastleLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/357062015-01-21T10:59:53Z2015-01-21T10:59:53ZPresident Xi’s Chinese dream means a more multi-polar world<p>China begins 2015 as <a href="http://www.marketwatch.com/story/its-official-america-is-now-no-2-2014-12-04">the world’s largest economy</a>, in terms of purchasing power parity, a key milestone in the country’s rise. And one that likely will herald a change in how China engages with the rest of the world. </p>
<p>For now, President Xi Jinping’s focus is domestic. He says he wants to bring about the rejuvenation of the Chinese nation to allow it to take its rightful place in the world. His aims include the improvement of his people’s livelihood through better education and healthcare services, more stable employment, a cleaner environment, less corruption and a stronger military. </p>
<p>So what does President Xi’s dream mean in terms of China’s global aspirations, beyond carrying through an historic renaissance to see his nation receive the respect he clearly feels it deserves? </p>
<h2>China’s uncomfortable perch</h2>
<p>Historically, the ascent of a nation and its economy to the top of the heap has led to a major realignment of global power relations, with former dominant powers struggling to accommodate the new entrant.</p>
<p>But it’s China itself that has been perhaps the most uncomfortable ascending to the top spot, <a href="http://english.cntv.cn/2014/05/06/VIDE1399365600960880.shtml">disputing the statistics</a> and keeping the information largely hidden from its own population. A strange response from such a proud nation, but an understandable one. </p>
<p>First, acceptance might cause other nations to push China to contribute more to global public goods, such as peacekeeping and disease control. It’s a reasonable concern. The US attitude was <a href="http://sinosphere.blogs.nytimes.com/2014/08/13/obamas-free-rider-comment-draws-chinese-criticism/?_r=0">summed up by President Barack Obama himself</a> last August. </p>
<p>“They are free riders,” he said, noting that they had been doing so for the past 30 years. “It has worked really well for them.”</p>
<p>It should be kept in mind that China is still a relatively poor country with a <a href="http://www.forbes.com/sites/kenrapoza/2013/02/23/china-on-the-road-to-high-income-country-status/">per capita income of about $12,000</a>, compared with $53,000 in the US. </p>
<p>Second, domestic nationalist sentiment is strong and might pressure the Chinese leadership to expand global political power to match its economic prowess in ways that may antagonize other nations such as the US.</p>
<p>Third, historically, attempts by the Chinese Communist Party to engage in global governance have not been successful – at least in the past. It was not, for example, able to build a coalition of developing nations to counteract the Soviet Union and the US during the Cold War and its support for guerrilla movements in Southeast Asia set back ties with those countries for many years.</p>
<h2>Ascent forcing fundamental changes</h2>
<p>The unprecedented level of China’s integration into the global economy, energy markets and foreign reserves accumulation, its role in climate change and other environmental challenges are now forcing fundamental changes in its relatively passive and low-key international position. </p>
<p>Slowly, the contours of a new Chinese policy are becoming apparent. In December, <a href="http://news.xinhuanet.com/english/china/2014-12/06/c_133837015.htm">President Xi said</a> that it was important to “inject more Chinese elements into international rules.” This does not mean that China is intending to change dramatically the current global order or confront US supremacy. </p>
<p>Vice Premier Wang Yang made this clear in his <a href="http://www.thechicagocouncil.org/event/us-china-shared-vision-global-economic-partnership">own December speech</a> when he stated: “China and the US are global economic partners, but America is the guide of the world… China is willing to join the system and respect those rules and hopes to play a constructive role.” </p>
<p>Of course, China has already joined the system and is a major beneficiary, but playing a “constructive role” may imply that China will pursue its own interests and hope to influence global policy making and institutions more in the future. One suspects that the country still yearns for a multi-polar rather than unilateral world order. The search for a beneficial partnership with the US was clear in Xi’s phrase of seeking a “new type of great power relationship.” </p>
<h2>Seeking fruitful collaboration</h2>
<p>Indeed there are many areas where collaboration will be fruitful: in terms of security, both countries want a stable Middle East, Iraq and Afghanistan and a non-nuclear Korean Peninsula. There are substantial other areas for cooperation: climate change and environmental protection, drug smuggling, trafficking in women, preventing the spread of infectious diseases to name just a few. </p>
<p>At the same time, China will not just sit on the sidelines and watch the US pursue its own interests where they might conflict. </p>
<p>China clearly sees itself as the dominant power in East Asia, and its trade and investment policies clearly support this. The recent creation of the Asian Infrastructure Bank, which is expected to spend billions investing in the region, promotes this objective. </p>
<p>As does the Shanghai-based New Development Bank, under the auspices of the BRICS – a term referring to the (once) fast-growing economies of Brazil, Russia, India and China. Its formation shows that it is willing to promote development funding outside of the old World Bank framework, to the <a href="http://www.nytimes.com/2014/10/10/world/asia/chinas-plan-for-regional-development-bank-runs-into-us-opposition.html">consternation of the US</a>. </p>
<p>The <a href="http://csis.org/files/media/csis/pubs/080916_cbs_1_foreignpolicyf.pdf">overriding priority of China’s foreign policy</a> is to maintain a peaceful international environment that will allow it to focus on its domestic agenda. However, this is becoming increasingly difficult. The country is defending its territorial claims more forcefully. It has become a major trade and investment partner of many countries in the region. Finally, China is also a major exporter of pollution and, together with the US, a key contributor to global warming. </p>
<p>One challenge for China as it goes global is that it retains an outdated notion of sovereignty. In short, what China wants is an economic order that is international in terms of the benefits it brings but not necessarily global if that involves compromising national decision-making. </p>
<h2>Equal partner or grumpy one?</h2>
<p>Ultimately, China needs to be able to feel comfortable with a framework for international governance in which it is an increasingly important player. In turn, other major nations need to incorporate China as a more equal partner and to build its reasonable concerns into the architecture of international governance. </p>
<p>China, for its part, must reduce its suspicion of hostile foreign intent and adjust its outdated notion of sovereignty to accept that some issues need transnational solutions and that international monitoring does not have to erode the Communist Party’s power. Without accommodation on both sides, China will continue to appear as a rather grumpy, unpredictable player on the international scene, rather than achieve the ultimate aims of President Xi’s dream.</p><img src="https://counter.theconversation.com/content/35706/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Anthony Saich does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>China begins 2015 as the world’s largest economy, in terms of purchasing power parity, a key milestone in the country’s rise. And one that likely will herald a change in how China engages with the rest…Anthony Saich, Professor of International Affairs, Harvard UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/353742014-12-15T01:56:31Z2014-12-15T01:56:31ZAustralia comes in from the cold as Lima deal leaves lots to do<p>The world is a step closer to a new climate agreement that will see all countries, not just developed ones, take action on greenhouse emissions after 2020. The two-week <a href="https://theconversation.com/au/topics/lima-climate-summit">Lima climate summit</a>, which ran two days beyond its scheduled Friday finish, was a reminder of just how hard it is to get all countries on board. But the process is largely on track, and Australia will be under scrutiny to come up with a meaningful post-2020 emissions target.</p>
<p>The <a href="http://unfccc.int/resource/docs/2014/cop20/eng/l14.pdf">Lima agreement</a> asks countries to set out their climate pledges early next year. Yet it leaves wriggle-room for countries to submit late in the process and stops short of requiring countries to submit quantitative emissions targets. It also leaves many issues open, with time pressure rising to agree a deal by next December’s talks in Paris.</p>
<h2>Detailed pledges</h2>
<p>All countries will now be expected to provide details of their “intended nationally determined contribution” (iNDC) to global climate action, as agreed a year ago at the Warsaw conference. But the Lima text says that iNDCs “may” contain quantitative emissions targets, not that they have to. This is at the insistence of developing countries.</p>
<p>Previously there was an expectation that countries would table their pledges by the end of May 2015, followed by a <a href="http://unfccc.int/resource/docs/2014/adp2/eng/6nonpap.pdf">review process and consultations</a>. But countries are simply called on to deliver their pledges “well in advance”, with just a synthesis report prepared by the United Nations.</p>
<p>This may not affect what most countries do, because Europe, the United States and China have already revealed their national <a href="http://www.eastasiaforum.org/2014/11/17/us-china-agreement-presages-a-change-in-the-air/">emissions targets</a> for 2025 or 2030. This creates substantial pressure for others to follow suit. </p>
<h2>‘Fair, ambitious and in light of circumstances’</h2>
<p>Each country is called on to explain how its pledge is “fair and ambitious, in light of its national circumstances, and how it contributes towards achieving the objective of the Convention”. This will work to increase countries’ ambition and help show up any contributions that may be inadequate. </p>
<p>The text also notes the large gap between existing targets (for 2020) and the ambition to limit global warming to 2C, or indeed 1.5C. The forthcoming post-2020 pledges may well reveal an even greater gap between the agreed global warming goal and what individual countries are willing to commit themselves to.</p>
<p>The Lima conference also left some hard issues unresolved, in particular how to scale up climate finance. The <a href="http://unfccc.int/meetings/copenhagen_dec_2009/items/5262.php">2009 Copenhagen Accord</a> promised to deliver US$100 billion dollars a year to help developing countries deal with climate change. There is still no hint of whether and how the world will get there. This is worrying, especially to the poorest countries.</p>
<h1>Dropping the ‘developed/developing’ divide</h1>
<p>The most important task in global climate policy – and the hardest – is to get more climate action in developing countries. </p>
<p>The poorer countries would not accept a deal that puts the same onus on them as on rich countries. They point to the vastly higher capacity of rich countries, the fact that developed countries are responsible for the bulk of historic greenhouse emissions, and the expectation that climate change will hit poor people and regions harder. </p>
<p>This is why the principle of “common but differentiated responsibilities” is a pillar of the original 1992 <a href="http://unfccc.int/essential_background/convention/items/6036.php">UN Framework Convention on Climate Change</a>. Traditionally, countries were split into two groups, with only developed nations required to cut emissions.</p>
<p>Things are no longer so black-and-white. The 2009 Copenhagen Accord was already accompanied by emissions pledges from developed and developing countries. Now, the expression “in light of its national circumstances” from Lima could be a game-changer. No longer is there a strict distinction of two groups of countries. </p>
<p>The central recognition of differing circumstances will encourage countries to make nuanced pledges. And it could facilitate strong ambition from some developing countries without being seen to break ranks with others who feel they cannot go as quickly or as far. </p>
<p>China’s <a href="https://theconversation.com/us-china-climate-deal-at-last-a-real-game-changer-on-emissions-34148">pledge not to grow its emissions beyond 2030</a> is significant. China sees <a href="https://ccep.crawford.anu.edu.au/publication/ccep-working-paper/4532/reaping-economic-benefits-decarbonization-china">economic opportunities</a> in low-carbon growth. </p>
<p>A recent Chinese report under the <a href="http://newclimateeconomy.report/country-cases/china/">New Climate Economy</a> project spelt out that “China will lead the world to by providing a blueprint for a new climate economy”. China is setting out to create an example for other industrializing countries to follow. </p>
<p>Countries further down the income scale will also take inspiration from this. As the global <a href="http://unsdsn.org/what-we-do/deep-decarbonization-pathways/">Deep Decarbonization Pathways</a> analysis has shown, all major countries could readily and drastically cut the carbon intensity of their energy systems. Current low-income countries do not need to go through the high-carbon phase that defined most industrialized countries’ economies. But they will need extra up-front investment in greener technology.</p>
<h1>Australia’s re-engagement on climate change</h1>
<p>Presumed inaction in China, the United States and elsewhere has long been the staple argument by those in Australia who oppose strong action to cut emissions. That argument is demonstrably wrong, and over recent weeks we have seen the Australian government re-engage with global climate policy.</p>
<p>Just two months ago, Prime Minister Tony Abbott declared coal to be “<a href="http://www.abc.net.au/news/2014-10-13/coal-is-good-for-humanity-pm-tony-abbott-says/5810244">good for humanity</a>”, while refusing to contribute to the <a href="http://news.gcfund.org/">Green Climate Fund</a>. It was not certain that Australia would pledge any meaningful emissions cuts beyond 2020. </p>
<p>Now the PM <a href="http://www.smh.com.au/comment/abbott-decides-that-climate-change-thing-needs-a-dust-after-all-20141120-11qe4n.html">has changed his stance</a>, saying: “We all are doing what we can, Australia as well, and we need a strong and effective agreement from Paris next year”. Australia has pledged <a href="https://theconversation.com/australias-200-million-climate-pledge-falls-short-of-its-true-debt-35318">A$200 million to the Green Climate Fund</a>. A <a href="https://www.pm.gov.au/media/2014-12-10/assisting-global-response-climate-change">task force</a> is to be set up in the department of Prime Minister and Cabinet to work on Australia’s emissions pledge, giving the issue more prominence in Canberra’s policy machinery.</p>
