Today was our second-to-last lecture, our last company visit, and a visit to a karaoke bar. Yun He's lecture focused on China's economy.
Yun He managed to work the Cultural Revolution/Great Leap Forward into this as well. She explained that as peasants began the shift to collectivized agriculture, they overstated the output potential of their land to gain greater compensation. Many farmers also slaughtered their animals before collectivization which left communes with a huge shortage of livestock and work animals. The over-reporting of agricultural output also meant that when a year of bad harvest hit, the government collected almost all of a farm's output in taxes. This led to a period of massive starvation and famine. There are still conflicting views as to how much Mao and Communist Party leaders knew about this, but I contest that the government was mostly responsible for the starvation. I think that the inherent volatility of farming and the selfishness of a substantial amount of farmers. Regardless, Yun He claimed that this has impacted Chinese agriculture, to which I say: stop with the Cultural Revolution. She then moved onto the economics of modern China.
Yun He quoted a statistic that for every $1000 a product manufactured in China sells for, China as a nation only gets $100, most of the profit stays with the foreign company. This is especially true in the South, where worker compensation for injuries and wages are almost non-existent. Yun He said that now some economic centers are trying to discourage foreign investment simply because it crowds out local businesses and does not contribute as much to the economy. Chinese people prefer to work for foreign and state-owned businesses. A saying goes that if you get a government job, you are guaranteed good pay and hardly have to work at all. If you work at a Chinese firm you will have to work two peoples' jobs and will get paid very little. If you get a job with a Western firm, you will work one person's job and be paid handsomely. Yun He said that good jobs cost money, on average 10,000 RMB for a good position as a bank clerk, and around 100,000 for a similar job in a big city like Beijing. Some of her classmates graduated from a prestigious university and had great skills, but their resumes were not read until they bribed someone in Human Resources.
Yun He also said that the money that China collects from foreign companies through taxation rarely goes to the people (who are paying for the government's income with their wellbeing), it is almost all invested in foreign currencies. This means that despite the huge amount of money flowing into China, standards of living and the quality of government services have kept pace with the economy. Apparently, a large number of businesses are run by the PLA. There are many army officers who serve no purpose in the military, but instead are businessmen.
There are work creation schemes in effect in every province and town in China, for some this means hiring twice as many people as needed for a particular job. Unemployment is estimated to be at least 10%. Mandatory retirement is enforced at 55 for men and 60 for women. The One-Child policy has resulted in a shortfall into Social Benefits, leaving this generation to support 3-4 people financially.
Statistics still cannot be trusted. One of Yun He's friends was hired as an accountant for a reasonably sized city and immediately put to work making up the data to show a 50% growth in GDP in 2009. She told us to be wary of the supposed robustness of the Chinese economy throughout the recession. She also said that despite the perceived power of the authoritarian central state, the provincal and local governments still have most of the power in China and can become enormously corrupt and unaccountable. Most of this corruption goes unnoticed unless an official makes a huge blunder. A tremendous history of racketeering and bribery committed by a prominent provincial policeman only came to light after a botched attempt to cover up mining deaths and the ensuing media attention. This is one of the many reasons that businesses stick to the coast.
The karoke bar was a grueling experience for me. My intense dislike of pop music and the scarce food bathed in grease was pretty unbearable. I'm just glad that it's not a formal part of entertaining clients as it is in Japan and Korea. It was over soon enough though.
On the way back from the karoke place, I stopped to look at a cart filled with English-language books. A beggar spotted me, and sauntered over with his cup. He pressed it right into my forearm and held it there, I pushed back and continued looking at the books. He still kept the cup against my arm. So I pushed more and used my long arms to push the cup way above his head until it dumped out his change and he relented. He started cursing at me, but knew he couldn't raise a ruckus and stormed off. You need to be cautious but assertive when interacting with people on the street here.