Reports of "China fever" among Taiwanese businessmen and the abundant negative results thereof for Taiwan's economy need no introduction. It is abundantly clear that cheap labor, the availability of relatively inexpensive land, a common language and the prospect of profiting from 1.3 billion Chinese consumers have enticed Taiwanese manufacturers to pour more than US$70 billion into China in recent years. More Taiwanese manufacturers are in the process of making the move.
And, why not? Taiwan, as well as South Korea and Singapore, has been adversely affected by the US economic slow-down, particularly its tech sector companies. Further China is the only Asian economy to emerge relatively unscathed from both the recent downturn and the financial crisis three years ago.
However, in contrast to the boundless optimism of Asian businessmen rushing to set up in China, there have been numerous Western reports about increasing signs of unrest in China.
A 308-page book entitled China Investigation Report 2000-2001: Studies of Contraditions Among the People Under New Conditions has more than confirmed the objectiveness and accuracy of the Western reports. The book is produced by a top Chinese Communist Party research group and was published by an officially sanctioned Communist Party publishing company. According to a June 3 New York Times article entitled China's Inner Circle Reveals Big Unrest: "The unusual report...describes mounting public anger over inequality, corruption and official aloofness, and it paints a picture of seething unrest almost as bleak as any drawn by dissidents abroad. It describes a growing pattern of large protests, sometimes involving tens of thousands of people." The article goes on to say that the people participating in protests "are expanding from farmers and retired workers to include workers still on the job, individual business owners, decommissioned soldiers, and even officials, teachers and students." It hasbeen predicted that when China enters the WTO, these conflicts will only increase.
Why didn't investers taken social stability into consideration before moving their capital and technology into China? Should they not re-evaluate the changing situation, particularly now that an official government report has alerted them of the danger?
Let's focus on what is arguably the most serious problem that is facing Jiang Zemin (
During Mao's rule (1949 to 1976), the people were indoctrinated to embrace egalitarianism. Peasants in particular worshipped Mao as if he were god. Peasants were and, to a large extent, still are Maoists. They endured poverty when all Chinese endured it. Now, however, with crime on the rise and corruption widespread among officials, one cannot blame China's impoverished peasants for building resentment towards their government They are nostalgic for the Mao years of spartan yet egalitarian life.
Increasing numbers of peasants have protested the rising tax burden imposed on them. Those who do not protest migrate to the cities on the coast to look for jobs. Unfortunately, not many of these frequently transient people find work. Reportedly, 100 million of such people have joind the so-called mangliu (blind flow) moving hopelessly from city to city.
In the cities away from the coast, workers have been let go because the state enterprises which employed them are being forced to close because of inefficiency, bad debts and the simple fact that markets do not exist for their products. Keep in mind these urban residents used to enjoy free housing, education and health care. There was virtually no unemployment during the Mao years. Now there is much unemployment and it is on the rise.
There is an excellent report entitled "To each according to his ability," in the June 2-8 issue of The Economist. This report cites an article in the official Renmin Ribao (People's Daily) in which Premier Zhu Rongji (
In short, Beijing is threatened by the prospect of a vast number of frustrated and alienated Chinese who have been promised that they too will become richer, though when that will happen the government isn't inclined to say.
It has been two decades since economic reform began and income inequality is increasingly a source of social instability. China's government is well aware of this problem, yet unable to do anything beyond inviting foreign investors to pour their money into the country's volatile and corrupt interior provinces.
As the US market becomes less able to absorb imported goods from Asia due to a continuing economic slow down, the prospect of reaching 1.3 billion Chinese consumers becomes all the more attractive. The sheer size of China's population is, however, a lot more beautiful as a statistic than as a seething, shifting reality.
The bulk of China's people are still deeply and hopelessly impoverished. It is highly unlikely that China's people, however statistically beautiful in terms of sheer numbers, will be profiting anyone's bottom line any time soon. It is, however, likely that China's social unrest will only continue grow.
It would be wise for Taiwanese companies to seriously consider China's increasing social instability before moving their operations to China. They could end up losing more than just their shirts in a great Chinese upheaval.
Ching-chih Chen is a professor of history at Southern Illinois University
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