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Diaosi, which has a crude translation, was originally used to curse someone as a loser. But the phrase has gone mainstream since 2011 and is widely used by young Chinese as a trendy way to describe and poke fun at their own low status.

An estimated 526 million identify with the term, or 40 per cent of the Chinese population, said a survey recently released by online game developer Giant Interactive Group and yiguan.cn, an IT market analysis website.

The survey reflects the rise of a particular generation mostly born in the post-1980s and just starting their careers. They largely live on online, where they are able to unleash their frustrations and play out fantasy scenarios. In real life, their diaosi identity is worn as a badge of honour, especially for those who have made it big.

Linhai Tingtao, from fantasy to fame

“I’m one of the diaosi,” said Lin Hai. “We are common Chinese who are fighting for our dreams.”[...]

[Source]

Last month, the empowering profanity loomed high over Times Square, advertising a new Chinese online game. Want China Times reports on the incident and the meaning of the term:

An advertisement for a Chinese online game, The Mythical Realm, was pulled from digital billboards in New York’s Times Square due to use of the Chinese word “diaosi,” a self-deprecating term for young Chinese internet users, because the character “diao” refers to the male reproductive organ.

Young internet users in China refer to themselves as diaosi because they feel marginalized in society, without the ability to communicate effectively or affect changes in their lifestyle, feeling lost in an ever-changing environment which seems to be leaving them behind, according to our Chinese-language sister paper Want Daily.

The ad was removed because the slogan violates US regulations which prohibit broadcasting indecent language. As a result, Times Square authorities have halted all Chinese-language advertisements in order to re-examine their contents.

[Source]

More on the cultural significance of diaosi can be found in Tech In Asia’s coverage of the now-removed ad:

“Dick strings” — diaosi in Chinese — is a term that originated several years ago on Baidu’s Tieba forums. As you might expect given its literal meaning, diaosi was not a term of endearment, it referred to people who were: “poor, short, ugly, fat, stupid, excessively-masturbating failures.” ChinaSmack suggests “loser” and “douchebag” as more succinct translations of the term’s official meaning, and both of those seem apt enough.

Over time, though, the usage of the word has changed dramatically. Although it still means “loser”, it has been co-opted by a particular subset of the online community and used as a sort of self-definition. Perhaps similar to the term “geek” in the US or otaku in Japan, diaosibegan as an insult but has become something that many Chinese gamers and internet users self-identify as. These days, the term has real appeal to many who see themselves as perhaps not blessed with wealth or beauty, but still passionate about gaming and the internet. It’s a rallying cry and a way of relating to one another that’s self-deprecating but (some would say) also empowering.

[...] In a lengthy analytical piece, Sina Tech argues that the term doesn’t really mean “dick strings,” and points out that other Chinese terms like niubi (“badass”) have rather disgusting literal meanings but have become fairly normalized and acceptable in everyday speech nevertheless. It even (without irony as far as I can tell) points to the controversy surrounding George Bernard Shaw’s use of the term “bloody” in the play Pygmalion as a similar example of a controversy over “vulgar” language that ultimately became rather non-controversial as time passed and people got used to it.

[Source]

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Post tags: inequality, Internet culture, slang, wealth gap, youth culture
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In March, China completed its transition to a new leadership team. The usual fanfare — masses of black limousines bringing nearly 3000 delegates to the Great Hall of the People to hear proud speeches about the country’s three decades of economic growth and waxing international influence — was dampened by a sense that, by the next time the party comes to town, there might not be as much to celebrate. Xi Jinping, the new leader of the Chinese Communist Party, and his colleagues have repeatedly expressed alarm at increasing social protests. According to confidential but widely circulated Chinese police estimates, there are now about 180,000 mass protest incidents each year, roughly 20 times more than there were in the mid-1990s. China’s leaders portray the surge of protests as fueled by popular outrage over the yawning gap between rich and poor — a chasm that the leaders have spent a decade trying to close. In reality, though, Chinese citizens are angry about a different gap: the one between the powerful and the powerless. The CCP has turned a blind eye toward this problem. Unless the situation changes and China’s new leaders start finding ways to temper popular outrage over procedural injustices and official corruption, the prospect that they will maintain political order until the next leadership transition is bleak.

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Post tags: economic growth, inequality, political reform, social stability, wealth gap, Xi Jinping
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Perhaps no work of fiction has returned to me more often over the past eight years in China than F. Scott Fitzgerald’s slippery tale of James Gatz of North Dakota, who thrust himself into a new world in desperate, doomed pursuit of love and ambition—a life in which the “dream must have seemed so close that he could hardly fail to grasp it.” I’ve stood in Shanghai, bathed in the lights of a new skyline, and thought of Gatsby’s glimpse of New York, with “the city rising up across the river in white heaps and sugar lumps.” And at times it’s been hard to think of anything but Fitzgerald’s “universe of ineffable gaudiness”—upon seeing, for instance, the Korean boutique in Beijing with the English name “PRICH: Pride & Rich.”

