ISSN 2330-717X

China May Have To Outsource Production – Analysis

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By Jayshree Sengupta

CHINA’S rise is apparent from the airport itself. Not just Shanghai and Beijing but also airports in smaller towns like Hangzhou, Guiyang and Wuhan are shining examples of modern airport architecture. They are spotlessly clean and well run. Then there is the amazing infrastructure even in a remote hilly place like Guiyang in southern China. Huge bridges connecting the hilly terrain have been built along the highway. Everything seems to run smoothly, and the hotels are also modern and clean.

People's Republic of China
People’s Republic of China

China has invested heavily in building office space and housing, many of which are empty. No one, of course, can own a house. Everything is on long lease. The government has built for the future and even in a city like Shanghai, which has over 20 million people, there is no sign of congestion and traffic jams are mild compared to the jams in India’s big cities. It is a well-organised city where things work smoothly. From top of the Pearl Tower one can get an idea about the skyline of Shanghai which, to my mind, has more skyscrapers than New York. It seems like a city of the future.

Down below the tall towers, people are walking about in clean streets and city squares. There is always a ubiquitous woman with a dust pan and a long brush trying to clean every piece of litter. One wonders why these women are constantly working because nobody is watching them! The railway station at Shanghai is also like the best in Europe with everything well organised and good seating arrangements for waiting passengers. The high-speed train to Hangzhou is amazing, as it is very well furnished and comfortable inside.

No doubt China has an authoritarian government. Decisions are taken at the top and by the Politburo consisting of seven members and its top leaders. The head of each organisation, whether it is a university or a village governing body, is an official of the Communist Party. Land acquisition is not a big problem. Beautifully built flats have been allotted to peasants whose farms have been acquired for industrial use. One village we visited was being industrialised according to a plan and the share of agriculture was being reduced to around 2.5 per cent of the total output of the village. This is because the silk industry is important in the area and other types of manufacturing is also being expanded.

In another village, contract farming is the norm and farmers produce honey suckle flowers for herbal tea manufacturers in the city. Yet all villages are not equally prosperous. All efforts are being made to bring the backward village inhabited by a minority community near Guiyang city into the mainstream. The instrument of change has been education. It has led to the migration of workers to the cities, and only women and senior citizens have remained to tend to farming and handicrafts.

One is struck by the high level of literacy everywhere and the health insurance schemes for village-dwellers. We visited one primary health centre which was well stocked with all kinds of medicines. As a matter of policy, the medicine prices were not marked up and were the same as the companies’ factory prices. It was a no-profit dispensary. Each village worker was also insured against unemployment and accident.

Women have to observe the one-child policy in the villages. To ensure this, there is the president of the local Women’s Federation who rides a scooter and visits families. She also, very importantly, looks after the welfare of migrant workers’ children. She coaxes women not to have more than one child. If they still have more they are fined. She also enables the women of the village to undertake gynaecological tests to ensure their good health.

Among intellectuals, there is some reservation which they are afraid of expressing clearly. There is no doubt that a top-down approach is being followed everywhere though the Dean of the Fudan University, Shanghai, argued that he is researching into the “Bottoms up” approach of China’s development. He stated that no Western model is being followed in attaining China’s fast growth. It has its own pattern. But, clearly, it has gone about in the right direction because every development model emphasises that infrastructure facilities, both social and physical, like roads, bridges, railways and housing, have to be built first. They have also achieved a high degree of human development.

One noticeable sight in smaller cities is the rapid pace of demolition of old buildings that are lying in a heap of rubble and construction of new high-rise apartments in their place. China is growing vertically in most places. A huge Walmart store is present in the centre of Shanghai. Naturally, they like the store because all things available in it are made in China. But street markets and corner stores remain popular.

Lastly, China today is about young people and their aspirations. They are into pop music and their own social media. TV has many channels but all in Chinese. CNN, BBC, etc, are available only in five star hotels. Censorship is strong and many young people who can speak fluent English miss having access to the Western media. This could become more pronounced over time as people demand more freedom of speech, expression and access to international news and views.

The Chinese growth story is truly amazing and has been triggered and driven by its industrial growth. Now that industrial growth is slowing down because of higher wages and higher standards of living, to remain competitive, China would have to outsource its production to cheap labour countries or move to another growth area – services. It is more and more aware of the immense pollution problem that rapid industrial growth has created and almost all new houses/buildings have solar panels on the roof. It has also invested heavily in alternative sources of energy. What is striking is that no city or village has either power or water shortage.

With corrective steps, China can keep on rising. Corruption is a big issue and the growing inequality. China’s new-found prosperity is apparent in the number of luxury cars on the roads in the cities. Rich people live in fancy houses and the luxury market of Western branded goods is flourishing. It would be a difficult task indeed to control the lifestyles of the rich in the future. Currently, one can see only a few beggars on the streets.

The young women are mostly stylish, clad in trendy western clothes. There are fewer women in China than men; so, they are empowered and confident. Another observation was that there were hardly any animals in the countryside as compared to India and there were no stray dogs in the cities.

(The writer is a Senior Fellow at Observer Research Foundation)

Courtesy: The Tribune, and reprinted with permission.

Observer Research Foundation

Observer Research Foundation

ORF was established on 5 September 1990 as a private, not for profit, ’think tank’ to influence public policy formulation. The Foundation brought together, for the first time, leading Indian economists and policymakers to present An Agenda for Economic Reforms in India. The idea was to help develop a consensus in favour of economic reforms.

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