<p>Thus an untenable policy position has crumbled under international pressure. It took a lot to get there: the <a href="http://www.eastasiaforum.org/2014/11/17/us-china-agreement-presages-a-change-in-the-air/">joint US-China emissions announcement</a>, a <a href="http://www.couriermail.com.au/news/queensland/us-president-barack-obamas-brisbane-speech-at-the-university-of-queensland/story-fnmd7bxx-1227124334189?nk=6cc779405575c34a8631b0b6276834ff">blunt speech</a> by US President Barack Obama in Brisbane, and a direct <a href="http://reneweconomy.com.au/2014/china-castigates-australia-over-lack-of-climate-finance-74281">rebuke from China</a> over climate finance. </p>
<p>Foreign Minister Julie Bishop heralded the change, insisting on going to Lima <a href="http://www.smh.com.au/federal-politics/political-news/julie-bishop-outflanks-prime-minister-tony-abbott-on-climate-change-conference-20141208-122ug0.html">in defiance of orders from the PM’s office</a>. Bishop would be particularly aware of the repercussions of a recalcitrant stance on climate change, and is clearly in no mood to let the climate issue further blemish Australia’s international standing. </p>
<h2>Australia’s Lima performance</h2>
<p>Three aspects of Australian government announcements and pronouncements at Lima stand out.</p>
<p>First, Australia’s <a href="http://www.smh.com.au/national/public-service/no-tipping-please-australias-contradictory-stance-on-the-un-climate-fund-20141201-11v6au.html">pledge</a> of A$200 million to the climate fund. Compared with the US pledge of <a href="http://mobile.nytimes.com/2014/11/15/us/politics/obama-climate-change-fund-3-billion-announcement.html?referrer=&_r=1">US$3 billion</a> (A$3.65 billion) and Canada’s <a href="http://news.gcfund.org/wp-content/uploads/2014/11/release_GCF_2014_11_21_canada_pledge.pdf">CAN$300 million</a> (A$315 million), and given that Australia is now among the world’s richest countries and the highest per capita emitter, this is at the low end of what Australia can get away with, but nevertheless an important signal of good faith. </p>
<p>Second, comments on China. Bishop initially claimed that China’s pledge to stop growing its emissions by 2030 was “<a href="http://www.smh.com.au/environment/peru-climate-talks-drift-off-target-as-bishop-flies-in-20141206-121n2b.html">business as usual</a>”, but later qualified that assessment. Most <a href="http://globalchange.mit.edu/CECP/files/document/MITJPSPGC_Rpt267.pdf">analyses</a> find that peak carbon by 2030 is achievable but requires <a href="http://www.igbp.net/download/18.950c2fa1495db7081e39a/1417614685689/NL83-china_emissions.pdf">strong policies</a> to cut coal use and power consumption. It’s certainly <a href="https://theconversation.com/factcheck-does-the-new-climate-deal-let-china-do-nothing-for-16-years-34239">not ‘doing nothing until 2030’</a>. <a href="http://press.anu.edu.au/wp-content/uploads/2014/07/ch09.pdf">Policy action</a> to improve energy efficiency, cut coal use and increase renewable power has been underway for some time. </p>
<p>Third, the <a href="http://www.abc.net.au/news/2014-12-09/greens-question-bishops-call-for-legally-binding-carbon-targets/5955194">call by Australia</a> for next year’s Paris agreement to feature legally binding emissions targets. Curiously, Australia echoes the European position on this, which is widely seen as an ambit claim. There is <a href="https://theconversation.com/legally-binding-demands-are-still-the-biggest-climate-dealbreaker-35429">no realistic prospect of legally binding targets</a>, because the US Congress would not ratify such a treaty, and China will not do so without the United States. In any case, legal bindingness at the international level is not needed to achieve national action.</p>
<p>So why would Australia call for binding targets? Given the overall reluctant stance on climate policy, the most plausible explanation is that the government wants to be able to dismiss the Paris agreement because targets will not be binding. </p>
<p>Whatever the rhetoric, Australia will be expected to deliver an emissions target for 2025 or 2030. It will be scrutinised at home and abroad. The first point of comparison will be the <a href="http://www.whitehouse.gov/the-press-office/2014/11/11/fact-sheet-us-china-joint-announcement-climate-change-and-clean-energy-c">US pledge of a 26-28% reduction by 2025 compared to 2005</a>. </p>
<p>The US 2025 pledge is not a sufficient contribution to a global outcome of keeping warming below 2C, and there is a <a href="http://climateinstitute.org.au/articles/media-releases/progress-in-lima-puts-spotlight-on-australias-post-2020-targets.html/section/397">strong argument</a> for Australia to make a contribution that is in line with strong global climate action. The <a href="http://www.climatechangeauthority.gov.au/reviews/targets-and-progress-review-3">Climate Change Authority</a> sees a proportional contribution to a 2C outcome as a 30-40% reduction at 2025 relative to 2000 (about 35-45% relative to 2005).</p>
<p>In any case, the US target will be a crucial reference point for Australia’s post-2020 target. Australia is richer, has higher per capita emissions and is more vulnerable to climate change than the United States. </p>
<p>It would be difficult to justify an Australian pledge that is weaker than America’s.</p><img src="https://counter.theconversation.com/content/35374/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Frank Jotzo receives funding from the Australian Research Council and co-ordinates a research program partially funded by the Australian government.</span></em></p>The world is a step closer to a new climate agreement that will see all countries, not just developed ones, take action on greenhouse emissions after 2020. The two-week Lima climate summit, which ran two…Frank Jotzo, Director, Centre for Climate Economics and Policy, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/352432014-12-09T19:38:20Z2014-12-09T19:38:20ZChina-Australia doomsayers overlook strong fundamentals<p>Pop quiz: in 2014 the quantity of Australian iron ore demanded by China has: a) fallen sharply, b) fallen modestly, c) remained the same, d) increased modestly, e) increased sharply?</p>
<p>The answer in just a moment.</p>
<p>Last week the Australian Bureau of Statistics (ABS) told us that the economy is suffering from an <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/ProductsbyReleaseDate/52AFA5FD696482CACA25768D0021E2C7?OpenDocument">income recession</a>. Our exports aren’t fetching the prices they used to – the terms of trade are down by around 9% for the year - and that means we can’t afford to buy as much from overseas as before.</p>
<p>Growth in China has also <a href="http://www.afr.com/p/world/china_growth_slows_from_rail_to_GPWU3X58iAOG5SvvMgNi9L">slowed</a> and the construction industry there is in the middle of a major funk. Moreover, China’s economy is rebalancing away from growth led by resources-hungry investment.</p>
<p><a href="http://www.smh.com.au/world/chinas-slump-will-hurt-australian-incomes-and-the-pain-is-likely-to-linger-20141205-11zy1z.html">Joining the dots</a> is proving irresistible. But there’s a problem with this story, and it’s a big one.</p>
<p>The answer to the above question is unambiguously option e. In the September quarter – that’s the same quarter Australia shifted into an income recession - exports of iron ore to China were <a href="http://www.bree.gov.au/files/files//publications/crq/westpacbree-crq-201411.pdf">up 33% from a year earlier</a>, according to Westpac and the Bureau of Energy and Resources Economics (BREE). This followed a 32% jump the first quarter and a 36% leap in the second. </p>
<p>These are extraordinary numbers and we should not be at all surprised when they start to slow. But, for now, Chinese demand continues unabated.</p>
<p>In a sense this is not difficult to understand. The law of demand says that when the price falls, the quantity demanded will increase. The price of iron ore is down nearly 50% since the beginning of the year. </p>
<p>And while growth in China is now 7.3%, the slowest pace in five years, that’s coming off an ever-larger base. In terms of the number of dollars being added to the economy each year, 7.3% growth now is more than a match for 8% a couple years ago.</p>
<h2>Watch the miners</h2>
<p>If the price has fallen and the quantity traded has increased, there can be only one culprit – a dramatic increase in supply. And so there has been: BHP Billiton alone is in the midst of a 65 million tonne per annum <a href="http://www.bhpbilliton.com/home/investors/reports/Documents/2014/141006_IronOreBriefingandWesternAustraliaIronOreSiteTour.pdf">expansion</a> of its Western Australian iron ore operations.</p>
<p>Treasurer Joe Hockey may be worried about falling iron ore prices but BHP Billiton certainly isn’t. Even with iron ore prices sitting as they are between A$70 and $80 per tonne, the business remains hugely profitable. Its current cost of supply is around A$27 per tonne and the target is less than $20 in the medium term. Producers in other sectors of the economy would kill for those sorts of margins.</p>
<p>While it’s become popular to dismiss the projections for Chinese demand from the miners themselves as being overly optimistic – why exactly is not clear. Remember, it’s their billions of investment dollars on the line - and <a href="http://www.treasury.gov.au/%7E/media/Treasury/Publications%20and%20Media/Publications/2014/Long%20run%20forecasts%20of%20Australias%20terms%20of%20trade/Documents/PDF/long_run_tot.ashx">forecasts</a> offered by the Commonwealth Treasury in May based on an analysis of demand and supply fundamentals are proving remarkably accurate. In reference to iron ore they concluded that “… supply will increase at a much faster rate than demand…” and that “The shift of production to the flatter section of the supply curve is expected to cause a rapid fall in the real price…”</p>
<p>These dynamics will play out until 2017-2018. From then on, the price will stabilise at a touch above $70 per tonne. There’s little to worry about here.</p>
<p>The bottom line in all of this is that the impact of China on the Australian economy remains a tremendously good news story. According to the latest <a href="http://www.abs.gov.au/ausstats/abs@.nsf/mf/5368.0">trade data</a> from the ABS, the value of our exports to China is more than double that to our second-largest customer, Japan. This ratio holds true across the board - agriculture, fuels and minerals, services and even manufactured goods.</p>
<p>None of this is expected to change any time soon. China is the world’s second-largest economy and the International Monetary Fund continues to <a href="http://www.imf.org/external/pubs/ft/weo/2014/02/">forecast</a> that it will grow by 7.4% this year and 7.1% next year. That growth in 2015 is more than double that predicted for the US and nearly nine times that for Japan. There’s always room to quibble about the exact numbers but few would disagree that China will continue to outperform other major economies.</p>
<p>For the Australian economy it doesn’t get much better than that.</p><img src="https://counter.theconversation.com/content/35243/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>James Laurenceson does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Pop quiz: in 2014 the quantity of Australian iron ore demanded by China has: a) fallen sharply, b) fallen modestly, c) remained the same, d) increased modestly, e) increased sharply? The answer in just…James Laurenceson, Deputy Director and Professor, Australia-China Relations Institute (ACRI), University of Technology SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/339662014-11-10T10:39:40Z2014-11-10T10:39:40ZIs Hong Kong China’s future?<p>The media spotlight has shifted away from Hong Kong and toward President Obama’s visit to Beijing, but students and activists remain in Admiralty and Mong Kok, and their demands for political change have not softened. </p>
<p>It seems highly unlikely that they will gain the specific goal they have set for themselves – a more open nominating process for the 2017 election of the region’s Chief Executive – but they might achieve something greater by reminding the rising urban Chinese middle class that human dignity is something more than material comfort, that it resides in an active and autonomous political life. </p>
<h2>The forging of a distinct identity</h2>
<p>There are, of course, significant social and cultural and political differences between Hong Kong and the People’s Republic of China (PRC). <a href="http://www.foreignaffairs.com/articles/142143/jeffrey-wasserstrom/no-tiananmen-redux">Hong Kong 2014 is not Beijing 1989</a>. Indeed, it is precisely those differences that have generated a sense of a distinct <a href="http://www.nytimes.com/2014/10/08/world/asia/hong-kong-people-looking-in-mirror-see-fading-chinese-identity.html?_r=0">“Hong Kong people” identity</a>. </p>
<p>Since Hong Kong shifted, in 1997, from British colony to “Special Administrative Region” of the PRC, a significant portion of the population has grown more distrustful of the power of the Chinese Communist Party (CCP). This suspicion has been produced, in large part, by actions taken by the Hong Kong government, whose Chief Executive is selected indirectly by Beijing. </p>
<p>In 2003, a massive demonstration swept across the supposedly apolitical city, when the Hong Kong government attempted, at the beck and call of Beijing, to promulgate an “anti-subversion law,” which would have eroded the civil liberties Hong Kong people had grown accustomed to. <a href="http://www.vox.com/2014/9/29/6864181/hong-kong-protest-china-wasserstrom">In the face of public pressure, the bill was tabled. </a></p>
<p>In 2012, once again Hong Kong people resisted the efforts of the CCP leadership to rein in freedom of expression and thought, this time in relation to a proposed “<a href="http://www.nytimes.com/2012/09/09/world/asia/amid-protest-hong-kong-backs-down-on-moral-education-plan.html">moral and national education</a>” curriculum that the local government had attempted to impose on primary and secondary schools. And once again the government had to back down.</p>
<p>Thus, while there is certainly a <a href="http://www.spectator.co.uk/features/9329862/hong-kong-vs-china/">cultural component</a> to Hong Kong identity, and <a href="http://chinadigitaltimes.net/2014/10/economic-inequality-underlies-hong-kong-protests/">economic grievances</a> also play a role in the current protests, it is clear that many people there embrace liberal political values as fundamental to their public life. Civil rights and freedoms are central to what it means to be a Hong Kong person.</p>
