Category Archives: Translation

Translation: Collective Actions by Chinese Migrant Workers Drive Union Reforms

09labor-inline-articleLargeBelow is my translation of a Caixin piece summarizing a report on how protests by Chinese migrant workers (sometimes involving gangs), are pushing reforms to China’s government-controlled labor unions. The original report was done by sociology researchers at Tsinghua University in partnership with the China Youth Development Foundation (中国青少年发展基金会).

The usual disclaimers apply: I’m not a professional translator and I’d love to hear suggestions for improvement. I’ve inserted the original Chinese where useful or where I’m unsure, and pasted the original text below. The original Caixin piece was by intern reporter Liu Jiaying (刘佳英);  I can’t find the original Tsinghua report online, so please let me know if you do.

Report: Collective Actions by Migrant Workers Drive Union Reforms

As industrialization and urbanization gain momentum, strikes by migrant workers continue to make the news. Recently a report by a Tsinghua University task force indicated that the new generation of migrant workers are expressing a strong desire to organize, and they’re using collective protest actions (体抗议等行为) to push forward reforms to collective bargaining and democratic elections at low-level unions. However, under the current union system, it’s very difficult for unions to represent the demands of migrant workers.

The report was jointly produced by Tsinghua University’s Department of Sociology and the China Youth Development Fund. Tsinghua sociology professor Shen Yuan (沈原) and Ph.D. Wang Jianhua (汪建华) together with other researchers used field research in the Pearl River Delta as well as large survey samples from Tsinghua University’s “New Generation Migrant Worker Research” (清华大学“新生代农民工研究”大样本抽样调查数据). Their research revealed new trends in the organization of migrant workers born after 1980, as well as the impact of these trends on reforms to unions.

The reported indicated that with employers effectively breaking up the interpersonal networks of this new generation of migrant workers, workers have been forced into a state of “atomization,” (原子化) making attempts to seek help from unions and other official organizations futile. Instead, workers rely on gangs (帮派)and other unofficial power centers in carrying out collective protest, demanding the creation of “democratic” unions capable representing the workers’ interests. Although this has driven reforms to some low-level unions, it has yet to create a stable and reliable mechanism to represent the interests of migrant workers.

Gangs enter migrant worker protests

Different from their predecessors, the new generation of migrant workers place greater emphasis on relationships among co-workers. The older generation of migrant workers primarily sought advice from relatives, kinship networks, and people from their hometown. However, when members of the new generation of migrant workers encounter problems, 40.7% will choose to first discuss the problem with friends, a 19.5% increase over the older generation. In addition, 25.1% of the new generation see their classmates and co-workers as their primary cell phone contacts, a 14.2% increase over the older generation.

These changes are connected to the educational experiences of the new generations. The report showed that 53.7% of the new generation of migrant workers received some middle or high school education. 40.2% directly entered the workforce upon graduation, with 6.6% being placed in a company by their school. Particularly for those workers who were recruited as part of “student work groups,” (学生工群体) co-worker networks are increasingly more important than traditional kinship or regional networks.

  However, the existing structures of production that migrant workers interact with (现行的“农民工生产体制”) constantly weaken co-worker networks, forcing them to seek help in gangs, “local toughs” (混混团体, really don’t know how to translate that) and other unofficial groups. The report states that the transient nature of living accommodations, the widespread use of worker placement groups, the staggering of workers’ work-rest shifts, and other structural arrangements limit socializing and group unity. This forces workers into a situation where they are “atomized” and separated, generating strong feelings of frustration.

This has only strengthened the demand of the new generation of migrant workers to organize. In addition to committing suicide by jumping off buildings and seeking vengeance outside of the workplace, workers rely on the strength of gangs in collective protest, demanding democratic union elections and collective bargaining. As an example, the report cites the 2011 riots in the Guangdong city of Zengcheng: members of Sichuan gangs (川籍帮派) were mobilized, overturning police cars and destroying stores, among other violent acts.

Limitations on reforms to low-level unions

Under pressure from the increasing number of collective protests by migrant workers, a portion of low-level unions have pushed reforms for democratic elections and collective bargaining in their area of jurisdiction. The report cites Shenzhen as an example of such reforms: in 2012 the Shenzhen Federation of Trade Unions (深圳市总工会) pushed 163 low-level unions to directly elect union chairpersons. Guangdong province and Xinzhou district in the city of Dalian also executed reforms following collective actions by migrant workers.