But to Chinese readers, who have read Gatsby (in translation or in English) for decades, the story has acquired new layers of relevance in recent years, as the initial rush of China’s boom has given way to a more complex economic phase. When Chinese readers talk about Gatsby today, some see a cautionary tale of materialism run amok; others point to the potential danger in the gap between riches and power; and still others recognize the dawning realization that that one may never grasp the dream he so desires. “After Gatsby was gone, no one cared,” a Chinese blogger named Xiao Peng wrote not long ago. “Not his business partners or his friends or his guests. Once everything became clear, Gatsby’s life evaporated like smoke.”

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About 1.2 billion people in the world lived in extreme poverty in 2010, subsisting on less than $1.25 a day [in 2005 PPP U.S. dollars]. That’s down from 1.9 billion three decades ago despite a nearly 60% increase in the developing world’s population.

[…] The sharpest decline came in China, where the extreme poverty rate fell to 12% in 2010 from 84% in 1981. India’s extreme poverty dropped to 33% of the population from 60% three decades ago.

[…] More than three-fourths of the world’s 1.2 billion poorest people live in rural areas, the bank said in a separate report Wednesday. Urbanization has been a key driver in reducing extreme poverty. About half the world’s total population now lives in rural areas.

China’s share of the world’s extremely poor population also fell from 43% in 1981 to 13% in 2010. Despite the country’s overall population growth of over 300 million during this time, the number of Chinese living in extreme poverty crashed from 835 million to 156 million people. Life expectancy at birth climbed from 67.8 to 74.8 over the same period from just 35 in 1949, according to China’s Ministry of Health and National Bureau of Statistics.

Earlier this month, World Bank president Jim Yong Kim called for an international effort to bring the global extreme poverty rate below 3% by 2030.

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Older Chinese, especially those now in their fifties or sixties, often seem like immigrants in their own country. They have that same sense of disorientation, of struggling with societal norms and mores they don’t quite grasp, and of clinging to little alcoves of their own kind. In their relationships with their children, they remind me of the parents of the Indian and Bangladeshi kids I grew up with, struggling to advise their children about choices they never had to make. Yet for all the dissonance that geographical dislocation creates, the distance between a Bangladeshi village and a Manchester suburb is, if anything, smaller than that between rural China in the 1970s and modern Beijing.

Immigrants often have a stable set of values from their home culture from which to draw sustenance, whether religious or cultural. But for the children of the Cultural Revolution in China, there’s been no such continuity. They were raised to believe in the revolutionary Maoism of the 1960s and ’70s, and then told as young adults in the late 1970s that everything drilled into them in their adolescence had been a terrible mistake. Then they were fed a trickle of socialism, rapidly belied by the rush to get rich, and finally offered the hint of a liberal counter-culture in the 1980s before Tiananmen snatched it away. In the meantime, traditional values condemned as ‘counter-revolutionary’ in their youth are being given a quick polish and propped up as the new backbone of society by the authorities.

[…] However, while the relationships between the post-1980 generation and their parents are fraught with bitterness — whether over careers, houses or marriage — the distance between them and their grandparents is, curiously, much smaller. ‘My grandmother took my ambitions to be a journalist seriously,’ said Lin Meilian. ‘And she was the first person to teach me English, from when I was very small. I had so much more in common with her than my mother.’

Lin continued: ‘My grandmother grew up in the 1930s and ’40s, when China was much closer to the world, and so she understood how I see things.’ It was a sentiment widely echoed, and not just because of the usual grandparental affections. The cosmopolitanism and potential of a time before China closed its gates bridged generations, but so did the willingness of grandparents to talk about their past.

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The debate was unusually broad, ranging from the need for property taxes and agricultural support prices to the role of the state in influencing returns to firms and labor. Given the lack of details and firm targets, it’s not clear whether this plan will effectively tackle the sources of inequality that are most harmful to development.

Rapidly growing economies tend to experience widening disparities. China’s growth has lifted some 600 million out of poverty even as its Gini coefficient, a measure of income inequality, has soared to 0.47 today from 0.25 in the mid-1980s. Although high, China’s Gini is comparable to that of the U.S. and other relatively successfully Asian economies such as Singapore and Malaysia.

The Gini number is less important than the reasons behind it. Inequality is positive when it emanates from productivity increases, entrepreneurial risk-taking and structural changes that produce sustained growth. Harmful inequality comes from distortions that ultimately undermine the development process.

It is the latter kind of inequality that Beijing has been slow to address. First, policy distortions have exaggerated geographical disparities. Second, the government budget has failed to provide equal access to social services. And finally, links between government-party officials and commercial activities have led to excessive rent-seeking.

For The Diplomat, Eve Cary writes that time will tell if the Communist Party can execute on its plan and preserve its legitimacy:

Indeed, the plan, in development for several years, is quite ambitious. It is the specific points–such as garnishing more profits from SOEs and spending more on social services–that have a better chance of success, though at first they may face considerable political pushback. It will be interesting to see how far these reforms go, considering that the new Politburo Standing Committee is dominated by the Jiang faction, with 6 of the 7 protégés of the former president, according to Brookings Institution scholar Cheng Li. Of those 6, 4 are princelings, or sons of Chinese Communist Party revolutionary heroes. In general, Jiang’s faction- sometimes referred to as the Shanghai gang- and the princelings promote the interests of the middle class, entrepreneurs, and the coast, as opposed to the populists, who tend to promote the interests of the common people.