<h2>Do not mention civil society</h2>
<p>In that regard, Hong Kong people are similar to others in advanced industrial countries around the world, not just in Europe and North America, but also in East Asia. Although political liberalism can take a variety of forms, and give rise to an array of constitutional structures, its core values are reinforced by the dynamism of relatively open and prosperous economies. </p>
<p>And that is one thing that <a href="http://www.newstatesman.com/politics/2014/10/hong-kongs-pro-democracy-movement-challenge-all-asias-autocrats">unnerves CCP leaders</a> in Beijing when confronted by Hong Kong’s defense of civil liberties. The PRC has benefitted greatly these past four decades from the “reform and opening” of its economy. Its society and culture are changing at breakneck speed. In some regards, China could follow the democratizing path blazed by South Korea, Taiwan, and Indonesia. But the ruling Party works hard to limit the political implications of economic and social transformation.</p>
<p>“Peaceful evolution,” the idea that modernization will bring Westernization and the gradual transformation of the PRC into a liberal multi-party democracy, has been a target of CCP ideological struggle since the 1980s. <a href="http://online.wsj.com/articles/SB10001424052702303755504579207070196382560">The fall of the Soviet Union</a> still haunts Beijing. Last year, the Party warned against the “<a href="http://thediplomat.com/2014/08/chinas-political-spectrum-under-xi-jinping/">seven do not mentions,” which include</a>: “democracy, universal values, civil society, market liberalism, media independence, criticizing errors in the history of the Party (‘historical nihilism’), and questioning the policy of opening up and reforms and the socialist nature of the regime.”</p>
<p>All of those things are not only mentioned in Hong Kong, but most are practiced vigorously. </p>
<h2>Single party rule vs. liberalization</h2>
<p>So as the Party leadership in Beijing endeavors to maintain single party rule within an increasingly dynamic and individualizing society and economy on the mainland, Hong Kong activists publicly and dramatically demand greater political liberalization. This was not what Deng Xiaoping had envisioned as “<a href="http://www.nytimes.com/2014/09/30/world/asia/the-hong-kong-protests-what-you-should-know.html">one country, two systems</a>.”</p>
<p>At its core the “umbrella movement” – so named for the use of umbrellas to ward off pepper spray and tear gas – seeks wider democracy in Hong Kong as a means of popular middle class representation against a political system dominated by tycoons and bureaucrats.</p>
<p>And that is something that could eventually inspire the emerging middle class in China. Political change of some sort is necessary. Growing inequality, continuing official corruption, <a href="http://www.theguardian.com/world/2014/oct/16/china-construction-workers-burn-to-death-land-dispute">violent struggles over land rights</a> and other problems strain the existing authoritarian power structure. </p>
<p>Not too long ago, retiring <a href="http://blogs.wsj.com/chinarealtime/2012/04/06/wen-jiabaos-reform-push-more-than-just-political-theater/">Prime Minister Wen Jiabao called for “political reform”</a> to avert economic stagnation and social breakdown. </p>
<p>Obviously, that is not happening now. President Xi Jinping is more of a power centralizer than a political reformer. And Hong Kong is not, for many PRC people, an appealing political model . Quite to the contrary, a steady stream of <a href="http://www.foreignpolicy.com/articles/2014/10/01/in_chinese_mainland_shrugs_and_sneers_for_hong_kong_protesters">commentary in the controlled Chinese media</a> portrays Hong Kong activists as spoiled children, ungrateful for the benefits bestowed upon them by a benevolent CCP leadership.</p>
<p>That could change, however. As economic growth <a href="http://www.reuters.com/article/2014/11/08/us-china-economy-trade-idUSKBN0IS02Y20141108">slows</a> in China, and social problems persist, well-educated yet unemployed and politically frustrated middle class youth there might look again at what their Hong Kong brethren have wrought. </p>
<p>In time, the Hong Kong umbrella might prove to be valuable when the political rain falls in Beijing.</p><img src="https://counter.theconversation.com/content/33966/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sam Crane does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The media spotlight has shifted away from Hong Kong and toward President Obama’s visit to Beijing, but students and activists remain in Admiralty and Mong Kok, and their demands for political change have…Sam Crane, Chair and W. Van Alan Clark '41 Third Century Professor in the Social Sciences, Williams College, Williams CollegeLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/334362014-11-10T10:32:45Z2014-11-10T10:32:45ZChina’s development bank plans test rising power’s strategic shift<p>In an influential speech in 2005, then-US deputy secretary of state Robert Zoellick called on China to become a “responsible stakeholder” in the international community. To optimists, China’s recent efforts in creating high-profile international development banks shows that it is gradually embracing that role. </p>
<p>China signed an agreement in July with the four other BRICS countries – Brazil, Russia, India and South Africa – to create the <a href="http://thediplomat.com/2014/07/the-brics-bank-and-chinas-economic-statecraft/">New Development Bank (NDB)</a> to provide loans and liquidity to member nations. Just three months later, Beijing pioneered the effort to create an Asian Infrastructure Investment Bank (AIIB) to finance development projects in the region. Twenty-one nations as diverse as Qatar, India, Singapore, Thailand and most recently Indonesia signed on as founding members. China plans to provide the majority of the capital required to finance the new bank’s operations, with the headquarters located in Beijing.</p>
<p>The US and its allies view the China-backed AIIB with deep suspicion. It is an <a href="http://www.nytimes.com/2014/10/10/world/asia/chinas-plan-for-regional-development-bank-runs-into-us-opposition.html?_r=0">open secret</a> that Washington has successfully pressured Australia and South Korea to refrain from joining the new development bank. What explains such hostility toward the Chinese effort to take a larger role in regional and global governance? </p>
<h2>The US$8 trillion gap</h2>
<p>After all, there will be an US$8 trillion infrastructure investment gap in Asia and the Pacific in the next 10 years, or <a href="http://www.pwc.com/sg/en/capital-projects-infrastructure/assets/cpi-develop-infrastructure-in-ap-201405.pdf">US$800 billion each year</a>. The Asian Development Bank (ADB), the leading such lender in the region, only grants US$13 billion of new loans each year. The AIIB has the potential to help address this huge investment gap. Officially, skeptics of the AIIB focus on the issue of governance (that is, a concern that AIIB loans will not be tied to improvements in labor and environmental standards) when asked to explain their reservations toward the new mega-bank. </p>
<p>This is not the only reason, however. To understand why the creation of the new China-backed international mega-bank is so disconcerting to many, we need to examine the four international political consequences associated with the creation of the AIIB.</p>
<h2>China’s economic statecraft</h2>
<p>First, the AIIB can strengthen Beijing’s economic influence in Asia, which can then be leveraged to affect the foreign policies of nations in the region. Beijing has a long history of relying on its economic clout to further its international political objectives. In 2012, then-Chinese President Hu Jintao visited Cambodia’s Prime Minister Hun Sen and <a href="http://online.wsj%20.com/news/articles/SB10001424052702303919504577524133983292716">signed a series</a> of bilateral trade and aid agreements right before the ASEAN summit that year. During the summit, the ASEAN nations failed to issue a common communique – which is unprecedented – due to Cambodia’s unwillingness to include any statement that might embarrass China. The list goes on. </p>
<p>That same year, China <a href="http://www.asiasentinel.com/society/the-china-philippine-banana-war/">restricted banana imports</a> from the Philippines in response to the two nations’ naval stand-off over the Scarborough Shoals. In 2011, China stopped shipments of <a href="http://www.nytimes.com/2010/09/24/business/global/24rare.html">rare earth metals</a> to Japan in response to its dispute over the Diaoyu/Senkaku Islands. It’s possible that Beijing would leverage its influence in the AIIB to entice developing member nations to support its foreign policy agenda.</p>
<p>Second, creating the AIIB undermines Japanese and American influence in Asia. Recent studies <a href="http://www.sciencedirect.com/science/article/pii/S0304387808000187">by Dreher et. al (2009)</a> and <a href="http://journals.cambridge.org/repo_A88W1kVC">Lim and Vreeland (2013)</a> suggest that the US and Japan use their influence in the World Bank and ADB to reward their political allies in the region. By setting up the AIIB, Beijing provides an alternative source of loans for developing nations in Asia, thereby reducing the US’s and Japan’s abilities to leverage IMF and ADB loans to entice nations to support their own foreign policy initiatives. Unsurprisingly, Japan was not even invited to sign the memorandum of understanding for the AIIB.</p>
<p>Third, the creation of the AIIB places pressure on the Western powers and Japan to revamp the governance structures of the IMF, the World Bank and the ADB. Despite China’s growing economic clout, it is accorded little influence in these cornerstone international and regional financial institutions. China’s <a href="http://www.imf.org/external/np/sec/memdir/members.aspx">share of the vote</a> in the IMF, for instance, is only one fourth of the US’s. Beijing’s backing of the AIIB sends a strong signal to the Western powers and Japan that China has outside options if existing multilateral arrangements do not evolve to reflect China’s rising economic and political influence.</p>
<p>Lastly, the creation of the AIIB provides an opportunity for Beijing to assess which nations in the region can be co-opted or pressured into supporting its foreign policy agenda (at least on the surface). A nation’s refusal to participate in the AIIB sends a strong signal to the Chinese leadership that: (1) it is a staunch US ally that requires more carrots and sticks to make it susceptible to Chinese influence; (2) it has doubts about China’s growing influence in the region. Of course, subscribing to the AIIB does not mean that a nation is an ally of China (for example, the Philippines and Vietnam), but it does signify at least superficial acceptance of Chinese leadership in Asia.</p>
<h2>From biding time to great power diplomacy</h2>
<p>Will Asia benefit from the creation of the AIIB? Most commentators have focused on explicating how AIIB loans – which are expected to be provided with little or no conditions attached – may initiate a race to the bottom among international financial institutions with regards to loan-making. This, however, is unlikely to happen given the huge infrastructure investment gap in Asia. Developing nations in the region need loans more than the international financial institutions need business. The creation of the AIIB does, however, signal an important shift in Chinese grand strategy that may create a more conflict-ridden Asia in the coming years.</p>
<p>Just ten years ago, it would be impossible to imagine that Beijing would take the lead in creating high-profile international institutions like the NDB and the AIIB. Under the slogan “conceal one’s strengths and bide one’s time” (<em>taoguang yanghui</em>), which succinctly summarizes Chinese grand strategy since Deng Xiaoping, Chinese diplomacy has been reactive and passive. This is no longer the case. The buzz word in the Chinese foreign policy circle these days is <a href="http://csis.org/files/publication/140603_Johnson_DecodingChinasEmerging_WEB.pdf">“great power diplomacy”</a> (<em>daguo waijiao</em>), a term that highlights China’s growing confidence as the pre-eminent great power, second only to the US. The creation of the AIIB should be understood in the context of a paradigm shift in Chinese grand strategy.</p><img src="https://counter.theconversation.com/content/33436/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Daniel Yew Mao LIM currently works in the Data Science Group at the Infocomm Development Authority of Singapore. All views expressed are his own and do not represent the views of the Government of Singapore.</span></em></p><p class="fine-print"><em><span>George Yin receives funding from the Tobin Project as a National Security Fellow. All views expressed are his own.</span></em></p>In an influential speech in 2005, then-US deputy secretary of state Robert Zoellick called on China to become a “responsible stakeholder” in the international community. To optimists, China’s recent efforts…Daniel Yew Mao Lim, PhD in Government, Harvard UniversityGeorge Yin, Harvard UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/264762014-07-11T10:38:37Z2014-07-11T10:38:37ZHagel speech on China’s ‘rise’ exposes hypocrisy in Washington<p>When US defence secretary Chuck Hagel recently accused China of <a href="http://www.huffingtonpost.com/2014/05/31/chuck-hagel-china_n_5422982.html">destabilising the Asia region</a> to an audience in Singapore, he knew he was preaching to the converted. China’s modern-day development is complex and multifaceted, but it is frequently boiled down to its bare elements. It is often convincingly presented, either implicitly or explicitly, as a “rising power”, which presents unique problems for others to solve. Doing so is convenient and persuasive, and politically useful.</p>
<p>“In recent months, China has undertaken destabilising, unilateral actions asserting its claims in the South China Sea,” Hagel announced at the Shangri-La Dialogue at the end of May. He was likely alluding to incidents such as China’s claim over the <a href="http://www.bbc.co.uk/news/world-asia-25062525">Senkaku/Diaoyu islands</a> in November 2013 in which it established an air defence zone without consulting others in the region. Or when a Chinese oil rig recently began <a href="http://www.bbc.co.uk/news/world-asia-27434945">drilling in disputed waters</a> near Vietnam. </p>
<p>Hagel’s words drew support from Japanese prime minister, Shinzo Abe, whose electorate is increasingly alarmed by China’s newfound wealth and capabilities. As part of its <a href="http://www.foreignpolicy.com/articles/2011/10/11/americas_pacific_century">“Pivot” to Asia</a> – the supposed <a href="http://www.chathamhouse.org/sites/files/chathamhouse/public/Research/Americas/0813pp_pivottoasia.pdf">shift of US foreign policy</a> away from Afghanistan and Iraq towards China and its neighbours – announced in late 2011, Washington has also reinforced its security ties with Australia, the Philippines, Vietnam and others. </p>