Despite these moves, the current system of unions has made it exceedingly difficult for reforms to move forward. The report argues that China’s company unions (企业工会) are organizations for protecting rights in name only (具有“形式化维权”的本质). The administrative structure means that low-level unions are controlled by higher-tier unions, and union representatives are frequently company managers. Because of this, reforms to low-level unions will never push beyond the limitations set by the union system and higher-tier unions. In this system, it remains difficult for low-level unions to change their fundamental function: as a “buffer” to defuse the contradictions between labor and capital (难以摆脱缓解劳资矛盾的“缓冲器”这一基本定位).

In addition, the loss of the “right to strike” limits reforms to low-level unions. The report argues that without the legal right to strike, low-level unions will never gain individual strength and or turn into leaders in collective actions by workers. Reforms advanced by the government and higher-tier unions remain essentially an attempt to dissipate collective protest by migrant workers, contributing to the goal of “social stability.”

The report states that only when the demands of the new generation of migrant workers are both recognized and respected, when channels are opened for effective protection of worker rights by unions, will the contradictions between labor and capital be eased and social stability protected. Overlooking or even suppressing the demands of migrant workers to organize will only force them to rely further on gangs and other unofficial sources of power, leading to more violent and disruptive forms of collective protest.

According to the National Bureau of Statistics’ 2013 “National Migrant Worker Monitor and Survey Report,” China already has approximately 269 million migrant workers. The new generation of migrant workers make up 46.6% of that total and primarily cluster in the eastern part of the country and in major cities.

Original Chinese:

报告称农民工集体行动推动工会改革

伴随着工业化和城市化的加速推进,农民工罢工事件屡见报端。近日,清华大学课题组的一份报告表明,新生代农民工的表现出强烈的”组织化“诉求,通过集体抗议等行为推动了地方工会的民主选举、集体协商等变革,但在现行的工会体制下,工会仍难以代表农民工诉求。

这份报告由清华大学社会学系和中国青少年发展基金会联合撰写。清华大学社会学系教授沈原、清华大学社会学系博士汪建华等研究人员,依据珠三角地区田野调查的资料及清华大学“新生代农民工研究”大样本抽样调查数据,揭示出1980及以后出生的新生代农民工组织化的趋势特点,及其对工会改革的影响。

报告指出,由于企业打散了新生代农民工的人际关系网络,他们被迫处于”原子化“的分离状态,寻求工会等正式组织帮助而不得,便依靠帮派等非正式力量进行集体抗议,要求建立能代表自身利益的“民主”工会。此举虽推动了部分基层工会的改革,但没有为农民工建立稳定且有效的利益表达机制。

帮派介入农民工抗议

与老一代农民工不同,新生代农民工对同事关系的重视程度有所增加。以往的老一代农民工更依赖家人、亲属、老乡作为最重要的意见咨询者,但新生代农民工遇到问题时,40.7%的人会首先选择与朋友讨论,比老一代高19.5个百分点,还有25.1%的新生代农民工把同学、同事视为最主要的手机联系人,比老一代高出14.2个百分点。

这些特点的形成与新生代农民工的教育经历有关。报告显示,53.7%的新生代农民工接受过中高等教育,40.2%在毕业当年直接进入企业工作,6.6%由学校组织入职。尤其对于被成批招入企业的“学生工群体”,超越传统亲缘、地缘的业缘网络日益重要。

然而,现行的“农民工生产体制”正不断地削弱新生代农民工业缘关系网络,使其不得不求助于帮派团体、“混混团体”等非正式关系网络。报告分析称,企业临时性的宿舍,大量使用劳务派遣工,相互错班的工作与休息时间等制度安排,限制了农民工的社会交往和集体团结,使他们陷入“原子化”的分离状态,产生巨大的心理挫折感。

这使得新生代农民工的“组织化”诉求更加强烈,他们除采取跳楼自杀、厂外报复等方式外,依靠帮派力量集体抗议,要求工会民主选举、集体协商。报告举例称,2011年广东增城的骚乱事件中,珠三角周边的川籍帮派即被动员起来,进行推翻警车,捣毁店铺等打砸行为。

基层工会改革受限

迫于农民工集体抗议行为的增加,部分地方工会开始在辖区内推动工会的民主选举和集体协商制度化改革。报告举例称,2012年深圳市总工会推动163家工会直接选举企业工会主席,即是改革例证。此外广东省总工会和大连市金州新区总工会也根据地方农民工集体行动的状况作出了变革。

