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Monday, February 8, 2016

Can We Really Trust China? Comeback or Catastrophe

I am proud to be Chinese.

I am proud of our glorious history.

I am proud of the phoenix like comeback of China today where most view China as the US's next rival for superpower after being labelled the "Sick Man of Asia" (東亞病夫).

But at the same time, I am afraid...

I am not afraid OF China but FOR China and the Chinese people!

Why am I afraid?

There are 3 reasons.

The ubiquitous construction cranes
China has always been known to pay off its debts and to save money but ever since Deng Xiao Ping opened China's doors to foreign trade and investment, there has been rampant credit expansion. There is nothing wrong with credit but in China much of the investment is being funneled into speculation as shown by the meteoric rise in housing prices. Having lived in China, I have seen empty housing communities and at the same time perpetual construction of new apartment complexes. My Chinese colleagues would tell me that most of these "empty" apartments have owners because it is deemed a good investment since housing prices have only risen and everyone is looking to buy and then sell in a few years. Sounds ominously familiar...

Chinese Apartment Complex
Something else I noticed when I was living in China was the wide gap between the rich and the poor. The rich would drive around in their Ferraris and Porches, eat at the best restaurants and live in these huge villas and mansions while on the same streets, you'll see the poor riding on their bicycles and if they are lucky, their electric scooters, living in run-down apartments where hot water is a luxury and eating at make shift street stalls. Now there is nothing uncommon about seeing rich people and poor people. We can see it everyday but I thought to myself - "Isn't China Communists?". I am not political science major but I thought communism was all about sharing the wealth, having a classless society where everyone is equal. This brings me to my 3 C formula:

Capitalism + Communism = Catastrophe

In my opinion, these two ideals can not coexist. One day the poor farmer or factory worker is going to wonder "When is it going to be my turn? When am I going to drive the nice cars or eat at the nice restaurants? When am I going to wear the brand name clothing?". When that time comes, China is going to have to make a decision: Is it going to be capitalism or is it going to be communism? Being fully entrenched in the internet age where the have-nots are constantly reminded of what they don't have and modern political revolutions are being publicly broadcasted, China is going to come to this crossroad sooner rather than later. Whichever road they choose, it is not going to be pretty.

If only this river's color was photoshopped
One of the main reasons why I quit my job in China is because I wanted to start a family but I didn't want to raise my kids where the air was polluted and the water is undrinkable. Many people are unaware that this unprecedented growth in China comes at a huge price. Chinese factories routinely dump toxic waste into rivers and lakes. Highways are filled with cars and trucks with no anti-pollution devices whatsoever and recycling as we know it does not exist. What is the result? According to the world bank, 20 of the world's 30 most polluted cities is located in China. Two-thirds of China's lakes and rivers are considered sewers and at one point Time Magazine ranked Linfen, China as the most polluted city in the world. If you ask me, that is too big of a price to pay for any type of growth.

The outlook is bleak but I already see that China is pushing hard for the clean energy initiative and is the world's supplier for solar panels. There is still much work to be done and I hope for the sake of my extended family living in China and the Chinese people that a solution is found to prevent the seemingly inevitable catastrophe.
Wind of Change...I hope

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