<p>Wang Guanzhong, the Chinese military’s deputy chief of general staff, publicly criticised Hagel’s message and tone, describing his words as <a href="http://online.wsj.com/articles/chinese-general-abe-hagel-speeches-provocative-toward-china-1401590684">“provocative”</a>. Yet with the knowledge that a very significant proportion of Americans, along with a number of China’s neighbours, also consider China a real or at least potential threat to US interests, Hagel knew he was on a relatively safe footing.</p>
<h2>Hagel’s hypocrisy</h2>
<p>After more than 30 years of strong and consistent economic growth, China is certainly more capable now than at any point in the last several centuries of exerting itself abroad. It occasionally acts aggressively towards its neighbours and is less transparent than it could be about its <a href="http://thediplomat.com/2013/03/what-to-make-of-chinas-defense-spending-increase/">military spending</a> in particular, which is suspected to be much higher than Beijing admits.</p>
<p>But aside from the fact that the Chinese government also acts <a href="http://www.theguardian.com/world/2014/jun/10/china-naval-exercises-rim-pacific?CMP=twt_fd&CMP=SOCxx2I">co-operatively</a>, and that when it does appear to act with aggression it is usually within the context of territorial disputes where blame can be attributed to two or more sides, Hagel’s speech exposes a strong element of hypocrisy in Washington’s attitudes and behaviour towards China. </p>
<p>The “destabilising, unilateral” actions for which Hagel denounced China should not be ignored, but they do not compare to the United States’ 2003 invasion of Iraq for example – against broad international will (apart form a small “coalition of the willing”). Indeed, the invasion <a href="http://news.bbc.co.uk/1/hi/world/middle_east/3661134.stm">was declared illegal</a> by the then UN secretary general, Kofi Annan, and to label this war as destabilising to the country and the region would be a dramatic understatement; the estimated number of civilian casualties alone since the invasion now exceeds <a href="https://www.iraqbodycount.org/">120,000</a>. The same argument can be made in the context of the disastrous war in Afghanistan and the wider “war on terror”.</p>
<p>Even the relatively low-key Pivot to Asia, which Washington argues is designed to maintain regional stability, is not unproblematic. If China were to announce its own “Pivot” to the Americas, establishing closer security ties with the United States’ neighbours, Washington would doubtless accuse China of seeking to destabilise its region. If Beijing began selling fighter jets and missile systems to Cuba and Venezuela and stationing troops in Mexico, Guatemala and Panama, many Americans would be outraged and demand an immediate response. </p>
<p>Yet not only is the US effectively pursuing a mirror image of this policy in Asia, it has been for decades since at least the close of World War II. </p>
<h2>Disrupting the international order</h2>
<p>Of course, the political contexts of the Americas and Asia are not easily comparable, and it is likely that an American presence in Asia has helped maintain relative peace there for more than half a century. Nevertheless, when American politicians criticise China for disrupting the “status quo” or the “international order” and use this line to justify heavier involvement in Asia, we must be conscious that they are describing an imposed, US-engineered order. The same politicians should ask themselves how tolerant they would be living within a Chinese-led order and how keen they would be to modify or even disrupt it. </p>
<p>The West in particular has become accustomed to the size, contours and application of American power. It is familiar and ingrained, which can make changes to it appear alien and unnerving. This is what makes terms like “status quo” and “international order” so powerful and politically useful, especially when they are presented as vulnerable to being “destabilised”. As Hagel insisted in Singapore: “The United States will not look the other way when fundamental principles of the international order are being challenged.” </p>
<p>Simplifying the issue of China’s development, so that we think of it merely as a “rising power” within a stable system or order which is now vulnerable to disruption, is useful for rallying support in the US, Japan, the Philippines and elsewhere. Yet it is also misleading. Washington’s Pivot to Asia, not to mention its recent record of unilateral and destabilising actions around the world, is evidence that international “systems” and “orders” are constantly in flux and vulnerable to manipulation by all – not least the United States itself. </p>
<p>China, like all states, is certainly guilty of disruptive behaviour but, as a “rising power”, its transgressions are frequently amplified. Hagel’s hypocrisy points to disruptive US behaviour which is viewed very differently. The US, meanwhile, can present itself as the logical defender of a known order, while simultaneously manipulating and even tearing apart that order from within. </p>
<p>Until we acknowledge the United States’ mismatched rhetoric and behaviour (and that of the West in general), overly simplistic representations of China’s “rise”, such as those recently peddled by Hagel, will continue to thrive, with almost inevitably unhelpful results.</p><img src="https://counter.theconversation.com/content/26476/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Oliver Turner does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>When US defence secretary Chuck Hagel recently accused China of destabilising the Asia region to an audience in Singapore, he knew he was preaching to the converted. China’s modern-day development is complex…Oliver Turner, Hallsworth Research Fellow in Political Economy , University of ManchesterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/255972014-04-21T20:07:26Z2014-04-21T20:07:26ZWith a bullet: China’s high-speed rail dream begins to take flight<figure><img src="https://images.theconversation.com/files/46625/original/b7mw63pm-1397709559.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C668%2C501&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">High-speed trains, such as this one on the Hangzhou-Shanghai route, will soon link China's entire urban spine from Beijing to Hong Kong.</span> <span class="attribution"><span class="source">Chris Hale</span></span></figcaption></figure><p>As a young university student, I first visited Guangzhou during the mid-1990s and found it a gloomy and unsettling place. The third world, undoubtedly.</p>
<p>When I went back again in 2010, it was transformed. The city now had a gleaming new metro system, masses of new buildings had sprung up, and the “old city”, while still full of character, had been substantially tidied up. Here was living proof of the media mantra that “China is changing”.</p>
<p>My trips to China in 2010 and 2011 were largely about gauging the progress of metro rail development and city planning. But what left the greatest impression was the profound power of China’s growing inter-city rail network.</p>
<p>Travelling from my base in Shanghai to cities like Hangzhou and Suzhou, I was swept dramatically along elevated corridors at 360 km per hour.</p>
<h2>China’s plan for joined-up rail</h2>
<p>China has been pursuing high-speed rail development as a series of hub-and-spoke “clusters” centred on Beijing in the north, Shanghai in the east, and Guangdong province (of which Guangzhou is the capital) in the south.</p>
<p>In Shanghai’s case, this now means the city has rail links to China’s other eastern metropolises: Nanjing, Suzhou and Hangzhou. Previously regarded as separate and distinct cities in their own right, they are now being integrated so that people can work, live and trade on a daily basis between them.</p>
<p>This is urban development on a scale so big that the English language doesn’t even have a word for it. Given that Shanghai is already a “megalopolis” in its own right, what do we call it when Shanghai merges with three more cities of 10 million residents each? Are these huge cities now “suburbs” of Shanghai, despite being the size of Paris or New York?</p>
<p>It’s even more amazing when you consider that the same thing is happening elsewhere in China too. In 2011 I was taken to view the construction of Shenzhen North station, in Guangdong province, not far from Hong Kong.</p>
<p>The builders spoke then of Shenzhen North as the hub of a high-speed rail cluster that would eventually extend throughout Guangdong province as well as to Kowloon in Hong Kong. What’s more, it would also have rail links heading north to Shanghai and eventually all the way to Beijing.</p>
<p>The concept seemed too futuristic to contemplate, but the massive bulk of the Shenzhen North project, and the startling progress seen around Shanghai, rendered it plausible.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/46493/original/5265j4q3-1397602582.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/46493/original/5265j4q3-1397602582.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/46493/original/5265j4q3-1397602582.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/46493/original/5265j4q3-1397602582.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/46493/original/5265j4q3-1397602582.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/46493/original/5265j4q3-1397602582.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/46493/original/5265j4q3-1397602582.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/46493/original/5265j4q3-1397602582.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Shenzhen North Station under construction in 2011.</span>
<span class="attribution"><span class="source">Chris Hale, 2011</span></span>
</figcaption>
</figure>
<p>Shenzhen North station has now opened, along with similar mega-sized rail terminals in many major Chinese cities. Guangzhou and Shenzhen, 120km apart, are now linked by a 30-minute train ride. </p>
<p>Within just a few years, China’s 2400 km north-south spine will be linked by a giant rail network, with Hong Kong at one end, Beijing at the other, and hundreds of millions of people in between.</p>
<h2>A new lifestyle</h2>
<p>The Chinese people are getting to grips with high-speed travel as a lifestyle opportunity. Rumour suggests that ticket prices are being kept artificially low, and this seems plausible given that they seem dirt-cheap – the fare from Shenzhen to Guangzhou is equivalent to A$7.</p>
<p>This means that brand-new facilities such as Shenzhen North are already overwhelmed with passenger demand, and my experience would suggest one or two teething troubles. Neglecting to buy a return ticket (as I did on a trip last month) can be a major mistake.</p>
<p>Shenzhen North seems only to have about two dozen operational ticket counters. My 50-minute queue in the wrong line (for ticket pickup, not purchase) was followed by a 30-minute wait to use a ticket machine, which despite having an English-language option barred me for not having a Chinese ID card. Finally, after another hour waiting in another queue, I had my ticket in hand. (Granted, much of this may have been down to being an ignorant foreigner, although my protestations to that effect didn’t really work.)</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/46495/original/b33d48dd-1397602818.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/46495/original/b33d48dd-1397602818.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/46495/original/b33d48dd-1397602818.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/46495/original/b33d48dd-1397602818.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/46495/original/b33d48dd-1397602818.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/46495/original/b33d48dd-1397602818.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/46495/original/b33d48dd-1397602818.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/46495/original/b33d48dd-1397602818.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The joys of high speed travel: a ticket queue at Shenzhen North Station.</span>
<span class="attribution"><span class="source">Chris Hale, 2014</span></span>
</figcaption>
</figure>
<p>Ticketing gripes aside, Shenzhen North is a massive and gleaming testament to China’s high-speed rail dream. It is seemingly built to accommodate many hundreds of thousands of passengers at a time, so clearly the immense popularity was anticipated, even if the ticketing system hasn’t quite caught on yet.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/46497/original/t37d6hdp-1397603011.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/46497/original/t37d6hdp-1397603011.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/46497/original/t37d6hdp-1397603011.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/46497/original/t37d6hdp-1397603011.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/46497/original/t37d6hdp-1397603011.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/46497/original/t37d6hdp-1397603011.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/46497/original/t37d6hdp-1397603011.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/46497/original/t37d6hdp-1397603011.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The vast interior of Shenzhen North may be a contemporary architectural touchstone in the making: part airport, stadium, shopping centre and train station.</span>
<span class="attribution"><span class="source">Chris Hale, 2014</span></span>
</figcaption>
</figure>
<h2>The transport revolution</h2>
<p>China’s roll-out of high-speed rail is set to usher in one of the most profound changes to travel patterns in human history. For those astonished by the pace of Chinese development over the past two decades, the coming decade will see even faster change, as most of the country becomes integrated through convenient rail travel.</p>
<p>China is not the first to embrace rail. But what Europe and Japan accomplished over 40 years, China has effectively quadrupled in little more than a decade.</p>
<p>What are the implications for Australia and the United States – large countries dominated by cars, trucks and planes, which could benefit from high-speed rail but have so far viewed it as too expensive?</p>
<p>China’s experience could potentially democratise the technology, making it more viable to build high-speed rail links in eastern Australia or across North America. </p>
<p>Perhaps the Chinese rail program will do for fast ground travel what the US space project did for satellite communications.</p>
<p>One thing is for certain - they’ll be selling lots of tickets at Chinese train stations. The queues are testament to that. </p><img src="https://counter.theconversation.com/content/25597/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Chris Hale is an infrastructure consultant and contractor.