There are other reforms in the pipeline, as well. Last November the State Council backed policy changes that aim to strengthen the property rights of farmers, including such measures as identifying and registering land, and issuing land ownership certificates to farmers. This policy was pushed through by outgoing populist premier Wen Jiabao. Affordable housing has also been a hot issue: in 2012, the central government allocated 37.1 billion dollars (233.26 billion yuan) for subsidized housing projects, up almost 40% from the previous year.

Of all the problems that China faces in the next 25 years, the income gap–and all of the associated issues–is perhaps the most dangerous for the Communist Party and future social stability. For example, in its 2013 Social Development Blue Book, the Chinese Academy of Social Sciences notes that there have been 100,000 “mass incidents” (large protests) every year for several years, and that half of these protests are related to land grabs.

It has become a commonly-held belief among China watchers that the CCP has remained in power through a Faustian bargain with its people–it retains power as long as it maintains economic growth. With so many left behind, there is a growing contingent who are left out of this deal, and they are become increasingly vocal. Despite the elitist bent of the new Standing Committee, one hopes that they have the foresight to continue to focus on this critical issue, and develop effective solutions to it.

See also previous CDT coverage of China’s income inequality.

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Most people the couple met along the way were warm and welcoming — and surprisingly spontaneous. But Ms. Fischer and Mr. Braschler did run into trouble, logging three arrests during their journey. In a place like China — here follows a travel tip from the experienced — it is best to be discreet when using a 4-by-5 camera equipped with a flash and a soft box to make a portrait of a trash collector.

“People loved it at the beginning,” Ms. Fischer said. “You have to imagine — dozens of people surrounding us while we shoot.”

But when they tried to make a portrait of a truck mechanic in Xinmin, Liaoning Province, bystanders agreed that the man was too dirty; he would give an international audience a negative impression of the country.

[…] Yet they were overwhelmed by the beauty — and the range — of the physical landscape, mountains and all. “It was just so much to digest,” Ms. Fischer said.

Twenty of the pair’s images are included in a slideshow at Lens.

In an op-ed accompanying some of her own photographs, Sim Chi Yin also described the challenges of engaging with her subjects, the rich and poor on opposite sides of China’s yawning wealth gap.

With the “rats” and “ants,” the trash collectors, cobblers and couriers, it took time to build rapport and trust. But it was even harder to get wealthy Chinese — perhaps like rich people everywhere — to open up. Most live in gated, guarded communities on the outskirts of the city, and socialize behind closed doors. A few months ago, I was granted rare permission to photograph inside an exclusive club in Beijing for high rollers, and only at a party where some members were in costume.

The migrant workers and the poor mostly accept that life is unfair, at least for now.

“There is no difference between me and the people who live in the posh condominium above,” Zhuang Qiuli, 27, a “rat tribe” pedicurist who lived in a basement apartment, told me in Beijing. “We wear the same clothes and have the same hairstyles. The only difference is we cannot see the sun. In a few years, when I have money, I will also live upstairs.”

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Known as the Gini coefficient, the index has been retreating gradually since hitting a peak of 0.491 in 2008, dropping to 0.49 in 2009, 0.481 in 2010 and 0.477 in 2011, Ma Jiantang,director of the National Bureau of Statistics, told a press conference.

The index stood at 0.479 in 2003, 0.473 in 2004, 0.485 in 2005, 0.487 in 2006 and 0.484 in2007, Ma said, citing NBS calculations.

The Gini coefficient has stayed at a relatively high level of between 0.47 and 0.49 during the past decade, indicating that China must accelerate its income distribution reform to narrow the rich-poor gap, Ma said.

“After the financial crisis in 2008, China’s Gini coefficient gradually dropped from the peak of0.491 that year as the government took effective measures to bring benefits for its people,” Ma said.

The World Bank also issues Gini coefficient findings, but has not done so for China since 2005, Reuters reports:

“We should improve our efforts to divide the cake. When we are building our ‘well-off’ society, we should not only double people’s average income and GDP, but also better distribute the national wealth and give mid-to—low income residents a bigger part of the pie,” Ma said, echoing policy priorities among some fiscal reformers.

Ma said the World Bank put China’s Gini coefficient at 0.474 in 2008. The World Bank’s last published figure – 0.425 – was for 2005.

A recent survey by a Chinese university in Chengdu, the Southwest University of Finance and Economics, put the country’s Gini coefficient at 0.61 in 2010.

China has 2.7 million U.S. dollar millionaires and 251 billionaires, according to the Hurun Report, but 13 percent of its people live on less than $1.25 per day according to United Nations data. The average annual urban disposable income is just 21,810 yuan ($3,500).

Critics are skeptical of the new official numbers, the South China Morning Post reports:

“A reporter called and asked me to comment on today’s data, but wouldn’t I be crazy to comment on a fake figure?” said Xu Xiaonian, a respected economist and professor at China Europe International Business School onhis Weibo, China’s twitter-like service.

“Speaking of our Gini coefficient, even in fairy tales they wouldn’t dare to write like that,” Xu said.