但即便如此,囿于现行的工会体制,改革步履维艰。报告分析称,长期以来,中国的企业工会仅具有“形式化维权”的本质,在行政关系上受制于上级工会,工会代表往往居于企业的管理层,因而基层工会的改革仍旧不能僭越现有的工会制度以及总工会的底限,难以摆脱缓解劳资矛盾的“缓冲器”这一基本定位。

另外,“罢工权”的缺失也限制了基层工会的改革。报告进一步解释称,没有合法的“罢工权”,基层工会绝不会有自身的力量,也不可能成为工人集体行动的领导者。政府和上级工会推动的变革,实质上仍然是为了消解农民工的集体抗议,进而实现“维稳”目标。

报告指出,只有承认并尊重新生代农民工的诉求,尽快疏通工会等维护劳工权益的渠道,才能有效化解劳资矛盾、维护社会稳定。一昧的无视乃至压制农民工的组织化诉求,只能使其更加依赖帮派等非正式组织的力量,使集体抗议呈现出暴力和无序的倾向。

根据2013年国家统计局发布的《全国农民工监测调查报告》,中国农民工总量已达26894万人,新生代农民工占比46.6%, 且主要集中在东部地区及大中城市务工。

Translation: Li Zuojun (李佐军) interview with Sanlian Life Weekly

Below is my translation of an interview that Li Zuojun (李佐军) gave to the Sanlian Life Weekly (三联生活周刊). As far as I know, this is the first time it’s been translated into English. It’s a long and at times dense interview, but I think the ideas expressed within it could prove very important for future economic reforms. I’ll give a bit of background on Li and then a brief statement of why I think his ideas are important before the interview.

Li Zuojun is the deputy director of the Resource and Environmental Policy Research Institute at the State Council Development Research Center. He’s gotten a lot of press recently because of a 2011 prediction that during the summer of 2013 the Chinese economy would experience an economic crisis. During the June credit crunch he was hailed as having predicted it, though I think a careful reading of that earlier prediction shows he was talking about something different (though still very interesting).

Li Zuojun

In this and other recent interviews Li has articulated a new framework for analyzing the challenges to the Chinese economy. He makes a case for a number of shifts in macro-economic analysis: away from demand-focused/Keynesian analysis and toward supply/productivity-focused analysis; away from the “three-horse carriage” (三驾马车) paradigm (exports, investment and consumption), and toward a focus on the “three engines” (三大发动机) of productivity, which he defines as institutional change, structural optimization and factor upgrades (制度变革, 结构优化, 要素升级).

This framework could provide insight into how the administration will approach economic reforms. So far the Xi-Li administration stated that it will initiate economic reforms in order jump-start a new age of balanced economic growth, but that slogan has yet to be put into a well-defined framework. The paradigm advanced by Li Zuojun could very well be adopted as an intellectual backdrop for future reforms.

I want to emphasize that I’m not a professional translator, but I did put in a lot of time to come up with what I think is a faithful translation of the original. I’ve highlighted one or two places where I’m really not sure what the correct translation would be. I’d love to hear suggestions for improvement.

Original interview: http://www.lifeweek.com.cn/2013/0718/41558.shtml

My translation:

Sanlian Life Weekly (SLW): You’ve said that looking at short-term trends in the Chinese economy, 2013 will be a “first-high,then-low”trend. What do you base this judgment on?

Li Zuojun (LZJ): I think that in 2013 the economy will follow a “first-high, then-low”trend, with shocks ahead  (前高后低、震荡前行的趋势). This includes both the market’s own cyclical adjustment and the government’s own pro-active adjustment. You can’t push forward transformations in the economic development model without having that development slow down.

There are a few reasons for the “first-high”: First, there was still some impetus from the rebound at the end of 2012. Path dependency means this growth can continue for a period of time. Second, the ascension of the new leadership has given investors and consumers some new confidence. Third, the central government has said that it wants to push forward urbanization. After they emphasized this urbanization push, local governments, capital markets, real estate developers all got some encouragement, and they gave a push to growth. Fourth, the international economic situation was improving, especially the continuation of the recovery in America, the stabilization of the Euro-zone, and Japan’s short-term economic improvements. These stimulated exports and boosted economic growth.

SLW: Why will the “then-low” emerge?