His site investigations in Southern China have been supported on an in-kind basis by the MTR Corporation of Hong Kong.</span></em></p>As a young university student, I first visited Guangzhou during the mid-1990s and found it a gloomy and unsettling place. The third world, undoubtedly. When I went back again in 2010, it was transformed…Chris Hale, Lecturer, Department of Infrastructure Engineering, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/224302014-01-28T15:33:42Z2014-01-28T15:33:42ZChina’s war on thought is being waged in Western universities<figure><img src="https://images.theconversation.com/files/40009/original/4qhs54y3-1390907357.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Xu Zhiyong, jailed for four years. for inciting public disorder.</span> <span class="attribution"><span class="source">Wikimedia Commons</span></span></figcaption></figure><p>In the past decade, US and UK universities have embarked on a program of developing formal relationships, exchanges, and partnerships with their counterparts in China. </p>
<p>No scholar interested in promoting knowledge could argue against some kind of educational exchanges between China and the west. On the other hand, the architects of most of these exchanges – primarily academic administrators and trustees – have avoided asking tough moral questions about the repression of freedom of thought and expression in China, even in the face of overwhelming evidence that such repression is intensifying under the new regime.</p>
<p>Many have gone out of their way to avoid such questions, preferring a kind of academic realpolitik approach: China is a world power and a force to be reckoned with, and therefore we must “do business” with them. These new partnerships are lucrative for colleges and universities, especially those who are strapped for cash; therefore ethical considerations are subordinate to economic ones. </p>
<p>If there is any moral argument, it is that new partnerships will help liberalise the Chinese environment and hasten the realisation of progressive ideals there. This is, at best, a hypothesis, easily disproven by the fact that bloody <a href="http://en.rsf.org/chine-press-release-by-the-liu-xiaobo-01-06-2012,42718.html">Tiananmen Square massacre</a> occurred after a pronounced period of heady liberalisation.</p>
<p>Since <a href="http://www.rfa.org/english/news/china/xi-jinping-03142013113715.html">Xi Jinping</a> became general secretary of the Central Committee of the Communist Party, freethinking intellectuals and activists have <a href="http://www.scmp.com/news/china-insider/article/1298316/infographic-activists-list-chinese-political-arrests-shows">increasingly been repressed</a>. Many leading dissidents have been detained, harassed, or jailed since Xi took power. </p>
<p>The most prominent recent case is that of <a href="http://www.bbc.co.uk/news/world-asia-china-25900272">Xu Zhiyong</a>, the leader of the New Citizens Movement, which calls for the establishment of the rule of law, civil society and public disclosure of party elite’s assets. Xu has just been sentenced to four years in prison for the crime of “inciting public disorder”. </p>
<p>In a welcome gesture, the US State Department pointedly <a href="http://www.state.gov/r/pa/prs/ps/2014/01/220628.htm">criticised this move</a>, saying:</p>
<blockquote>
<p>We call on Chinese authorities to release Xu and other political prisoners immediately, cease restrictions on their freedom of movement, and guarantee them the protections and freedoms to which they are entitled under China’s international human rights commitments.</p>
</blockquote>
<h2>Xia Yeliang</h2>
<p>Another of these dissidents, the liberal economist Professor <a href="http://econ.pku.edu.cn/english/displaynews.asp?id=1759">Xia Yeliang</a>, has a special relationship to my home institution, Wellesley College. In June 2013, Wellesley College signed a <a href="http://www.wellesley.edu/wwp/peking/partnership">memorandum of understanding</a> with Peking University. The memorandum included a call for exchanges between the faculties of the two institutions. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/40010/original/yc9r324p-1390907509.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/40010/original/yc9r324p-1390907509.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/40010/original/yc9r324p-1390907509.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=395&fit=crop&dpr=1 600w, https://images.theconversation.com/files/40010/original/yc9r324p-1390907509.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=395&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/40010/original/yc9r324p-1390907509.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=395&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/40010/original/yc9r324p-1390907509.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=496&fit=crop&dpr=1 754w, https://images.theconversation.com/files/40010/original/yc9r324p-1390907509.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=496&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/40010/original/yc9r324p-1390907509.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=496&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Economist Xia Yeliang was expelled from Peking University for his outspoken political views.</span>
<span class="attribution"><span class="source">Voice of America</span></span>
</figcaption>
</figure>
<p>In that spirit, a group of seven Wellesley faculty members from different disciplines invited Xia to come to Wellesley College in July 2013. We had heard of his difficulties with the regime in China: he was a drafter and signer of <a href="http://www.charter08.eu/">Charter 08</a>, the foundational document of the modern human rights movement in China, and was an outspoken critic of the regime. </p>
<p>At the time of his visit, he was under intense pressure to renounce his political views and activities and keep quiet. Soon after he left, the seven faculty members drafted an <a href="http://www.insidehighered.com/news/2013/09/13/academic-freedom-concerns-may-jeopardize-wellesley-peking-partnership">open letter</a> to the president of Peking University, asking that the university not fire Xia. It was signed by 140 Wellesley faculty members, and expressed the view that we would call for a reconsideration of the partnership if Xia’s position was terminated.</p>
<p>Xia was fired in October, as expected. The <a href="http://english.pku.edu.cn/News_Events/News/Focus/10587.htm">grounds were that he was a “bad teacher”</a>, though there was no publicly available evidence that this was so, and Xia himself did not even have access to his student evaluations. No scholar of his standing had ever been released for bad teaching. </p>
<p>Before his break with the regime, he was regularly called on to appear in official news outlets. It was as clear a case as one could imagine of political repression of dissent. This was confirmed by a memorandum sent in August 2013 to Xia by the party secretary in charge of the School of Economics. </p>
<p>The memo (<a href="https://www.facebook.com/mooneychina/posts/443801705746200">now public</a>) threatened Xia with expulsion if he did not retract his public criticisms of the party, cease his activities with civil society associations, and keep his mouth shut in the future. The memorandum said nothing about teaching.</p>
<p>Xia’s story took a Kafkaesque turn at this point. A small, but resolute, faction of faculty members at Wellesley College began a negative campaign against him. The cornerstone of this campaign was amplification of the party’s argument that Xia’s termination was due to “bad teaching”. In one case, one of Wellesley’s China experts (who had actually been a principal author of the letter on Xia’s behalf), changed course and claimed that he had “evidence” that proved beyond a reasonable doubt that Xia was fired for bad teaching. Inexplicably, he stated that he could not share this.</p>
<p>Another faculty member, a Chinese national with strong ties to China, repeated that charge. He also claimed the faculty signatories were ignorant about China. A professor of English with no expertise in China railed in the college’s Academic Council about faculty support of Xia as a form of “cultural imperialism”, claiming that “academic freedom” was a Western value not to be imposed on China. </p>
<p>Yet another English professor chimed in with the accusation that we were engaged in “orientalism”. Still others turned on Xia when they discovered that he would be supported as a visiting scholar at Wellesley by funds from a foundation with libertarian, free-market inclinations (<a href="http://online.wsj.com/news/articles/SB10001424127887323308504579085611270637836">an article praising Xia in the Wall Street Journal</a> did not help his case).</p>
<p>What can we learn from this that has general relevance for professors who work at institutions that have relationships with China? Certainly people had the right to have any view whatsoever of Xia. One would expect, though, that progressive, critical intellectuals in academe would support academic freedom and civil society or, at worst, fall into the default mode of indifference. </p>
<h2>Silence breeds consent</h2>
<p>These new partnerships actually depend on the avoidance of public, critical examination of the Chinese regime. It is hard to read intent into silence, and to be sure, the strong point of academics is not civil courage. In these cases, <em>qui tacit, consentit</em>: he who remains silent, consents.</p>
<p>What is hard to bear, and what we all must come to expect when we consider any partnership between Western and Chinese institutions of higher education, is that there are those who are willing to work actively against the liberal forces of civil society, and to serve as mouthpieces for a regime that is the enemy of the basic values and freedoms of liberal democracy. Whether they do so wittingly or unwittingly, and for whatever reason, the effect is a devastating blow to freedom and civil society and a victory for repression in China.</p>
<p>Academic institutions that have relationships with China are easily corrupted by such relationships, either through the development of the generalised cowardice of self-censorship or the with active complicity of various interests in a regime that is at war with the mind. </p><img src="https://counter.theconversation.com/content/22430/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Thomas Cushman does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>In the past decade, US and UK universities have embarked on a program of developing formal relationships, exchanges, and partnerships with their counterparts in China. No scholar interested in promoting…Thomas Cushman, Deffenbaugh de Hoyos Carlson Professor in the Social Sciences; Professor of Sociology, Wellesley CollegeLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/203922013-11-19T14:20:34Z2013-11-19T14:20:34ZThird Plenum sets out tentative program for change in China<figure><img src="https://images.theconversation.com/files/35597/original/hrfvmrg8-1384857682.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Out and about: Xi Jinping deploying soft power on a trip to Ireland.</span> <span class="attribution"><span class="source">PA</span></span></figcaption></figure><p>The Chinese leadership transition last year, with Hu Jintao handing over to Xi Jinping, finally laid to rest Deng Xiaoping’s long-running maxim that China should “keep a low profile and hide its brightness”. </p>
<p>Evidence to that effect was on full display, for example, in Trinidad and Tobago in June this year, when Xi and the first lady, Peng Liyuan, touched down in the small, oil-rich islands for a state visit. As they strode down the gangway, they seemed somehow ostentatious, Peng’s turquoise attire matching Xi’s tie. Such a look would have been less remarkable had this been any other first couple. </p>
<p>Until now, perhaps due to the memory of Mao Zedong’s feared spouse Jiang Qing, Chinese first ladies have shunned the limelight – and by comparison to Deng Xiaoping, Jiang Zemin and Hu Jintao, Xi’s performance on the world stage is remarkably outgoing.</p>
<p>His extrovert manner is increasingly of a piece with foreign policy, as China leverages its influence in parts of the world where it had previously operated more tentatively. The country’s soft power is being felt more widely than ever, as are the knock-on effects of its domestic economic reforms. </p>
<p>Yet despite this outgoing appearance, we still know very little about the aspirations that guide the new leadership of the party; and we still have to glean what clues we can from official announcements – hence the importance of the Third Plenum’s communiqué.</p>
<h2>Nothing to get excited about?</h2>
<p>This announcement had been hotly anticipated for some months. There had been <a href="http://wbponline.com/Articles/View/21846/third-plenum-expected-to-change-china-s-face-like-never-before">speculation</a> that Xi’s sure-footedness at the helm, combined with the reformist credentials of his premier Li Keqiang, would allow the party to take sweeping measures to alleviate social inequalities and break down oligopolies. There were also hopes that Xi and Li would streamline China’s often contradictory foreign policy and better manage the country’s maritime disputes with Japan, the Philippines and Vietnam.</p>
<p>The climate of expectation meant that the Third Plenum, which convened just over a week ago, was expected at the very least to set out a bold agenda primarily for domestic change – even if few commentators truly expected it to spell out a coherent vision of China as an emerging superpower. The anticipation of groundbreaking decisions had been building for months, riding a wave of upbeat coverage in China’s state-controlled media. Independent analysts, for their part, argued that Xi would seem hopelessly out-of-touch if he were to under-deliver. </p>
<p>But despite predictions of a “promising” or “unprecedented” announcement, the Third Plenum communiqué has instead been received mostly with <a href="http://online.wsj.com/news/articles/SB10001424052702303460004579193813366832736">disappointment</a> both at home and abroad. Specific measures are usually publicly announced only in the several weeks following plenary party conclaves, and the communiqué itself is sufficiently vague to allow for imminent surprises – but still, there is no truly surprising or dramatic news. </p>