“Haven’t we always lived in a fairy tale?” commented a netizen.

“All the rich people have emigrated and that’s why our Gini coefficient is declining,” said another.

Due to the yawning gap between rich and poor, some have called the numbers the “Lamborghini” coefficient, but Bloomberg reports that the apparent narrowing of the income gap is ‘good news’:

The decline since 2008 reported today contrasts with the U.S., where the income gap between rich and poor grew to the widest in more than 40 years in 2011. U.S. Census Bureau data released in September showed the measurement rose to 0.463 from 0.456 in 2010. The figure has risen steadily from its 1968 low of 0.351.

Ma said Gini figures for 2009 for countries with similar development levels to China showed Mexico at 0.48, Argentina at 0.46 and Russia at 0.4.

While the narrowing shown in today’s data is “good news,” China’s wealth gap continues to widen as property prices rise and homes become less affordable for migrant workers, Lu Ting, chief Greater China economist at Bank of America Corp. in Hong Kong, said in an interview today.

“If migrant workers want to settle in Chinese cities it’s getting much more difficult than before and it’s a big barrier for urbanization,” Lu said. “How can they afford to rent or own a home in urban areas?”

According Al Jazeera, estimates of the figures have varied, and inequality may have increased between urban and rural areas:

However, Professor Martin Whyte, a sociologist at Harvard University who has carried out research on attitudes towards inequality in China, said he found the figure of 0.61 hard to believe. “The best survey research on income gaps leads to the same conclusion that the figure [Gini coefficient] is rising but is nowhere near these sort of figures,” he said.

Inequality may also have increased between the country’s wealthy east coast, where the major cities of Shanghai and Beijing are located, and the rural interior. Earlier this year, the gap between urban and rural areas was highlighted with the news that students in an area of Hubei Province had to provide their own desks for school, in stark contrast with the air-conditioned schools in the country’s largest cities. The gap between urban and rural incomes is about 26 percent higher than in 1997 and 68 percent higher than in 1985, according to a report by the Chinese Academy of Social Sciences.

In an article for the Economic Observer, Sun Liping, a professor at Tsinghua University, reffered to research estimating that there were 180,000 protests, riots and other mass incidents in China in 2010. However, it is not known if any were directly related to income inequality, and Gan said he had found no evidence that the figure of 0.4 was a warning line for social unrest. But he added: “There is lots of research saying that it is not income inequality per se that affects social instability, it is unequal opportunities. If there [are] vastly unequal opportunities, people will feel unsatisfied.”

While income inequality is a major issue for Chinese citizens, commuters in Shanghai had confidence in the Chinese government’s ability to solve the problem. “There is now a limitation of the top salary,” said Sun Xue Hong “For the poor, the government is trying to increase their salary at the same time. So this way the gap can become smaller and smaller.”

Aside from addressing the Gini coefficient, Ma also stressed the drop in the nation’s working-age population, a shift which could have an impact on China’s family planning policy and economy:

What he went out of his way to stress was the drop in the nation’s working-age population, covering those between 15 and 60 years old. The total slipped by 3.45 million over the year to 937 million. That’s still a huge number, but Mr. Ma noted it was the first absolute drop in many years.

Asked whether the new numbers might mean it’s time for a change to the one-child rule, Mr. Ma moved ahead slowly. “As the statistics bureau chief, I am actually not well positioned to comment on our one-child policy,” he said, before adding he would like to express some of his own thoughts.

“After decades of population control, we are seeing some changes in labor force demand and supply, though the change is preliminary. To respond to the change, I think it’s appropriate to research a more proper, scientific policy while insisting on control measures.”

He also said perhaps “there could be a flexible adjustment in the way we employ people and the limits on the working age.” In a belated acknowledgement of the sensitivity of the issue, that remark later disappeared from the online transcript of the news conference.

See also CDT Money: Uncertainty Looms in 2013, via CDT.

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Post tags: gini coefficient, inequality, one-child policy, wealth gap, World Bank
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China, after all, is fast approaching income levels associated with the “middle-income trap,” the point at which many other countries have moved from rapid to sluggish growth. This trap opens up for several reasons, including that economies expand disproportionately, at early stages of development, by shifting workers from agriculture to manufacturing. At some point, though, the gains from such shifts disappear, and new sources of growth are needed. China appears to be near this point.

[…] What would be the consequences if China falls into the trap? According to Yasheng Huang, a professor of management at MIT, slower growth could destabilize China’s internal political economy. That, in turn, could prove to be the far larger risk for other nations.

In a similar vein, China specialist Susan Shirk of the University of California at San Diego warns that it is China’s “internal fragility, not its growing strength, that presents the greatest danger.” And Aaron Friedberg, a professor of politics and international affairs at Princeton University, writes that a less prosperous China “may be a less effective competitor in certain respects, but it could also prove to be less predictable, more aggressive, and hence even more dangerous and difficult for the United States and its allies to manage.” Friedberg says weak leaders in China might be tempted to rally popular support by confronting other countries.

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The Gini coefficient, an index measuring income inequality, was 0.61 in 2010, based on a survey of 8,438 households by the Survey and Research Center for China Household Finance, a body set up by the Finance Research Institute of the People’s Bank of China and Southwestern University of Finance and Economics. The survey also estimated the urban jobless rate in July 2012 was 8.05 percent, almost double the official figure.