LZJ: As to the reasons for the “then-low”, I think one aspect is last May’s stimulus, when China utilized some growth-stabilizing measures. This was a certain degree of economic stimulus, and the effects of this kind of stimulus usually last about one year. For example, the 4 trillion yuan stimulus of early 2009 brought about a fast rebound in the economy, and that lasted for about one year. In reality, starting from the second quarter of 2010 the Chinese economy already exhibited a downward trend. Economic growth dropped from 12.1% in the Q1 2010 all the way to 7.4% in Q3 2012. You can see that the economic stimulus only cured the symptoms in the short-term but not the fundamental problem. As soon as the stimulus wore off, the economy began a downward trend. This time the growth-stabilization measures brought about a clear rebound in Q4 2012, but in reality Q1 2013 didn’t continue that rebound, the effects didn’t last as long as last time.

Another aspect can be seen from the attitude expressed by the central government. The government’s tolerance for a GDP slow-down is strengthening, and there’s a lot of will to move forward with changes. Recently the central government has squeezed the bubble in the financial system. This will sacrifice the speed of present GDP growth, a highly necessary step to boost long term healthy growth.

SLW: You’ve mentioned that there will be changes to Chinese economic growth: 2015-2020 growth will be 6-8%, 2020-2030 growth will be 4-6%, 2030 onwards growth will be 2-4%. That says that we’re in a transitional period from high growth to medium and low growth. What do you think are some signs of the new stage the Chinese economy has entered?

LZJ: One is that the Chinese economy has just changed from a high-growth stage to a medium-growth stage. These last two years it’s been stepping down, and the 10+ percent growth rates of the past 30 years are already gone and not coming back.

Two is that China has started to enter a period of economic adjustment. It’s working through a couple years of economic structural and strategic adjustment, digesting the bubbles and contradictions that exist in the economy. This kind of adjustment needs to occur during a period of reasonable growth rates.

Third, China has entered a delicate period in terms of the “middle-income trap”. According to international experience, you enter this period when average incomes exceed $4,000. Up until now China has just stepped into this delicate period. In reality, China has already seen the appearance of problems that occurred in other countries caught in the middle-income trap, for example increases in the income gap, the intensification of social conflicts, difficulties in transforming and upgrading production processes.

Fourth, China has just entered a period of high costs. The cost of land, raw materials, energy resources, labor, capital, and intellectual property are all going up. It means China’s competitive advantage from low costs isn’t that obvious anymore.

Fifth, China’s industrialization has entered the middle and late stages, and “the second half stages of heavy industrialization.” The characteristic of this stage is that you need the blending of development in heavy industry and productive service industries. The first half of heavy industry’s development was a period of expanding capacity, the second half is about elevating quality, and economic growth will accordingly decrease. After these phases end, you enter a “post-industrial society”, and this is the reason that after 2020 we’ll see economic growth rates continue to decline.

Sixth, China’s urbanization has entered the second phase of its acceleration. According to international experience, urbanization is in its accelerating phase when urbanization rates are between 30 and 70%. In 2012 China’s urbanization rate was 52.6%, meaning it’s just transition from the first half to the second half of this acceleration. It’s the same as industrialization: the first half of this phase is about expanding quantity, but when you enter the second half, even though speeds are pretty fast, you’re already transitioning to the phase of elevating quality. When you enter this phase, the scope of basic infrastructure and real estate development will correspondingly shrink, causing economic growth to slow down.

SLW: Other than reasons originating in the Chinese economy, are there external factors influencing this?

LZJ: External factors are playing a role, for example, the decline in demand from abroad. After the international economic crisis passed a portion of external demand returned to China, but there’s also a portion that’s been lost forever. As America and other countries are reflecting on the international financial crisis, they’re reflecting on the past economic development model of “high consumption, advance consumption, debt-driven consumption”. The result is that they won’t again have such high consumption, advance consumption and debt-driven consumption. This means that even though the international financial crisis is over, there’s a portion of demand for Chinese exports that’s gone forever.

This means that the potential growth rates for China have declined. This is the best growth rate that various environmental resources and factors of production can support. In the past the constraints from the resource environment weren’t that great, and you added on the large dividend from institutional changes that released productive capacity, so one could maintain high growth rates for such a long period of time. But now resource constraints are constantly growing, and the space for boosts from transformations that release productive capacity is also relatively shrinking. Because of this China’s potential growth rates have dropped.

“Squeezing the bubble” and “soft landings”

SLW:  In the last few years as academics started to call out that China’s competitive advantage in the world would decline steeply, they referred to a decrease in the “demographic dividend.” Are changes in the demographic dividend, an important factor causing China’s growth rates to decline?

