China’s Determination In the Gold Medal Race

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun

BEIJING — An admission: I am tired of hearing the Chinese national anthem. I know this is an immature and politically impure response, but it rankles that the Chinese government set out in such a determined and calculated manner to win the gold medal race, and that they are succeeding so brilliantly.

It is also irritating that the local English-language newspapers here in China provide the daily medal count without the cumulative totals; probably no one but me bothers to do the math to see that America still leads overall. Who knew that women’s wrestling or air pistol accuracy could impact our national pride?

It is not, of course, just the medal race that’s on the line. TV-watching Americans anxious about job losses can now put a face to China’s massive in-sourcing of American manufacturing. It is an ambitious and capable face (though in some cases, only 14 years old). And it is a face determined to win.

Take the government’s widely reported efforts to clean up the air for the Olympics. The air quality in Beijing over the past couple of days has been the best for more than a decade. (Even so, there are air purifiers whirring night and day in the halls of my hotel and a haze obscuring the city’s imaginative new architecture.) In fact, Beijing’s air is deemed so fresh that government officials are now committing to keeping it this way. “New measures will ensure air quality continues to improve after the games,” the deputy director of the Beijing environmental protection bureau, Du Shaozhong, told reporters on Tuesday.

Really? The skies are blue in Beijing because of a series of draconian measures taken to satisfy the requirements of the Olympic committee. Some 300,000 cars have been banished from the city’s streets and industrial plants for hundreds of miles around have been closed. Some economists say that the disruption in output required to achieve this level of air quality will cost the country 1% of its GDP growth.

This is not likely to continue. China needs to grow, and grow rapidly, to satisfy the ongoing migration of tens of millions each year to its cities. A new report out Tuesday by the Ministry of Housing and Urban-Rural Construction says that by 2030, 60% of China’s population, or 900 million people, will live in cities. That’s up from 600 million (45% of the total) in 2007.

So, in each of the next 22 years, an additional 10 million or more folks will need to be housed, fed, and employed in China’s cities. That’s a daunting challenge, especially since these migrants are untrained and at least initially unemployable.

This reality is showing up today in the city of Shenzhen, where 8 million of the city’s 12 million inhabitants are recent arrivals, about half of whom are uneducated. A local statistician reports that only 1% of this group represents skilled workers. City officials are vowing to train increasing numbers of migrants, and to educate their children, but the cost of doing so will be huge.

Why this great exodus from the countryside? It’s simple: Television and the Internet have lifted the veil. Chinese people everywhere have seen the good life, and they want to partake. The 700 million or so that still live a subsistence life in China do so with increasing impatience. Estimates of the growth needed to satisfy these restless hordes vary, but by most counts the economy needs to expand by at least 11% to 12% a year to provide jobs for the country’s movable and growing population.

That’s a tall order, especially for a government concerned with reining in inflation and simultaneously countering a slowdown in exports. The economy expanded by 10.1% in the second quarter, compared with 10.6% in the first quarter and 11.9% a year ago. The falloff is attributed to sliding export demand from America and Europe.

For the first seven months of the year, export dollars increased 22.8%, compared to 25.7% last year. Though still high, these gains are significantly below the March 2007 increase of more than 50%. Concerned about the slackening growth rate, officials have apparently turned to their age-old weapon of choice: a cheaper currency. After gaining against the greenback by 4.2% and 2.3% in the first and second quarters, respectively, the yuan has so far retreated by 0.3% so far this quarter. The general strengthening of the dollar has been a factor in the shift, but some are speculating that the government is not averse to letting the Chinese currency slide to help boost exports.

It is a tricky trade-off, since officials have also been concerned about stemming the increase in local prices. China’s producer price index hit a 12-year high in July of 10%, compared to 8.8% in June. On top of this, Shanghai and other parts of China are beset by a slump in real estate and a punishing drop in local stock markets. The Shanghai Composite Index is off 60% from its high last October, while the Hang Seng Index traded down to its lowest point in more than a year on Monday. In fact, the Hang Seng is off more than 20% year-to-date, and more than 50% in the past year. The sell-offs reflect the economy’s slowdown and also the insanely overvalued prices that prevailed last year.

Overall, I look at the gold medal race as symbolic of the ambitions of this vast country. Narrowly focused and with all its energies aligned, it can succeed beyond expectations. Progress, however, is rarely so simple, and the government will not be able to control all the outcomes. Just ask Liu Xiang, the highly touted 110-meter hurdler who was forced to back out of the games because of an injury to his hamstring.

peek10021@aol.com


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