<p>In the absence of major stories, what has subsequently hit the headlines in China is not empowerment for the private sector or better protection for individual property rights, but instead the establishment of a national security council – whose mandate and purpose are far from clear.</p>
<h2>‘Feeling the stones’</h2>
<p>Yet this vagueness and hint-dropping is nothing new. The communiqué’s approach follows exactly the sort of cautious reform rationale that has defined much of the past 30 years in China: policy making by trial and error. </p>
<p>The party’s approach to governing has long been an incremental one, known as “crossing the river by feeling the stones”. Communiqués like the recent one use opaque party jargon to conceal innovations that actually emerge on the ground over the course of a few years, while they are tried, tested and allowed to bed in.</p>
<p>In this spirit, the communiqué hedges considerably about how things will proceed. For example, it sets out to “straighten out the relationship between government and the market” by allowing the market to play a decisive role in allocating resources, whilst at the same time ensuring the party continues to command “all quarters” – hardly a bold statement for change.</p>
<p>More notably, the communiqué pays homage to the “achievements” of the Mao Zedong era at quite great length. Though hardly a surprise in view of Xi’s <a href="http://www.scmp.com/news/china/article/1282772/xi-jinping-turns-mao-zedongs-thoughts-his-efforts-counter-corruption">rhetoric</a> in recent months, this homage to Mao is somewhat absurd. It not only defies the plurality of opinion and extensive programme of research into the complexities of the Mao era, both in China and in the West; it also sits very uncomfortably with what we know of Xi’s personal journey. </p>
<p>Xi, like the other princelings who now run the country, may have experienced a privileged early childhood in the Mao era, but many of his generation’s parents suffered brutal torment at the hands of the state. Yet the party’s nostalgic praise for Mao’s rustic mindset, issued even as rapid urbanisation is transforming China beyond recognition, betrays an ambivalence about the legacy of the reform era.</p>
<h2>China dreaming</h2>
<p>Against the backdrop of sluggish economic growth in the West and the failure of the Arab Spring, the conflation of the reform era with Mao’s legacy has become central to the CCP’s account of China’s relative success and international uniqueness. Running the last 60-odd years together into a coherent history has popular appeal at home, and might confer some patriotic legitimacy on the party in the intermediate term – but it certainly will not endear Xi’s “China Dream” to the developed world.</p>
<p>There is, as has been reported, an upside. The communiqué does hint (albeit broadly) at the gradual phasing out of some of the rigours of the one-child policy, and of “re-education” camps. The Plenum’s full decision hints at other changes besides, concerning judicial, rural-land and household-registration reform – measures that could (and should) make life a little easier for China’s millions of disenfranchised migrant workers, provided they are actually implemented. </p>
<p>State-owned enterprises may similarly be forced to transfer stock to external stake-holders in a bid to make them more accountable and have them pay back the central government their fair share in tax. The idea here is to level the economic playing field, so that less politically-connected private-sector businesses can compete more effectively in the marketplace and more easily protect their intellectual property rights.</p>
<p>But in the absence of specifics, we can only hope that these measures will be fleshed out and followed through before too long – and assess them on the merits of what actually happens, not what is tentatively announced.</p><img src="https://counter.theconversation.com/content/20392/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Niv Horesh does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Chinese leadership transition last year, with Hu Jintao handing over to Xi Jinping, finally laid to rest Deng Xiaoping’s long-running maxim that China should “keep a low profile and hide its brightness…Niv Horesh, Associate Professor and Reader in Contemporary Chinese Studies, University of NottinghamLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/204582013-11-19T06:11:25Z2013-11-19T06:11:25ZChina one-child policy: don’t bank on a baby boom just yet<figure><img src="https://images.theconversation.com/files/35520/original/pp857bvf-1384794320.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">No need to order a new bike.</span> <span class="attribution"><span class="source">Elizabeth Thomsen</span></span></figcaption></figure><p>Despite the <a href="http://www.bbc.co.uk/news/world-asia-china-24963384">announcements</a> made at the end of last week, the one-child policy is not being abolished in China any time soon, and it will take some dismantling when it is eventually abandoned.</p>
<p>The reform to China’s family planning regulations announced at the Chinese Communist Party Plenum does not amount to the effective abandonment of restrictions on the size of Chinese families. It will probably turn out to be the thin end of a very long wedge which eventually takes us to abolition of all controls, but not for another ten years or so. There are many forces at work that will combine to make the undoing of this policy a tricky process.</p>
<h2>Do families want more kids?</h2>
<p>The change means that couples will be allowed to have a second child if one spouse is an only child. As such, it will mainly apply to urban couples – rural couples were already permitted a second child if the first was a girl or had a disability – as well as in a few other narrowly defined circumstances which vary by province. Overall, it was estimated prior to this reform that slightly more than half of China’s couples of child-bearing age could have a second child, once permission was applied for and granted, and often only after a fixed period of years since their first child’s birth.</p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/35521/original/3y6qf5x6-1384795715.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/35521/original/3y6qf5x6-1384795715.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/35521/original/3y6qf5x6-1384795715.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=869&fit=crop&dpr=1 600w, https://images.theconversation.com/files/35521/original/3y6qf5x6-1384795715.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=869&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/35521/original/3y6qf5x6-1384795715.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=869&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/35521/original/3y6qf5x6-1384795715.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1092&fit=crop&dpr=1 754w, https://images.theconversation.com/files/35521/original/3y6qf5x6-1384795715.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1092&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/35521/original/3y6qf5x6-1384795715.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1092&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">One is enough for some.</span>
<span class="attribution"><span class="source">Arian Zwegers</span></span>
</figcaption>
</figure>
<p>Previously, urban couples both had to be only children to get the second-child concession. The reform will extend that possibility to another 15 to 30 million women. That sounds like a lot but is actually a drop in the ocean if you look at China’s total population, which is currently estimated at around 1.4 billion. So there will be no Xi Jinping-inspired baby boom just yet. That’s one reason why the CCP government felt able to make this concession now.</p>
<p>Unlike rural China, where the real-life economic and social consequences of not having a son are serious, in urban China there is much less pressure to break the one-child policy rules. With many married women working full-time outside the home and a shortage of living space in cities, urban fertility actually fell faster in the ten years of the 1970s before the one-child policy was introduced than it did in the next ten years as it was strictly enforced.</p>
<p>A substantial number of couples eligible for the concession will not want to take advantage of it, leaving perhaps three-fifths who will, at some point, decide to have a second child. Urban services can cope with that, especially as the families of migrants without permanent residence rights in the major cities are still largely excluded from using them.</p>
<p>But on the other hand, the slight uptick in urban births (which will be less gender-skewed than in the countryside, where there are at least 119 boys born now for every 100 girls) will not solve the problem of China’s ageing population, either. This “4-2-1” problem, of one working-age adult with two retired parents and four grandparents to support, is what will eventually persuade the CCP to phase out the system completely, as it will no longer serve the interests of the state.</p>
<h2>Vested interests</h2>
<p>A change in the rules, whether major or minor, does not mean that the way in which the rules are enforced will change. This is where the most egregious abuses occur and will continue to occur as long as family planning is dictated from above. There has never been any such thing as a trivial breach of the policy. Women have been forced to have abortions within days of their due date for not leaving the required gap between their first and second birth, and we should expect more cases like that of <a href="http://www.nytimes.com/2012/06/27/world/asia/chinese-family-in-forced-abortion-case-still-under-pressure.html?_r=0">Feng Jianmei</a>. </p>
<p>As more and more adults of child-bearing age leave the countryside, family planning officials struggle to meet their quota for abortions and sterilisations. In order to do so, they target older people instead, such as the 59-year-old man in Yunnan province who <a href="http://www.rfa.org/english/news/china/sterilization-08132013104927.html">died earlier this year in mysterious circumstances</a> after officials took him away for sterilisation. He had been unable to pay a fine levied for allegedly breaking birth quota rules.</p>
<p>Watering down the policy will not put an end to these practices and the interests of those involved in enforcement could frustrate the move towards total abolition too.</p>
<p>When the one-child policy does end, an army of family-planning officials will not only be out of work, but they will have lost the opportunity to make an illicit income as well. The first audit of provincial accounts for many years this autumn revealed unaccounted-for fines amounting to <a href="http://www.reuters.com/article/2013/09/19/us-china-children-idUSBRE98I02Q20130919">¥16.5 billion (US$2.7bn) from 19 provinces</a>. This suggests that ending the restrictions completely will be the equivalent of shutting down an industry. There are those that benefit who will fight for its survival.</p>
<p>On the surface, this further loosening of the one-child policy appears to be a significant move, but it is still a long way from complete abolition. Although the policy’s eventual disappearance is inevitable under the pressure of an ageing population, family-planning officials who now have fewer policy violations from which to profit may even be motivated to enforce the remaining rules more harshly in the short term, while many of the intended beneficiaries of this reform were not the ones pressing for permission to have a larger family in the first place.</p><img src="https://counter.theconversation.com/content/20458/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jackie Sheehan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Despite the announcements made at the end of last week, the one-child policy is not being abolished in China any time soon, and it will take some dismantling when it is eventually abandoned. The reform…Jackie Sheehan, Professor, School of Asian Studies, University College CorkLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/159032013-08-02T13:27:19Z2013-08-02T13:27:19ZThe market won’t stop China’s polluting state industries<figure><img src="https://images.theconversation.com/files/28575/original/r9vctqpz-1375449960.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Smoke gets in your eyes.</span> <span class="attribution"><span class="source">High Contrast</span></span></figcaption></figure><p>When officials in the northern Chinese province of Hubei recently declared their dedication to cleaning up air pollution by giving up smoking, few were impressed by their grasp of the problem. But China has demonstrated it is taking steps to tackle air and wider climate change-related pollution, most recently by rolling out an emissions trading scheme (ETS) in its industrial heartlands.</p>
<p>China accounts for more than 20% of the world’s emissions of carbon dioxide generated by energy use, just ahead of the USA at 18%. Its <a href="http://www.eia.gov/cfapps/ipdbproject/iedindex3.cfm?tid=91&pid=47&aid=31&cid=regions&syid=2007&eyid=2011&unit=MTCDPUSD">carbon intensity</a> - the quantity of carbon dioxide emission per unit of GDP in purchasing power parity - is more than twice that of both the USA or India, and 80% higher than that of South Korea.</p>
<p>China’s high carbon intensity arises from a combination of an economy dependent on heavy industry, the predominance of coal, which accounts for 70% of primary energy consumption, and the inefficient nature of much of the industrial plant. Nevertheless, it must be recognised that some <a href="http://www.chinadialogue.net/article/show/single/en/5944-China-taking-unfair-blame-for-its-exported-carbon-emissions">30% of the country’s carbon emissions</a> derives from the manufacture of goods which are exported.</p>
<p>China’s government has <a href="http://www.chinafaqs.org/library/chinafaqs-chinas-carbon-intensity-goal-guide-perplexed">pledged</a> to reduce carbon emission intensity by 40-45% between 2005 and 2020. This will require an equivalent reduction in energy intensity. Between 2005 and 2010 the government achieved considerable success in reducing energy intensity by 19% against a target of 20%. The intensity of carbon emissions from energy fell by a similar amount. This was accomplished principally through greater regulation of the mainly state-owned heavy industries such as steel, cement and chemicals.</p>
