Rich China, Poor China

http://www.pekingduck.org/2010/08/rich-china-poor-china/

he day we all knew would arrive is here, and according to Evan Osnos of the New Yorker, Chinadoesn’t know quite how to respond.

How did China respond to the exhilarating news that it has sprinted past Japan to become the world’s second largest economy? Here’s what the Global Times newspaper says today, “The world ranking has brought China jealousy and vigilance…. Despite growth in G.D.P, which is only a number, natural disasters will continue to hit China, and American warships and Congress will continue to be aggressive towards China.”

Um—so you’re saying there won’t be cake? While the story has rated front-page treatment in the U.S., it has sent China into a frenzy of self-flagellation, in the hope of reminding people that it is still home to a lot of very poor people.

Obviously China’s new No. 2 status puts the country in a bind and reinforces the conundrum that China is an unbelievably rich and a desperately poor country. It’s awkward for the propagandists who on the one hand want to gloat about China’s ascending status, but who must also make sure the people understand that China doesn’t have the resources to end poverty.

Of course, real poverty (the kind that leaves people morbidly malnourished or even starving) has been all but eradicated in China, but, to put it in the words of a former Washington Post bureau chief, much of China remains “a third-, fourth- and fifth-world country” with a majority of its population living below the poverty line. On the other side of the spectrum we have examples everywhere of those with money to burn. China is so rich, and so poor.

Of course, this is in some ways the oldest story on earth, and we have an increasing and inexcusable divide between the haves and the have-nots here in America, an open wound that’s only going to deepen and fester as unemployment continues to rise in what seems to be direct correlation with the salaries and bonuses dished out on Wall Street. The contrast in China, however, is a bit more dramatic, and the middle class a far smaller segment of China’s demographic. Osnos illustrates this point:

[E]very full-time China observer has had the experience of greeting a giddy visitor for dinner, after he or she has done the Shanghai-Beijing loop or visited a top university. You inevitably end up playing the role of the local grump, trying to talk your glassy-eyed guest down from the chandelier. Standing outside the bus station in Xining earlier this month, watching the migrants stream in and out, I made a note to bring guests who want a fuller picture of China. It’s only a couple of hours by plane from Beijing, and it’s not a red herring. To reverse the roles for a moment, a visit to the Port Authority bus terminal might not showcase America’s best angle, but if I were a Chinese investor trying to understand how America lives beneath the top-line measures of its strength, I would probably want to make the visit.

China’s spin doctors are going to face an even tougher balancing act now as they send out the message that the country has reached a new economic milestone, yet remains in many ways poor and helpless. I like the way James Kynge expressed this contradiction in China Shakes the World back in 2006,

Although China is poised to overtake the UK to become the world’s fourth largest economy, on a per capita basis it ranks just above the world’s poorest nations, with an average income of just over $1,000 a year. Even if the country’s gross domestic product one day becomes as large as that of the US, simple mathematics ordains that its people at that time will on average be only one-sixth as wealthy as Americans.

Look at how far China has come even since then. And none of this is to take away from China’s huge successes and unparalleled growth trajectory. It’s just an important reminder that there’s more than one China, and that as China’s GDP grows, the higher the tightrope will be strung for China’s propagandists who need to convey two distinctly discordant messages. I don’t envy them their jobs.