LZJ: Demographic dividends are just one factor influencing China’s growth rates. The objective forces behind Chinese growth rates involve a wide range of things. They include the drivers of demand, what people often call the “three-horse carriage” [investment, consumption, exports]. Second you have the drive from structural optimization, including industrialization, urbanization, regional economic integration, industrial upgrading, etc. Third, the increase in factor inputs. Fourth, the upgrade in factor inputs, such as technological progress, growth in human capital, information technology, etc. Fifth, is institutional change. Institutional changes can  mobilize each person’s pro-activeness and creativity, and these can boost economic growth. Sixth, distortions, especially those that suppress prices for the factors of production. Seventh, suppressing expenditures on welfare can increase expenditures on economic development. Eighth, the use of economic stimulus. Ninth, the corporatization of government and the pursuit of excessive growth rates.

Looking at it today, six of these have already experienced problems on some level. All you have left is institutional change, structural optimization and factor upgrades. In the future these three forces will be the main drivers, and the most important will be institutional change, because structural optimization and factor upgrades both rely on institutional change.

SLW: So that’s to say the economic stimulus methods we used in the past, the things that kept our low-price competitive advantage are disappearing, and the expenditures on welfare that have been squeezed out in the future need to be made up. Left over we just have institutional change, structural optimization and factor upgrades, these three aspects can push forward economic growth. So in the future when we do macro-economic analysis, should we be paying more attention to changes in these three factors?

LZJ: I think our angle for doing macro-economic analysis should be more diverse. In the past we relied too much on Keynes’ macro-economic framework. In reality, there is exist some major defects in it. Keynes’ macro-economic analytical framework over-emphasized exports, investment and consumptions, these three forces acting on demand. In contrast, it overlooked the role of supply, and in reality economic development is the result of the overlap between supply and demand. The elements of supply include technological development, increases in human capital, structural upgrades and institutional innovation, etc etc.

In the past we over-emphasized short-term analysis and overlooked medium and long-term analysis. We overemphasized economic factor analysis and overlooked non-economic factor analysis. In the past we overemphasized the government’s role and overlooked the market’s role. As we combated the crisis for the past few years, the government clearly applied Keynesian theory: the crisis began, economic growth slipped, unemployment rose, and we just started emphasizing the role of government. The government initiated large-scale investment, construction and money printing. This brought about two results: On the one hand, the economy had a quick rebound and recovery, the results were almost immediate. On the other hand, the economy began to display or prepared to display large-scale asset price bubbles, inflation, non-performing loans, debt, over-capacity, and a retreat of marketization.

Also, in the past we over-emphasized total macro-economic analysis, and overlooked the micro-analysis of individual behavior. In reality economic development is always about the integration of macro and micro, the macro results are built on a foundation made of micro behaviors.

SLW: During the era of high economic growth, we were always scared by the thought of an economic downturn. In reality what kind of challenges will an economic downturn bring about? Are we going to be able to deal with it calmly?

LZJ: The challenges faced during an economic downturn are all encompassing. They include long-term inflation, accumulated economic bubbles, increasing resource and environmental constraints, an increase in the social expenditures of economic development, and the deterioration of the international environment, to name a few. The problems and the challenges aren’t frightening, but what’s frightening is that we don’t know where they are. Once we see clearly what the problems and challenges are, we can absolutely handle these challenges.

SLW: These days a lot of people are wondering, will the bubbles accumulated in the economy pop?

LZJ: If the government applies macro-controls in an extremely skillful way, slowly squeezing the bubble, while also not letting them cause an economic crisis or social unrest, while also cultivating in a timely way new sources of economic growth and competitive advantage, pushing forward industry structural changes and upgrades, then this is what you’d call a “soft landing,” the bubbles won’t pop. During the so called “money panic” of late June, in the process of resolving it the central government expressed the determination to squeeze the bubble. The central government hopes to use reforms to make the real estate market turn into a regular industry, and also give a fairer competitive environment in the real economy. This affects reforms to monopoly privileges for example, and a whole set of questions about institutional reform.

SLW: Some people see the decrease in economic growth and inflation, and they think this is a necessary expression of a “soft landing”.

LZJ: The problem might not be that simple, a drop in growth rates and inflation doesn’t necessarily mean a complete soft landing. A soft landing has to be a safe landing, and a safe landing means that as growth rates slide, economic structures are smoothly adjusted, new sources of growth slowly appear. If it doesn’t happen like this, it will cause business losses and bankruptcies to increase, debt burdens to grow, financial dangers to grow. This is what they call a “hard landing.” In addition, as the new sources of growth appear, they have to rely on institutional change, factor upgrades and structural optimization, the “three big motors” (not the “three horse-carriage of short-term exports, investment and consumption). This requires a process.