<p>But what works for a limited number of energy-intensive enterprises is unlikely to be effective across the whole economy, not least because of the sheer number of enterprises, many of which are privately-owned. So the Chinese government has had to introduce economic carrots and sticks tackle the problem.</p>
<h2>Emissions trading and carbon tax</h2>
<p>The <a href="http://www.china.org.cn/environment/2012-03/31/content_25035673.htm">Draft Law on Addressing Climate Change</a>, published in March 2012, includes both cap-and-trade-style emissions trading schemes and a carbon tax. In April this year the National Development and Reform Commission <a href="http://en.ndrc.gov.cn/">(NDRC)</a> announced that seven pilot emission trading schemes would be launched this year, with a focus on energy intensive industries such as petrochemicals and power generation. The even more energy-intensive and polluting industries such as steel and cement do not appear to have been included, probably because they are critical for the construction sector and employ so many people. The pilot schemes are to be held in seven industrial cities and the first was launched <a href="http://www.economist.com/blogs/analects/2013/06/carbon-emissions">in Shenzhen in June</a>.</p>
<p>The Xinhua Press announcement of the government’s plan to introduce a carbon tax in February referred to an earlier Ministry of Finance suggested rate of 10 Yuan (US$ 1.6) per tonne of carbon dioxide rising to 50 Yuan (US$ 8.0) per tonne by 2020. The proposed carbon tax was to be only one component of a package of tax measures aimed at energy and resource consumption and environmental damage.</p>
<p>This proposed tax package implies the direct involvement of the Ministry of Finance, apparently in opposition to the National Development and Reform Commission’s proposed emissions trading scheme. Running both tax and trading scheme together for the same emitters would be unnecessarily complex, but nothing more has been said on the matter since February.</p>
<h2>Institutional constraints</h2>
<p>Whilst China’s ambition to introduce such economic instruments is to be applauded, implementing them in such a way that they are effective will face a number of serious obstacles. First, the major energy users are large state-owned enterprises which have significant political and market power, soft budgetary constraints and a low cost of capital. Additionally they are protected from hostile take-overs or bankruptcy, which would require government approval.</p>
<p>Second, the limited capacity and authority of the governing agencies may restrict their ability to monitor and administer the scheme, or impose penalties on offenders. Antagonistic local governments are likely to find ways to undermine central government initiatives, for example by compensating local enterprises for financial losses arising from these schemes, removing any economic impetus to change.</p>
<p>Finally, most energy prices are still subject to direct or indirect government control, and Beijing is reluctant to allow the price of energy and industrial products to rise too rapidly.</p>
<p>In the terms of institutional economics, there’s a profound mismatch between the emissions trading scheme and carbon tax on the one hand, and the prevailing institutional inertia and the manner of governing the heavy industry sectors on the other. Essentially, this means that where the state dominates ownership and price controls, such instruments based on market forces are unlikely to have any significant effect.</p>
<p>Until the state releases its grip on major energy producers, energy consumers and energy prices, the aim of reducing carbon emissions may best be achieved by further regulation and by allowing energy prices, for everyone, to rise.</p><img src="https://counter.theconversation.com/content/15903/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Philip Andrews-Speed does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>When officials in the northern Chinese province of Hubei recently declared their dedication to cleaning up air pollution by giving up smoking, few were impressed by their grasp of the problem. But China…Philip Andrews-Speed, Principal Fellow, Energy Studies Institute, National University of SingaporeLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/107022012-11-15T19:27:46Z2012-11-15T19:27:46ZThe more things change: Xi Jinping’s rise won’t alter much for Australia and the region<figure><img src="https://images.theconversation.com/files/17665/original/bzr66269-1352953945.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">New president Xi Jinping (centre) flanked by He Guoqiang (left) and Jia Qinglin (right) at the closing ceremony of the 18th Communist Party Congress in Beijing.</span> <span class="attribution"><span class="source">AAP/How Hwee Young</span></span></figcaption></figure><p><em>CHINA IN TRANSITION: As China goes through its secretive but widely anticipated leadership transition, the rest of the world is watching. This week, The Conversation takes an in depth look at the National Congress of the Communist Party of China.</em></p>
<p>The new leadership of China has finally been revealed, following the arcane decision-making process of the 18th People’s Congress of the Chinese Communist Party. </p>
<p>As widely expected, Xi Jinping is to be General-Secretary and President of the People’s Republic of China, with Li Keqiang as Premier. Five other members were chosen for the reduced seven-member Standing Committee of the Politburo: Zhang Dejiang, Yu Zhengsheng, Liu Yunshan, Wang Qishan, and Zhang Gaoli. This <a href="http://www.businessspectator.com.au/bs.nsf/Article/China-reform-Hu-Jintao-Wen-Jiabao-SOEs-foreign-pol-pd20121112-ZXUJK?opendocument&src=idp&utm_source=exact&utm_medium=email&utm_content=132879&utm_campaign=kgb&modapt=commentary">demonstrates overall continuity</a>, leaving party hardliners, concerned with continuing China’s economic growth, in control, rather than promoting any reforms advocating political liberalisation. </p>
<p>It will take some time before the relative strengths of the various factions and sub-factions of the party become clear in the 25-member full Politburo, and the 204-member Central Committee. The main rival factions have been termed the “princelings”, from the families of revolutionary veterans, and the “populists”, arising from the Chinese Communist Youth League. </p>
<p>There should be continuity in China’s relations with Australia. The Chinese economy appears to be overcoming its recent slower period, with likely prospects for continued strong growth, emphasising domestic investment and consumption. </p>
<p>China should therefore seek to maintain good trade relations with Australia to secure ongoing access to imports of Australian commodities, and to education and tourism services for its <a href="http://www.dfat.gov.au/publications/asian-century/china.html">growing middle class</a>.
Xi Jinping is familiar with the West, having visited Australia in 2010, and undertaken a week-long visit to the USA with Vice-President Joe Biden in 2011. Former PM Kevin Rudd is one “China expert” confident that Xi Jinping’s leadership will be generally <a href="http://www.smh.com.au/opinion/politics/with-xi-as-president-political-reform-may-be-embraced-20121112-298f4.html">favourable towards Australia</a>.</p>
<h2>Virulent nationalism</h2>
<p>Unfortunately, the new leadership is likely to continue to appeal to virulent nationalism in order to distract from entrenched problems of corruption and income inequality. This reflects the belief that China is a rising great power, deserving international respect when compared to the economically fragile US and EU. </p>
<p><a href="http://articles.economictimes.indiatimes.com/2012-09-17/news/33902588_1_anti-japan-diaoyu-islands-senkaku">Mob attacks</a> on Japanese-owned businesses and Japanese nationals in China over the disputed Senkaku (Diaoyu) Islands this year shows the danger of the party allowing confrontational nationalism to erupt. </p>
<p>Trade and investment between Japan and China has already been severely curtailed, as nervous Japanese companies are shifting investment <a href="http://online.wsj.com/article/SB10001424052970203406404578072174179491296.html">towards more welcoming states</a> in ASEAN. </p>
<p>The farewell speech of outgoing leader Hu Jintao emphasised the need for China to become a major maritime power, and this ambition is sure to keep on being pursued. The naval arm of the People’s Liberation Army (PLA) launched China’s first aircraft carrier this year, with more being planned, although they will not be fully operational for some years. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/17669/original/nkpq4hm4-1352954942.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/17669/original/nkpq4hm4-1352954942.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=418&fit=crop&dpr=1 600w, https://images.theconversation.com/files/17669/original/nkpq4hm4-1352954942.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=418&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/17669/original/nkpq4hm4-1352954942.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=418&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/17669/original/nkpq4hm4-1352954942.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=525&fit=crop&dpr=1 754w, https://images.theconversation.com/files/17669/original/nkpq4hm4-1352954942.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=525&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/17669/original/nkpq4hm4-1352954942.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=525&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">China’s enormous economic growth has proven vital to the health of the Australian economy.</span>
<span class="attribution"><span class="source">Stuck In Customs</span></span>
</figcaption>
</figure>
<p>The PLA Navy will still remain numerically and <a href="http://www.scmp.com/news/china/article/1077858/china-should-become-maritime-power-hu-jintao-says">operationally inferior</a> to the US Pacific Command well into the foreseeable future.</p>
<p>China’s territorial disputes with Japan, Vietnam, the Philippines and other ASEAN states over the South China Sea seem set to continue, and border disputes also remain with India. </p>
<p>Chinese maritime security vessels are being <a href="http://www.japantimes.co.jp/text/nn20121105b5.html">regularly sent</a> into Japanese-claimed territorial waters around the Senkakus. A big test of China’s attitudes towards regional stability will be the East Asia Summit meeting later this month. Another attempt is likely to be made by the US, Japan and the ASEAN states to have some sort of regional diplomatic <a href="http://www.smh.com.au/opinion/politics/obama-caught-in-the-great-thrall-of-china-20121112-298bs.html">dispute settlement mechanism</a> established, in order to prevent the present maritime territorial disputes escalating into more serious confrontations. </p>
<p>But after the experience of the ASEAN Regional Forum in Cambodia earlier this year, where China obstinately <a href="http://thediplomat.com/2012/07/23/aseans-soul-searching-after-phnom-penh/">refused to discuss</a> the South China Sea issue, it appears unlikely any progress will be made.</p>
<h2>What next for Australia?</h2>
<p>The “pivot” of US forces in greater strength into the Pacific region, is also set to be another lingering tension, despite Australia and the USA’s diplomatic attempts at reassuring China over these developments. </p>
<p>This week’s <a href="http://foreignminister.gov.au/releases/2012/bc_mr_121114.html">AUSMIN meetings</a> in Perth, with visits by outgoing US Secretary of State Hillary Clinton and Defence Secretary Leon Panetta, have emphasised closer defence cooperation within the ANZUS alliance as Australia’s core security relationship. On <a href="http://foreignminister.gov.au/releases/2012/bc_mr_121114.html">the agenda</a> was the prospect of greater use of Australian airbases by US aircraft, and more visits by US warships, which could potentially include a carrier battle group, to HMAS Stirling naval base in Western Australia. </p>
<p>While bilateral foreign relations between China and Australia are likely to remain fairly cordial, mainly due to shared economic interests, the danger remains of security relations deteriorating in the region. </p>
<p>It will be intriguing to see whether the <a href="http://www.lowyinterpreter.org/post/2012/10/30/Asian-Century-White-Paper-Defence-White-Paper-preview.aspx">Defence White Paper</a> due next year will repeat the concerns of the 2009 White Paper, of a rising China as a potential long-term security threat.</p>
<p><a href="http://www.abc.net.au/news/2012-11-14/interview-with-former-prime-minister-paul-keating/4372568">Paul Keating’s critique</a> of Australian foreign policy, calling for greater independence from the US, seems a timely reminder of the need to reconsider Australia’s best course in responding to this uncertain regional security environment.</p><img src="https://counter.theconversation.com/content/10702/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Craig Mark does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>CHINA IN TRANSITION: As China goes through its secretive but widely anticipated leadership transition, the rest of the world is watching. This week, The Conversation takes an in depth look at the National…Craig Mark, Associate Professor of International Studies, Kwansei Gakuin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/106692012-11-15T03:18:34Z2012-11-15T03:18:34ZLong march to reform: China’s state-owned enterprises and the leadership transition<figure><img src="https://images.theconversation.com/files/17632/original/k3bmcc6j-1352935505.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">China's new leaders must decide whether to reform the country's state-owned enterprises, or remain dependent on export markets.</span> <span class="attribution"><span class="source">AAP</span></span></figcaption></figure><p>With the dust settling on Barack Obama’s second term in the White House and as Washington nervously approaches the precarious precipice of its looming fiscal cliff, all eyes are on the grey matter of the Chinese Communist Party at its <a href="http://www.sbs.com.au/news/article/1709301/Factbox-Chinas-18th-Communist-Party-Congress">18th Party Congress</a> in Beijing.</p>