[…] “China’s wealth gap is so prevalent between regions, sectors, and urban and rural that it’s impossible to see a meaningful decline in the Gini coefficient in the short term,” Gan Li, director of the Chengdu-based center and a professor at Texas A&M University in College Station, Texas, said at a briefing in Beijing today. “Depending on market forces alone can’t resolve the gap and China must change the structure of income distribution and rely on massive fiscal transfers to narrow such a yawning disparity.”

Higher fiscal revenue and a bigger share of state-owned enterprises’ profits could give the government about 3.8 trillion yuan ($610 billion) a year to spend on income redistribution, said Gan, who has a doctorate in economics from the University of California at Berkeley. In the long run “China needs to beef up funding for education and reduce inequality of opportunity to lower the income gap,” he said.

Although higher than expected, the new figure may still be too low. From Chen Dujuan at Global Times:

Zheng Xinye, a professor at Renmin University of China, told the Global Times Sunday that the real Gini coefficient may be even higher than 0.61, since the super-rich are hard to reach for surveys.

“The widening income gap was caused by restrictions that kept small and medium-sized companies from entering high-profit sectors, as well as by employment discrimination,” Zheng said. Data showed that the wage gap between finance and agriculture, which earn the highest and lowest wages respectively, has widened to a ratio of 4.2 in 2010 from 2.24 in 1997.

Zheng said that low standards for labor and environmental protection have increased the wealth of the rich at the cost of the health and income of the poor.

[…] Greater urbanization will ease the income gap, Pan Jiancheng, deputy director-general of the China Economic Monitoring & Analysis Center of the National Bureau of Statistics (NBS), said at the survey release press conference, noting that China needs to boost economic transformation and improve social security.

The Gini coefficient is not a definitive or comprehensive measure of inequality, however, its widespread use arising in large part from its simplicity and convenience. Mark Gimein described the measure’s limitations at Slate (via Trey Menefee) in 2008:

[…] Measuring inequality, or what most people think of as inequality, is not simple. And, perhaps more importantly, the standard measure of inequality tells us a lot less about poverty than we might think or hope.

To see why, let’s look a little bit into the mathematics of inequality. The Gini index is a number that expresses the proportion of income that goes to people on various steps on the economic ladder. In a country in which everyone has exactly the same income, the Gini coefficient will be zero. On the other hand, in a country in which all the income goes to one person, the Gini coefficient will be 1, and the Gini index will be 100 (technically, it’ll never reach the perfect 100, but it’ll be incredibly close). In real life, the United States has a Gini index of 45, and Norway’s is 28.

[…] The problem here is that Gini index alone does not yield enough information to indicate what proportion of a country’s people are poor—even if we know the country’s total income. A measure omitting that crucial concept doesn’t get to what people really mean when they talk about inequality. Take it out, and most of the rhetoric about inequality loses its soul.

Comparing the Gini coefficients of countries at different stages of development is also problematic, as Tsinghua University economist Wei Jie explained to People’s Daily Online in 2006.

At The Wall Street Journal, Tom Orlik described the study’s findings on unemployment:

The survey represents the most ambitious attempt yet to map China’s labor markets, household income and asset ownership—areas where the official data are widely regarded as inaccurate or deficient.

Employment is a hot-button issue for China’s ruling Communist Party, with the risk that high levels of joblessness could trigger destabilizing unrest. At the end of 2008, severe job losses for migrant workers helped prompt the government to unleash a massive stimulus package.

[…] Despite a significantly higher rate of unemployment than reported by the government,China’s labor market still appears to have weathered 2012′s growth slowdown relatively well. A loss of around 4.5 million jobs for China’s migrant workers in the past year has taken their unemployment level to 10 million, still well below the 23 million out of work in 2009.

That the official figure seems inaccurate comes as no great surprise. Last month, Caixin’s Zhang Huanyu pondered the official urban unemployment rate’s mysterious steadiness since the start of 2010:

The urban unemployment rate announced by the government has remained at 4.1 percent from the start of 2010 to June 30. Even during the worst of the global financial crisis in 2009, the figure climbed to only 4.3 percent.

When I talk to government officials and scholars, they unintentionally reveal the importance they attach to the statistic. But the fact the figure barely changes is a sign its accuracy can be doubted. Unfortunately, this is true of many statistics released by government agencies in China.

[…] The National Bureau of Statistics once promised that starting in 2011 it would release more accurate unemployment figures, but so far we haven’t seen them.

In March, bureau director Ma Jiantang was asked about the unemployment rate and said: “From the research we have done, the gap between our data and the real situation is narrowing.”

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Post tags: gini coefficient, income gap, inequality, migrant workers, social stability, unemployment, urban population, urban rural divide, wealth gap
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This new regime will govern a China that is increasingly two different countries. On the coast, the country is developed, with the amenities of a post-industrialized society. In the countryside, China is still a developing country, with hundreds of millions of people living in poverty. In 2010, according to Bloomberg Businessweek, there was a nearly threefold difference in per capita incomes between coastal China and inland China. Likewise, China now has more income inequality than the United States, making China 27th in the world overall.