SLW: In the past the government said that in maintaining economic growth, a very important indicator was that GDP growth had to stay above 8%. Only then could China resolve employment issues. Right now economic growth has already slipped, have the challenges in terms of employment grown bigger?

LZJ: The slide in growth rates means that demand will shrink, orders will shrink, and markets will contract. Lots of businesses might end up taking losses and going bankrupt. Employment opportunities will shrink, work will be hard to find. Right now our economy will have a hard time pursuing high-speed growth. From here on out the difficulties in employment will grow. Western countries are already so developed, and there it’s still hard to resolve employment problems, the unemployment rates are still high. So from now on as China’s economy slows down, employment pressures will in fact grow.

SLW: But now these kinds of pressures will need to rely on the market to make adjustments. It’s not that the government can simply apply controls and resolve things.

LZJ: After changing the mode of economic development, from now on we’ll have to rely on social investment to drive economic growth, not like in the past when we relied on government investment. Bu social investment means using one’s own money, so investors will be very cautious, they’ll want to evaluate whether the returns will be great, whether the risk is high. If investors feel that the risk is too high, that the returns aren’t great enough, they just won’t invest, they’d rather choose to wait and see or to engage in speculation.

We originally relied on normal factors (like resources, labor, etc.), but from now on we’ll have to rely on high-level factors (like technology, human capital, etc.), in order to drive the economy. With normal factors China has a few advantages, but we have a scarcity of high-level factors. If we want to make the change to relying on high-level factors for economic development, the first question we have to deal with is how to engage in positive competition with developed countries. If China wants to make use of high-level factors, it has to resolve problems related to incentive mechanisms, especially intellectual property, but also many more.

The challenges for local government reform

SLW: We’ve been talking about reform for so many years, the main question for each phase of reform is different. Now growth rates are going down, it’s said that reform has entered the deep water phase, what changes have there been to the target of reform?

LZJ: The target of the new phase of reforms isn’t the planned economic system, instead it’s the transitional distorted system. It’s shown certain characteristics, for example: “privileged and elite market economy systems” (power mixed in with buying and selling), “monopoly market economy systems” (powerful monopolized industries), “preferential market economic systems” (preferential policies have a far-reaching impact on fairness in markets), “urban-rural split market economic systems” (urban-rural residence permits, land, welfare systems aren’t united), “spreading market economy systems” (education, healthcare, religion, and other public goods are overly marketized), “pricing benefits in market economic systems” (electricity, water, oil, natural gas, and other important energy sources have had prices suppressed, they’ve become a form of disguised welfare).

SLW: With so many problems requiring reform, what area should be the starting point for reforms?

LZJ: In terms of finance, we need to reduce non-performing assets, deleverage, and find new areas for investment. In terms of local governments, efforts need to be focused on reducing the debt burden, get rid of the reliance of land-fueled finances, and find new sources of growth. In terms of businesses, we need to reduce the burden, reduce overcapacity, and find new sources of profit.

SLW: Talking about local governments, everyone has been criticizing “land-fueled finances” for quite a few years, but it’s always proved hard to change. In the end, is it because we can’t resolve the problem of mismatch between responsibilities and finances?

Local governments do in fact face a lot of problems. There debt burden is heavy, and the revenue-expenditures gap brings a lot of pressure. From last year’s Two-Meetings up through the central government work conference, Politburo meetings have all emphasized the dangers of local government debt. This means the central government is putting a lot of focus on this problem. International organizations have also reduced China’s ratings because of the dangers of local government debt. If the dangers from local debt keep growing, the next step is the chance of danger to the whole government finance system or to localities.

“Land-fueled finances” is an old problem. With such little money, local governments can’t do all the much. When GDP is the main assessment metric, selling land is the most realistic method. But our land system is far from perfect, rural land isn’t really completely collective. A lot of legal loopholes exist, and governments can set high prices when reselling land.

SLW: Nowadays land-sale polices have become difficult to sustain.