<p>While the congress itself is widely regarded as carefully stage managed, this event has come about in the most controversial, at times polemical, and almost always unpredictable manner since the jostling for the keys to Zhongnanhai following the death of Mao in 1976.</p>
<p>Yet what are the implications of the leadership change for China’s economy and its forward trajectory? And importantly for Australia, what does this mean for China’s demand for our bulk commodities?</p>
<p>That Chinese economic growth has been slowing for the best part of a year is not in contention. The reasons for this slowdown have widely been attributed to a decline in export demand from a lethargic Eurozone and a sluggish US recovery.</p>
<p>This author has always contended the current slowdown is a result of the effect of the 18th party congress on China’s state-owned enterprises, as well as a considered attempt by the Chinese leadership to recalibrate growth by facilitating changes in Chinese consumer behaviour.</p>
<p>Few Western observers appreciate the impact of the leadership change on state-owned enterprises (SOEs), which dominate much of China’s economy and account for the lion’s share of Chinese investment in Australia.</p>
<p>The boards and management teams of SOEs are hardly fait accomplis determined by institutional investors at AGM seasons. They are tightly controlled by the Party’s all-powerful Organisation Department and are on the verge of a major shake-up following the conclusion of this week’s congress.</p>
<p>Chinese companies now account for 73 of the Fortune 500, the overwhelming majority of which are state owned. Such companies include such as Sinopec, China National Petroleum, State Grid and ICBC.</p>
<p>Given that central-level SOEs are represented as delegates to the congress and SOE bosses are often accorded ministerial level ranking in the party-state hierarchy, they are important actors in the congress process.</p>
<p>With careers at stake and uncertainty concerning board structure plaguing SOEs all year, the companies have held back on major investment decisions and capital commitments lest career pathways are jeopardised in the tightly fought contest for the spoils of office.</p>
<p>All bets have been off for months as the SOEs have effectively been in a protracted period of caretaker mode in much the same way that government departments in the Westminster system enter shutdown the moment the monarch’s first minister calls a general election.</p>
<p>Indeed, given SOEs are intricately involved in the complex web of party patronage governing party appointments, anecdotal evidence suggests that executives from some of China’s most powerful companies have fallen prey to the factional warfare which infamously erupted in the aftermath of the <a href="http://www.bbc.co.uk/news/world-asia-china-17673505">Bo Xilai scandal</a>.</p>
<p>Softening Chinese demand should not come as a surprise considering that the investment decision-making capacity of 145,000 SOEs which monopolise China’s banking, telecommunications and energy sectors are severely impacted by the machinations currently taking place in the Great Hall of the People.</p>
<p>With SOEs retreating behind the iron curtain of the congress and with a contraction in headline GDP numbers increasingly the norm, pressure is mounting on China’s leaders to curb the monopoly of SOEs, reform corporate governance and allow growth in private banking.</p>
<p>While outgoing President Hu Jintao’s <a href="http://www.economist.com/news/china/21565991-president-hu-jintao-gives-his-last-state-nation-address-chinas-leader-admitting">report to the congress last week</a> suggested at least some political will for a restructure of SOEs and the separation of government administration from their operations, it remains to be seen whether this will be met with substantive reform by the incoming leadership.</p>
<p>China is faced with a stark choice if it is to stimulate domestic growth without another round of gluttonous stimulus and unshackle itself from dependence on export markets.</p>
<p>The <a href="http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aIpq7IF4BM9Q">RMB¥ 4 trillion round of stimulus</a> in 2008 injected vast amounts of capital into infrastructure projects was heavily targeted at SOEs and further consolidated their role as lords and masters of the Chinese economy.</p>
<p>The saving grace of China’s stimulus was that for all its faults, it was offset by a tangible stash of liquid foreign currency reserves rather than QE Ben Bernanke-style.</p>
<p>The question on the minds of company boards is whether demand will pick up once the new <a href="http://www.abc.net.au/news/2012-11-09/who-is-who-china-leadership-contenders-congress/4360818">Politburo Standing Committee</a> is unveiled and executive appointments are finalised. It will be interesting to see if SOEs will adopt a business-as-usual approach or hold their fire waiting for overarching reform to come from above.</p>
<p>On the one hand, it is in Australia’s interests to see greater SOE transparency and a separation of management from the Chinese bureaucracy if it is to satisfy critics of state-owned foreign investment and see a level playing field offered to Australian investors in China.</p>
<p>On the other, both the Gillard government and company boards have been significant beneficiaries of the status quo. While Beijing’s 2008 round of stimulus drove infrastructure investment ahead of consumer consumption and plagued China’s local governments with debt, it undoubtedly gave Australia its current terms of trade boom.</p>
<p>One thing is for sure: as the combined fortunes of commodity producers and the federal budget is increasingly tied to Chinese demand, Australia has much riding on the nine cadres about to strut their stuff in Beijing.</p><img src="https://counter.theconversation.com/content/10669/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Laurie Pearcey does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>With the dust settling on Barack Obama’s second term in the White House and as Washington nervously approaches the precarious precipice of its looming fiscal cliff, all eyes are on the grey matter of the…Laurie Pearcey, Director - China Strategy & Development/Director, Confucius Institute, UNSW, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/106752012-11-13T03:41:17Z2012-11-13T03:41:17ZThe secret to the Chinese Communist Party’s success<figure><img src="https://images.theconversation.com/files/17523/original/mwss5942-1352697154.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Delegates at the 18th China Communist Party Congress listen to outgoing president Hu Jintao's address.</span> <span class="attribution"><span class="source">EPA/How Hwee Young</span></span></figcaption></figure><p><em>CHINA IN TRANSITION: As China goes through its secretive but widely anticipated leadership transition, the rest of the world is watching. This week, The Conversation takes an in depth look at the National Congress of the Communist Party of China.</em></p>
<p>The 18th National Congress of the Communist Party of China and the expected inauguration of Xi Jinping is a curiosity from afar.</p>
<p>During the congress, taxis in Beijing have <a href="http://www.scmp.com/comment/blogs/article/1073882/no-fresh-air-beijing-taxis-during-party-congress">been told</a> to keep passengers from rolling down windows to prevent the distribution of protest materials. Street vendors are <a href="http://www.bbc.co.uk/news/world-asia-china-20233101">not permitted</a> during this period. There are reports kites have been banned.</p>
<p>Seemingly, over the past six decades the Communist Party has continued to be the legitimate single party that governs mainland China, a feat which raises the question: how has this been accomplished?</p>
<p>There are potentially five reasons to explain the party’s resilience, which gives us insight into not only party behaviour, but also the potential for political reforms that the West has long hoped for.</p>
<p>The first reason for the party’s resilience is an intuitive one: a result of repression. The regime has used repression as a means to suppress political dissent and decreasing rights and freedoms in the name of social stability. Since market reforms in 1978, repression, although still present, has declined sharply.</p>
<p>For instance, there were fewer political prisoners after the <a href="http://www.chinatourdesign.com/introduction_of_Tiananmen_Square/April_Fifth_Movement.htm">Tiananmen Square protests</a> than at the end of the Cultural Revolution in 1976. This decline, coupled with modest improvement in rights and freedoms, reduces the argument to some extent that the Communist Party’s regime resilience is solely the result of massive repression.</p>
<p>Another theory is that the Communist regime survives because it is able to manage elites well. The <a href="http://rendezvous.blogs.nytimes.com/2012/11/08/an-intimate-look-inside-the-eighteenth-big/">83 million members</a> of the Communist Party, accounting for 6% of the country’s population, are rewarded for their loyalty with access to influence in various aspects of political, economic and social life. The nine active members of the Politburo Standing Committee (which is rumoured to be reduced to seven), and the 2,270 delegates of the National People’s Congress who forge an even further elite cohort are managed through closed-door dialogues and compromises, and are represented in the public under the guise of little to no dissent.</p>
<p>In this setup, it is easy to suggest that the larger population does not matter – reinforcing the theory of mass repression. Whereas in the early stages of the party’s history, the masses were repressed during the “Great Leap Forward” and the “Great Proletariat Cultural Revolution”; following the events of Tiananmen Square in 1989, we see the party were graphically reminded that the mass citizenry mattered.</p>
<p>In fact, the increased maturity of the present-day Communist Party lies in the fact that it pays close attention to popular attitudes. In this vein, the third theory suggests that the party’s ability to monitor popular sentiment, via methods such as using secretive opinion polls, monitoring rumours, and anti-regime thoughts on the internet, and even attempts to control internet usage and traffic via the “<a href="https://theconversation.com/challenge-4-authoritarian-rule-and-the-internet-7544">Great Fire Wall</a>”, have proven to be useful regime.</p>
<p>The fourth theory suggests that the party survives because it is able to maintain popular legitimacy via its social compact with society. The modern social compact is performance-based, and founded on economic grounds. Crudely put, in the words of former leader Deng Xiaoping, <a href="http://www.economist.com/node/940833">“to get rich is glorious”</a>. In post-reform China, the state encourages (via laws, regulations and slogans) both the elites and masses to pursue increasing their wealth portfolio.</p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/17525/original/gkc68w3y-1352697881.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/17525/original/gkc68w3y-1352697881.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/17525/original/gkc68w3y-1352697881.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/17525/original/gkc68w3y-1352697881.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/17525/original/gkc68w3y-1352697881.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/17525/original/gkc68w3y-1352697881.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/17525/original/gkc68w3y-1352697881.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Police keep a close watch outside the Communist Party Congress at Tiananmen Square.</span>
<span class="attribution"><span class="source">EPA/Diego Azubel</span></span>
</figcaption>
</figure>
<p>If both groups continue to increase their wealth, then the legitimacy of the party is maintained. With robust growth in the economy, the resilience of the Chinese Communist Party lies in its ability to deliver economic prosperity to the majority of its citizens.</p>
<p>Embedded within the present social compact is the party’s ability to adapt and reuse political strategies of the past. While no longer on the propaganda trail of history, recent Chinese leadership has shown that it can still drum up intense domestic support by exploiting external situations.</p>
<p>For example, by fostering anti-Japanese sentiments over the <a href="http://online.wsj.com/article/SB10001424052970203922804578082371509569896.html">Diaoyu Islands</a> it has generated national support and a degree of certainty amongst the masses that the party is the one body that ensures stability in the present and future. The final theory thus suggests that such political strategies play a role in ensuring the endurance of the Communist Party.</p>
<p>The current Communist Party’s resilience suggests China may not see any meaningful political institutional changes in the near future, in spite of a new Xi Jinping administration. Nevertheless, the new administration will have to show an increased commitment to improve the livelihoods of those who do not benefit from the current social compact. Against this background, there are a growing number of Chinese citizens who have not achieved higher incomes, and have experienced reduce social services.</p>
<p>The redistributive commitments of the central state may have to increase in order to ensure the future of its regime. In this sense, if in no other, there is shared ground with the recent election in the US: economic rejuvenation is the key to success. </p><img src="https://counter.theconversation.com/content/10675/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Reza Hasmath does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>CHINA IN TRANSITION: As China goes through its secretive but widely anticipated leadership transition, the rest of the world is watching. This week, The Conversation takes an in depth look at the National…Reza Hasmath, Lecturer, University of AlbertaLicensed as Creative Commons – attribution, no derivatives.