Those Chinas want different things from their leaders. People making $20,000 a year in prosperous cities don’t need 8 percent growth. They need product safety, government accountability, transparency, clean air and water ‑ good government, in other words, without all the lies and the secret wealth. People in the interior, on the other hand, need growth and goods. Government transparency means less to those who live hand to mouth.

This is what the 21st century economy has wrought, but China clings to its 20th century political system. Ten years ‑ the expected stint of the current Politburo members (though there will be room for halftime adjustments) ‑ is a long time to live with so fundamental a contradiction. Pressures will mount from within and without for China to modernize its political approach to match the economic reforms it must undertake. But those hoping for political reform are sure to be disappointed, no matter how much they pine for them on Weibo or in the halls of the United Nations. The leadership change, remember, was all about solidarity, both for the Communist Party and with the party’s past efforts. Citizens on both ends of the spectrum may grumble, but the Chinese leadership will continue its slow and cautious approach ‑ and its focus, first and foremost, will be on consolidating power and eliminating threats to the party’s hold on power. On the Politburo’s list of priorities, political innovations will run a distant second.

Meanwhile, though little evidence remains of the 18th Party Congress which took place earlier this month, The New York Times’ Amy Qin reports that nostalgia still lingers for some residents of Beijing:

Liu Ji, 63, was one of the many sprightly retirees called upon by security officials this month to work as informal traffic cops, taking to the streets to keep unruly pedestrians and drivers in line. In a city with more than five million registered cars, it was not the most relaxing task. But Ms. Liu, a longtime Communist Party member, said it was an honor to play a role during the weeklong event, even if it meant tackling the city’s nightmarish congestion equipped with only a red armband and a flag.

“To help out even just a little is a glorious feeling,” she said.

But now, the heart of this ancient capital has returned to what passes for normal these days: hazy gray skies above the granite expanse; crowds of tourists, both Chinese and foreign, milling around and posing for photographs; and uniformed security officers watching them carefully in front of the Forbidden City. (Less familiar was the sight of some of those officers zipping around the square on two-wheeled, Segway-like vehicles as the ageless Mao Zedong gazed down from his portrait.)

Elsewhere, pirated DVDs and English-language books on China have reappeared on shelves after having been relegated to storerooms in some shops. Several prominent activists who were asked to leave Beijing during the conclave have slowly found their way back to their homes.

© Scott Greene for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us
Post tags: 18th party congress, Beijing, inequality, leadership transition, Politburo Standing Committee, reform
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In a short follow-up article at The New York Times, Barboza explained how he had obtained these documents:

Thirty years of economic reform — and government policies aimed at attracting foreign investment — have created a set of government agencies that keep records on private corporations and their major shareholders, including copies of resumes and government-issued identity cards.

It is this system that allows news organizations, including The New York Times, to request and review corporate records. Although ordinary citizens are not allowed access to the records, they can hire a lawyer or consulting firm to request documents for a fee of $100 to $200 per company. The Times used this process in obtaining thousands of pages of corporate documents to review the business networks controlled by the relatives of Prime Minister Wen Jiabao.

More details on the year-long investigation came from the Times’ public editor, Margaret Sullivan, who revealed that the newspaper had discussed the article with Chinese officials. The warning this provided may have contributed to the unusual speed with which censors pounced in the early hours of Friday morning.

Joseph Kahn, the foreign editor, told me that he knew when the reporting on this story began – about a year ago – that it would be a “threshold issue” for the Chinese government.

“I expected it to test the limits of what they would tolerate from the foreign media,” he said. (In speaking with me, he emphasized that Mr. Barboza’s direct editor on the story was Dean Murphy, a deputy business editor.)

“For us, this is just classic New York Times investigative journalism,” Mr. Kahn said. “It’s what reporters do. For them, this is not what reporters do. This is what reporters are banned from doing.” He said he believed that, by various means, the story is still getting out in China and that “it has done nothing to diminish the reputation of our journalism.”

Mr. Kahn said that as recently as Wednesday, Mr. Sulzberger and the executive editor, Jill Abramson, met with Chinese government representatives at The Times. But the focus of that conversation was not about the journalism – it was about a political and cultural differences.

In short, Chinese officials were making the case that The Times not publish the article.

From some angles, this case must have looked persuasive. As Sullivan noted, the Times is now exiled from China just months after investing heavily in a Chinese-language site. It faces irate advertisers—who were not forewarned of the article and its likely consequences—at a time when ad revenues are already dropping sharply. But at The Guardian, Michael Wolff argued that the moral victory is well worth the immediate financial cost:

The Times’ story, by David Barboza, is the type of journalism that not only catches the powerful in flagrante delicto, but that revivifies the paper’s reason for being. This has not been a kind few years for the Times, with its management, its journalism, and its prospects, under constant and more often than not unflattering scrutiny. But a story like this is something of an instant brand turnaround.

The New York Times took on China and, in the first round, won. This being China, the Times will, surely, be engaged in a constant battle going forward – even, perhaps, a confrontation that defines the sides in some new international press battle. That will, no doubt, be to its short term economic disadvantage. But that is good news for the Times, too.