LZJ: It is difficult to sustain. High housing prices have caused a lot of problems in today’s society. On the one hand there’s a great danger in terms of local government debt. Wealth has become overly-concentrated in government, and that’s created problems of unsound distribution. If you want to resolve the problem at a deeper level, you’ve first got to have reforms to the land system itself, let rural collectives truly own the land, make it the same as the system in the cities with identical rights, local governments can’t use land to generate wealth. Also, the finance and tax system needs reform. Make central vs. local government financial powers match their responsibilities. Right now there’s low-efficiency in some financial transfers and that creates waste. Furthermore, the central government’s system for assessments needs to be changed. Lots of governments have become corporatized. Governments should primarily rely on taxes from businesses and the people for their sources of income, it shouldn’t be that governments go out and directly earn money. If from now on our assessment system can become a 360-degree assessment, lower-tier governments assessing upper-tiers, the people assessing the government, this kind of government would set goals and work hard on improving employment and people’s livelihood.

SLW: The central and local governments are in the midst of this transition, it’s a bit like a game of chess.

LZJ: Right now lots of local governments see pressures on expenditures continually growing, administrative expenditures, infrastructure expenditures, affordable housing construction expenditures, social welfare expenditures, stability maintenance expenditures and others are all growing. But government revenues are actually shrinking. Because small and medium enterprises aren’t doing well industrial and commercial taxes have gone down, and because housing prices went down they brought down revenue from land sales. The “medium-growth phase” has arrived and relieved local governments of a portion of the pressure from the great GDP-growth competition. It’s made the more engaged in social management, and this will also create a good environment for transforming the economic development model.

The national government has the nation to consider, local governments have local concerns.  Some places originally were major coal or steel provinces. If you want to adjust the structures, the bulk of economic growth is gone. So local governments start from their own GDP, government revenue and social stability maintenance, meaning the push-back against structural adjustment will be great. Whether or not you’re the central or local government, you want to set out considering the big picture, the long-term.

SLW: Right now we’re about to commence large-scale urbanization, will this be a new opportunity for local governments? Will they use this to slowly shed the dangers of their debts, look for new sources of growth?

LZJ: Recent urbanization has been given a new historical mission: expand domestic demand and cultivate new sources of growth. All over you have property developers and capital market investors moving at the first whiff, all clamoring to raise the banner of urbanization. This has got to arouse our vigilance. New urbanization at root is a good thing, but if we don’t pay attention to guidance, under the force of big investment, big demolition, big construction, and “build the city campaigns”, the development of housing and property might go astray and bring with it hard to predict consequences.

Our earlier urbanization showed some problems, for example urbanization of land replaced urbanization of people, stratification in cities replaced fairness in cities. In lots of countries cities aren’t given an administrative rank, they compete fairly. The difference is that China’s urban centers are separated by rank; there are directly-administered cities, sub-municipal cities, prefectural-level cities, sub-prefectural level cities, county-level cities, towns, villages, lots of different administrative ranks. High-ranking cities can use non-market trading methods to extract funds, resources and talent from low-ranking municipalities. This has meant that in the majority of Chinese cities their scale is proportional to their administrative rank, not their actual competitiveness. The factors of production aren’t distributed according to economic zones, but according to administrative zones or the certain configurations of power. This distorts the deployment of resources and reduces national and regional overall competitiveness. If you don’t destroy the urban administrative ranking system and let small municipalities become cities, it might become just another method for creating government posts.

SLW: So that’s to say that the new urbanization will require a portion of subsidies from local governments?

LZJ: The new urbanization is people-centered urbanization, and it will actually bring a lot of challenges to local governments. New urbanization is a natural historical process; you can’t independently move ahead, and you need to deal with the connection between marketization, industrialization and agricultural modernization.

Because the government has to figure out how to turn rural residents into city residents, the current cake enjoyed by urban residents has to also be distributed to peasants, housing prices also can’t be so high. The core of local governments is developing competitive industries. Urbanization should be a natural result of industrialization. If there aren’t industries, how are you going to have jobs for people entering the cities? Right now the hukou system has become the tiger standing between rural residents and welfare benefits, so we fundamentally want to slowly unify the urban and rural social welfare system.
SLW: You mention that the core of urbanization is developing competitive industries, but nowadays industry development has run into ever-increasing environmental protection demands. Will this add to the difficulties of developing these industries?

LZJ: Low-carbon development is a trend in today’s world, and in regards to this you don’t want to believe all the clamor of the conspiracy theorists. If we cling to what the conspiracy theorists say, when most of the countries in the world have already entered or applied new low-carbon rules and procedures, in the end we’ll be the ones to lose out. The essence of low-carbon development is to solve the problem of sustainability on Earth. This is a universal value, but in advancing low-carbon development China will face some unique challenges.

