Date: Tue, 15 Oct 1996 23:25:25 -0400 (EDT)
From: louisgodena-AT-ids.net (Louis R Godena)
Subject: China details



Professor Rosser,  apparently,  is quite taken with Vaclav Smil's *China's
Environmental Crisis: an inquiry into the limits of national development*
(Armonk, NY: M.E. Sharpe,  1993),  a book he is wont to list on virtually
every post to this list.

Now,  if we can only get him to read the damn thing.

On second thought,   maybe he had just better forget it.    Some of that
volume's more loopy postulates--"in 1992,  less than 35 per cent of the
[Chinese] population had ready [sic] access to unpolluted water....there is
ten to twenty times as much particulate and sulpher dioxide in the air of
Chinese cities as there are in the air of US cities"--have already been
dealt with (and demolished) in *The South China Morning Post*,  *Bulletin of
East Asian Scholars*,  *Asian Demography*,  and elsewhere.    I won't rehash
them here,  though one in particular (Smil's claim that Beijing's water
table is 134 feet lower than it was before 1949) smacks so much of western
disinformation (the CIA's own estimate that the capital would have to be
moved by 2025 was based on a reduced water table of only 75 feet),  that the
very credibility of the book itself is thrown into doubt.

So much for Professor Rosser's "valuable reference matter" canard.    So now
he's left with the 1996 World Bank Report.

Professor Rosser makes much of the fact that SOEs share of industrial output
fell to 34% (from just over 43% in 1993).   I had already stated as much in
my earlier posts,  when I pointed out that the increase in the real output
of SOEs was only a fifth of the total industrial expansion between 1989 and
1993 when the compound annual growth in SOE output was 7.4 per cent,
against 31 per cent in non-SOEs.    But does this tell the whole story,
especially in light of the size (normally hundreds of times the size of
non-SOEs,  particularly those in heavy industry) and  capital intensity of
the SOEs?    The good Professor,  it should be pointed out,  is not speaking
of the difference between socialism and capitalism,  merely about the
difference between central control of a "planned commodity market"--as
China's officially is--and the devolution of that control to regional and
local agencies.    Professor Rosser,  particularly given the spectacular
results that the TVEs and collectives have produced,   has remarkably little
to crow about.    Nor is his obsessive analogy to NEP pertinent;  to loosen
the political reins to the extent that Lenin contemplated in 1921 would be
unthinkable to the current crop of Chinese leaders.

But what of the darker side of the TVEs?   They represent,  first of all,
perhaps an insoluble contradiction between regulatory and entrepreneurial
functions of government.    On the one hand,  they are freer to experiment;
on the other,  they are subject to strict fiscal discipline.   Another
drawback is the limitations imposed on the transfer of capital and
entrepreneurship across jurisdictions.    Rich communities surge ahead.
Backward ones fall ever further behind,  a process made worse by the
temptation of poorer communities toward fiscal predation upon their already
sickly TVEs.    And,  the disproportionate amount of pollution that can be
laid at the door of most TVEs is particularly worrying in light of the fact
that at least 15 per cent of China's national product is already being lost
due to environmental damage.    

Professer Rosser may want to have it both ways.    

Alas,  he cannot

Nor is his obsessive analogy to NEP completely pertinent; true,  in both
instances reform powered steep rises in agricultural production and its
concomitant in rural and artisan industry,  while the rise was less
pronounced in factory industries producing consumer goods and practically
non-existent in heavy industry producing capital goods.    But, while the
peasant was the principal beneficiary of NEP,  the industrial worker had
been freed from labor conscription,  the reverse has been true in modern
China.   And of course the corresponding loosening of political controls
envisaged by Lenin has proven wholly unacceptable to the current crop of
Chinese leaders.

But what of Professor Rosser's other points,  those of rising unemployment
and growing social inequality?    Here of course he is on firmer ground.
Everyone,  I imagine,  has by now heard about or seen the revised World Bank
Report,  "Poverty in China;  what do the numbers say."    Under the revised
report,  the WB now estimates that nearly third of China's citizens live in
poverty.    Even allowing for the political motives behind the WB's
phenagling of the purchasing-power-parity (ppp) in regards to the world's
fastest growing economy,  the growing inequality between city and country
must be worrying in the extreme.

More tomorrow.


Louis Godena