[…] The Times released dismal earnings yesterday and its stock dropped by more than 20%. But its real value took an incalculable leap today.

Reactions were not uniformly rapturous, however. The Chinese government voiced its displeasure through both heavy online censorship and its Foreign Ministry spokesman. From the BBC:

“Some reports smear China and have ulterior motives,” Foreign Ministry spokesman Hong Lei said when asked about the story in a daily press briefing. On the blocking, he said the internet was managed “in accordance with laws”.

[…] The BBC has also been affected, with the BBC World News channel blocked when a correspondent was asked about the story during a report, and the BBC News website blocked later on Friday.

Regarding this censorship, Graham Webster explained on his Transpacifica blog “what it means when we say NYT is ‘blocked in China’“, while Max Fisher at The Washington Post discussed the risk that restricting access to such a prominent site might simply draw attention to Barboza’s report: 此地无银三百两.

Tea Leaf Nation’s Rachel Lu reported suggestions on Sina Weibo—similar to one source’s suspicion expressed in the article itself—that the Times had recently been fed its information by Wen’s enemies, and become a “puppet” in the political manoeuvring ahead of the 18th Congress in November. (Bear in mind Barboza and Sullivan’s statements that work on the article began in late 2011.)

Just three days before the article’s publications, overseas Chinese media reported that a portfolio of documents on Wen had been delivered to various foreign media outlets. As Wen presents himself as a champion of China’s liberals and reformers, many assumed that the dirt on Wen was given to foreign media by Wen’s enemies or supporters of former Chongqing Party Secretary Bo Xilai, the fallen symbol of the conservative camp who yearned for a return to Communist or Maoist orthodoxy.

“What position is the New York Times taking? Have they been bought out by the supporters of Mao?” asked one user. “All sides are making their final moves and positioning their pieces–that is what I think about the NYT’s headline today,” commented another. Some believe the newspaper is being used as a pawn in the power struggle, “This time NYT really does not understand China–too much of a puppet.”

[…] No matter what happens to Wen and the line-up at the 18th Party Congress, Wen’s political legacy and historical image are likely to be forever tainted by the revelations in the article. One social media user has no sympathy: “A giant when he talks, but a dwarf when he acts. Fare thee well.”

At Reuters’ Breaking Views, John Foley anticipated gentler repercussions for Wen, arguing that the explosive details would be dampened by the familiarity of the general theme.

Fix one problem, and along comes another. On the day China expelled disgraced politician Bo Xilai from its parliament, a New York Times investigation alleged that Premier Wen Jiabao’s family controls financial assets worth $2.7 billion. The suggestion is explosive, particularly of a leader who has spoken out about inequality. But it is also mundane, and won’t much change the calculus for investors in the People’s Republic.

With only around three weeks until Wen steps down from his party post, the risk that this becomes a social hot potato is slight. China’s censorship machine works as efficiently as ever: visits to the New York Times website were swiftly blocked. Blog users discussed the story, but only in euphemism, referring to Wen by names like “Wo Jia Baobao” – “My baby”. Though the details are juicy, the idea that China’s elite are very rich is hardly surprising.

[…] Consider this year’s civil service examinations, which are on course to attract a record number of applicants – in some cases with 9000 applications for a single post. That power breeds money is China’s worst kept secret.

Isabel Hilton elaborated at The Guardian:

In 1992 the late Deng Xiaoping, the Chinese former leader and father of “socialism with Chinese characteristics”, said: “Let a part of the population get rich first.” He did not explicitly assign that leading role to the Chinese Communist party, but the party, which continues to insist on its exclusive right to rule and its vanguard role in Chinese politics and society, took Deng’s instructions to heart.

[…] The symbiosis of politics and money extends to China’s parliament, the National People’s Congress which, as the annual Hurun report on China’s rich has shown, is now a billionaires’ club: the wealthiest 70 members enjoy a combined net worth of $85bn. By way of comparison, the estimated combined net worth of 660 top US officials, including the president, reportedly adds up to a mere $7.5bn.

The extent of the NPC members’ combined wealth was originally dug out of Hurun’s figures by Michael Forsythe at Bloomberg in February. 

This enormous accumulation of wealth threatens the view that, as The Financial Times’ Jamil Anderlini put it early this month, “while there may be corruption and wrongdoing at lower levels, the system is governed by clean and selfless elites who live only to serve the masses.” Barboza’s article does not implicate Wen himself of corruption, but any discussion of the wealth surrounding the pinnacle of Chinese power is deeply sensitive, particularly before a leadership transition already shaken by the fall of the now scapegoated Bo Xilai. From The Economist:

Mr Wen and his fellow leaders would prefer any public attention to the business dealings of the powerful to be focused on the family of Bo Xilai, the former party chief of Chongqing region in the south-west. Coincidentally, just after publication of the New York Times story, it was announced that Mr Bo had been expelled from the NPC. This was hardly a shock given that he had already been stripped of every other title, including last month his membership of the party. It prepares the way, however, for Mr Bo to be put on trial (NPC membership confers a token immunity from prosecution). This event will likely be staged some time in the next few months and will be the most sensational of its kind involving a deposed Chinese leader since the trial of the “Gang of Four” in 1980. Managing news coverage of it will be a huge challenge to the “collective leadership”. It will want to convince the public that Mr Bo and family members were engaged in egregious corruption (not least in order to block any possibility of a political comeback by the ambitious Mr Bo). But it will not want gossip to spread about the business affairs of other ruling families (squirrelling money abroad appears a national pastime, as we explain in our China section this week).