In developed countries, industrialization and urbanization are basically complete, they’ve already entered a low-carbon phase. At this point emphasizing CO2 emissions is like taking a knife to the throat, while to developed countries it’s just taking a knife to the tail. Also, China’s resource endowment creates a high-carbon structure. China has plenty of coal but little oil and gas, and the proportion of new energy sources is also low, right now just around 9.8%. Coal mining and consumption is a major source of carbon emissions, and China’s coal-abundant structure doesn’t help advance low-carbon development.

In addition, in the international distribution of labor, China is a part of the low-end manufacturing segment, that doesn’t help low-carbon development. In the international division of labor, manufacturing and assembly create the most emissions. In reality this means that developed countries have moved a lot of the carbon emitting phases to China, creating the problem of international transfers of carbon emissions.

SLW: But overall you’ve expressed optimism about the Chinese economy, you think that over the next 20 years China can maintain around 4-8% growth rates. Is that to say that China won’t fall into the middle-income trap?

LZJ: In industrial development phase, we’re still in our robust youth. We’re still going to see a major liberation of China’s productive forces. What we call productive forces is the capacity that industrialization, urbanization, and regional economic integration will unleash. China’s industrialization, urbanization, regional economic integration is still in a middle-phase, and western countries have already basically finished this. This is our country’s advantage.

The productive forces of institutional change will also be liberated. In the past our focal point was pushing forward reforms of the economic system. In the future we also want to push forward political, cultural, economic, social, environmental/resource, these five-in-one reforms. In addition, the productive forces of factor upgrades will also see a big liberation. Technological progress, human capital, and information networks all have lots of space for development.

 

Translation: 孙燕姿 “未完成” (Stefanie Sun, “To be continued”)

孙燕姿 album cover

This will be my first shot at translating lyrics by my favorite Chinese-language singer: 孙燕姿, Sunyanzi (tones: 1, 4, 1). She’s a Singaporean “mando-pop” singer, and earlier this year I just went head over heels for her [music]. Below is a link to my favorite one: 未完成, “To Be Continued.” This has been my pick-me-up-and-throw-me-out-into-the-world song all spring, really injects a healthy dose of joy into my day.

Here’s a Youku link to the music video (but with low quality sound).

Here’s a Youtube link for sound quality.

And a link for listening to/downloading the mp3 未完成 To Be Continued

I’ve never translated poetry of any kind before, and with this I’ve gone with a mix of direct translation and plenty of “poetic” license. Remember that poetry always sounds strange in translation, song lyrics look dead when written down and, most importantly, I’m a noob at this. Here goes…

Take the long way home, mixing things up a bit,                      绕个路回家 有些事开始复杂

It’s a turn of phrase, one that I’m growing into                          拐个弯说话 代表必须长大啦

Gotta make sure, you’ll never quite make it on time,               要确定自己 总好象是来不及

With that shifting mood, can I get an answer from someone?心情在变化 能否找个人要答案 快回答

When you’re your boss, can’t be taking any days off,             开始负责任 都不能有点懒散

But left alone you’ll give the brain a break, what to do?          虽然私底下 常常让脑袋在放假 该不该

 

Put it this way: I can’t wait for the changes I can’t see,            这么说来 对我有期待 不知不觉是改变

I’m to be continued, and what comes up comes out,               未完成的我 一出现就要有表现

Feels pretty good,                                                                   感觉不错

To live is to change, and to never finish up.                            生活在世界未完成是个期待 永远做不完

[absurdly cute laugh, followed by repeat of earlier verses]

Think, think normal, think special, think freedom,                   想 想平凡 想特别 想自由

It all like that long way home, the extra turn,                           我想一切就像 绕个路 拐个弯

The extra load, pick it up, forced to become who I am.           要负责任 别偷懒 在逼着我成长

 

Put it this way: a heart full of unspeakable wishes,                 这么说来 自己的期待 有时说不出来

Choices made of intuitions,                                                     未完成什么 我会考虑我的直觉

Feels pretty good,                                                                   感觉不错

To live is to change, and to never finish up.                             生活在世界未完成是个期待 永远做完

 

Lots of non-poetic clunkiness in translation (and trouble in my formatting) but you get the idea. Sunyanzi was most popular about ten years ago, meaning that most college-age women in China love her. You can say what you want about Chinese music, but I’m just glad that this generation grew up with the above lyrics as opposed to this.