Kina: The Rise of the Dragon

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Re: Kina: The Rise of the Dragon

Innlegg Ultima_Thule 06 Jan 2014, 21:33

China 2020 -- Strong, rich and unhappy

Buildings are seen in the haze in downtown Shanghai Dec. 1. According to the U.S. consulate air quality readings, which measure PM2.5 particulates, Shanghai's air quality was "very unhealthy." © Reuters

DALIAN, China -- This past summer, managers at BMW's joint venture factory in the northeast Chinese city of Shenyang received a note from the Ministry of Environmental Protection informing them that the Chinese government would not be approving the plant's third phase expansion, scheduled for 2017.

The denial sent shock waves that reached BMW's headquarters in Munich. The Shenyang Tiexi plant, which opened last year, is one of the company's most environment-friendly production sites. Natural sunlight from the roof provides light, while breezes from outside cool the heavy machinery busily working inside. At the factory's paint shop, cars take a rotational dip in a pool of paint, in a way that reduces the amount of waste water and paint usage as much as possible. Energy consumption for this process, less than 500 kilowatt-hours per vehicle, is a third of what was common 10 years ago. Moreover, BMW paid 10.17 billion yuan ($1.66 billion) in taxes last year, making it by far the largest taxpayer in Shenyang, paying almost three times the amount of second place Shanghai General Motors. The sudden slap on the wrist caught the automaker off-guard.

Why the sudden cold shoulder? A few days later, an article in the People's Daily, the Communist Party of China's mouthpiece, gave a hint of what was behind the government's decision. In an interview, Environmental Protection Minister Zhou Shengxian said, "We don't want to be driving BMW sedans while drinking polluted water. That is not the kind of industrialization and modernization we are looking forward to."

Regardless of whether the decision was scientifically correct or not, the government's action is a reflection of the mixed feelings that many Chinese feel toward their future. BMW's Tiexi plant is about to become the company's largest single production facility in the world. China is already the most important market for global automakers. But with every car that is sold, transport becomes increasingly inconvenient as roads get clogged, and air quality becomes even more unbearable.

China is expected to become the world's largest economy by 2020. Its political weight is expected to expand significantly as well. But that rise will come with some serious consequences. By the beginning of the next decade, China will be strong, rich and probably unhappy.

The good life

On the brighter side, Chinese people will be richer. The government promised last year to double per capita gross domestic product by 2020.

On Nov. 11, China's Singles' Day, e-commerce group Alibaba sold a record 35 billion yuan worth of goods online.

Nov. 11 is a day when everything on the Internet is on sale, to cheer up the singles who are supposedly reminded of their loneliness by the many 1's in the date. Alibaba's sales that day were four times the amount sold in the entire U.S. on last year's "Cyber Monday" following Thanksgiving.

Another pleasant phenomenon for the Chinese is the "China-ization" of Hollywood. Box office revenues in China were up 35% year on year during the January-September period, already surpassing last year's total. After overtaking Japan to become the world's second-largest cinema market in 2012, China is on its way to overtake the U.S. sometime in 2018-2020. Wang Jianlin, chairman of the Dalian Wanda Group, the biggest operator of cinemas in China, said that by 2023, box office sales could even be double those of the U.S.

As a result, Hollywood studios are changing their scripts to contain more China-friendly storylines. Villains are less likely to be Chinese; those roles are increasingly given to Russians or North Koreans. Chinese actors are usually on the good side now. By 2020, expect to see Chinese names among the first to be mentioned in the credits as you walk out of a cinema.


By 2015, the number of Chinese tourists traveling abroad is expected to reach 100 million, a twentyfold increase from 1996. The Chinese are the biggest consumers of luxury goods by nationality. Be it in New York, London, Paris or Beijing, nobody buys more handbags and wallets than the Chinese. Multinational companies simply won't be able to form a global strategy without the Chinese customer front and center. After all, one in every five persons on earth is Chinese.

The price of happiness

But such scale can be a burden, too. China has to feed 20% of the world's population on 9% of its arable land, with 6% of its fresh water. Why is the Chinese ambassador in Sierra Leone constantly meeting with the local agricultural minister? Because China's sugar imports will double by 2020, and the West African country is a potential supplier. Why did China gather the agricultural ministers of more than 20 Latin American and Caribbean nations in Beijing to launch a forum for agricultural dialogue? Because most of the world's remaining arable land is located in South America and Africa.

Compared with food, water is a more serious concern because it cannot be imported. Beijing, a city of 20 million people, has 100 cu. meters of water resources per capita per year, one tenth the internationally recognized water shortage warning line. Consecutive droughts have dried up reservoirs, rivers and lakes. Water is being pumped out of underground aquifers for agriculture so fast that it may never be replenished.

China's demographics are another source of concern. Due to the decades-long one child policy, families have preferred boys, and would often opt for abortion if the child was female. That resulted in an unnatural gender balance. In 2010 there were nearly 20% more boys born than girls. In 2020, more than 10 million men will be unable to find spouses. There just aren't enough girls in China.

Will China be a dominant force in the South China Sea? The answer to that might lie in climate data rather than military statistics. By 2020, China will be using northern routes in the Arctic Ocean for possibly 15% of its container shipping, according to a Chinese think tank. Global warming is melting the Arctic ice at a historic pace, and what used to be an ice-locked sea is quickly developing into a shorter route from Asia to Europe. As China slowly moves away from the choke points of the Strait of Malacca and the Suez Canal, its diplomatic priorities will change too. Members of the Arctic Council, especially countries that border the Arctic Ocean -- namely the U.S., Canada, Russia, Norway and Denmark (via Greenland) -- will emerge as key countries for China, and these will be where Chinese leaders will visit the most. On the contrary, tensions in the South China Sea could ease, as China becomes less dependent on southern shipping routes.

Everyone's business

Whether China rises or falls, the consequences will be felt around the world. There was a time when most of the shrimp caught off New Zealand headed to Japan. Now they are shipped to China, whose merchants are usually willing to pay more than their Japanese counterparts. By 2020, China's seafood imports may triple from what they are today, and that would make it difficult for sushi restaurants in Tokyo to maintain the current menu.

Columnist Thomas Friedman wrote in The New York Times last year that if the "Chinese Dream" that President Xi Jinping often talks about is similar to the American Dream (big car, big house and Big Macs for all), "then we need another planet."

So reform is needed. Appropriately, Xi mentioned the word gaige (reform) 59 times during his speech at the Third Plenary Session of the Central Committee of the Communist Party of China that closed Nov. 12. "Decisive results in reform are required by 2020," he said.

In the age of social media, it doesn't take long for the public to notice that other people around you are unhappy too. China now has 500 million users of Weibo, the Chinese equivalent of Twitter, and 500 million users of group messaging system WeChat. That's an awful lot of eyes and ears.
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