The man all but certain to succeed Mr Wen next March, his deputy, Li Keqiang, will be among those squirming. In a powerful report just published, Cheng Li of the Brookings Institution in Washington, DC, has exposed the prominent role of Li Keqiang’s younger brother, Li Keming, in the tobacco industry—even as Li Keqiang has been overseeing reform of the health sector. Airing such conflicts of interest is taboo in the Chinese press.

While the authorities scuttled to cover up the New York Times exposé, The New Yorker’s Evan Osnos diagnosed transparency:

The most substantive measure [the government] might take would be to require public officials to declare their assets, an idea that has been gaining favor among Chinese commentators in recent years. China had nearly ten million public servants, but local experiments to make them own up to what they own have failed. “No experiment that discloses the assets of junior officials but allows senior officials to continue keeping their assets secret can really expect to gain enough credibility and support to be sustainable,” Yiyi Lu, an expert on Chinese civil society, wrote recently. “If the party is genuinely prepared to embrace reform and openness, then disclosure of officials’ assets must start from those in the most senior positions.”

The Party is running out of time not because corruption is a drag on the economy—it can outrun that effect—but because the public is losing confidence. Last year, when two trains crashed on a stretch of China’s new railways, citizens were not inclined to see it as an example of the inevitable problems that accompany an ambitious new improvement to public transportation. Instead, they circulated an anonymous message that read, in part: “When a country is so corrupt that one lightning strike can cause a train crash … none of us are exempt. China today is a train rushing through a lightning storm…. We are all passengers.”

© Samuel Wade for China Digital Times (CDT), 2012. | Permalink | One comment | Add to del.icio.us
Post tags: 18th party congress, billionaires, civil service, corporate governance, corruption, Deng Xiaoping, economic reform, Evan Osnos, inequality, Internet censorship, investigative journalism, journalism, Li Keqiang, National People's Congress, new york times, official corruption, sina weibo, wealth gap, Wen Jiabao
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Well-known talk show host Mr. Cui Yongyuan recently tweeted that his 10,000 RMB monthly salary was “not enough,” despite being more than twice China’s average of 4,000 RMB per month. According to Sina, Cui wrote, “It is very difficult to find a feeling of happiness with money matters.” He said the time that he “felt most rich, most like a millionaire” was in 1986. At that time his monthly salary was 80 RMB, but he felt he could not spend it all. Since then, much has changed.

Following is a quote of Cui’s from late 2011 that has been posted far-and-wide on the Chinese blogosphere, translated by CDT. In the statement, Cui addresses some of China’s most serious social problems – access to education, economic inequality and food safety.

“I remember when I was a child, the schoolbooks said China uses 7% of the world’s arable land to feed 22% of the world’s population. But, they never told us that this 22% of the world’s population includes 60% of its public officials; that this 22% of the world’s population receives 3% of its educational funding; that this 22% of the world’s population has 97% of its wealth concentrated in 1% of its hands; that 90% of this 22% of the world’s population eats the world’s most poisonous food, pays its highest taxes and does its most squalid and exhausting work.”

A NY Times blog notes that Cui Yongyuan was one of 72 members to sign a petition against the practice of black bear bile-farming by Chinese pharmaceutical companies.

Also see a translated interview from Cui’s trip to California last year, when he was researching for a TV documentary about the history of film, via Asia Pacific Arts.

© josh rudolph for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us
Post tags: CDT translation, Cui Yongyuan, education, food safety, income gap, inequality, wealth gap
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“The nationwide survey, which will provide basic data for China’s Gini coefficient calculation, will cover about 140,000 urban and rural households, and the gathering and use of data will conform to international standards,” Xie Hongguang, deputy chief of the National Bureau of Statistics (NBS), said.

The integrated urban-rural income data is scheduled to be published in 2013 to pave the way for the publication of a national Gini coefficient that can measure income inequality, Xie said ….

Yi Xianrong, a researcher with the Institute of Finance and Banking under the Chinese Academy of Social Sciences, suggested that the government introduce regulations to ensure the transparency of income information.

“The public have a right to know the Gini coefficient,” Yi said.

Last year’s NBS figures put China’s rural Gini coefficient at 0.39, just short of the 0.4 mark widely held to show potentially destabilising inequality. But the article also cites the World Bank’s 2009 estimate of 0.47 for the country as a whole. See explanations of the Gini coefficient from the World Bank and Wikipedia, and the latter’s global comparison, from Sweden and Norway in the 0.20s to Namibia at over 0.7.

© Samuel Wade for China Digital Times (CDT), 2012. | Permalink | No comment | Add to del.icio.us
Post tags: income gap, inequality, National Bureau of Statistics, urban rural divide, wealth gap, World Bank
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