April 23, 2018

CER deep dives (9/2014 – 4/2015)

Hukou reform: Beijing abolishes “agricultural” residence class, but rural-urban split remains

New migration guidelines from the State Council and abolition of the “agricultural” residence class are less impressive in light of the policy and population shifts of recent decades, which lessened the importance of the urban-rural split on paper, but reinforced it in reality as the central government handed over hukou decision-making to cities themselves. And while many urban residents rode China’s real estate boom to riches, land policy regulating farmers’ plots remained a collectively-owned holdover from the country’s pre-Deng days. The result is an urban underclass in China’s top-tier cities, but not of them. That still seems unlikely to change.


How marketing and market forces created a China boom for formula and disposable diapers

To create demand in China for milk powder and disposable diapers where there was none, Western companies deployed tactics tried if not necessarily true, nor particularly brand-new, to convince parents here that both are sina qua non for raising a healthy child. This was accomplished in part by taking advantage of the common fear among recent generations of mothers in China that their child is at risk of falling behind immediately after it slips from the womb. Whether the China market will always be quite so kind to global purveyors of milk powder and disposable diapers is a question of politics, marketing, culture and demographics. At the nexus of all these issues sit China’s newest generation of parents.

• • 


Why do official statistics show a record drop in highway shipping?

While 2013 saw a fairly typical Spring Festival dip of 519 million tons, in 2014 highway freight appeared to have fallen a staggering 1.812 billion tons according to official statistics. It has seemingly yet to fully recover. The more likely explanation is that the government changed definition of what freight is, and with it the scope of what is being measured. No official explanation has been offered, nor have previous measurements been adjusted to take this change into account. This is all standard practice, but it leaves outside observers to puzzle out for themselves the real state of China’s highways, or something close to it.


The booming business of the Buddhist “life release” ceremony

The resurgence of Buddhism on the mainland in recent decades has prompted a widespread return of the life release ceremony, and of religious organizations dedicated to freeing creatures destined for dinner plates, throughout China. The Buddhist animal release ceremony, commonly held to originate from India and practiced in China for centuries, has become a regular business for many here looking to make a quick yuan, and Buddhist groups can individually spend over US$1 million a year buying animals for release. But the economic, ecological and epidemiological consequences of releasing wild animals from a globalized supply chain into China’s fields, forests and lakes may be far greater than one man selling turtles out of buckets suggests.

• • 


Demographics and downturn combine to spark a spike in strikes across China

Strikes have broadened geographically and across industry sectors throughout China – particularly construction, where workers face increasing arrears thanks to the country’s ongoing property-led downturn. The rise in protest frequency and broader distribution reflect major changes in Chinese labor that will reverberate throughout the global economy for years to come. The domestic labor pool continues to shrink and wages continue to rise as investment and provincial policies shift in reaction to a changing economy that needs serious readjustment. Whether China proves up to that task will depend in no small part on how mobile, networked and rights-aware its current cohort of workers is, and on how willing authorities are to allow labor to slip, even slightly, from their grip.

• 


2014: The year China’s film industry got more industrial

The growing number of theaters in smaller cities throughout the country is changing the makeup of the movie-going public, who in turn are upending the foundations of Chinese cinema itself. A film landscape dense with domestic cultural touchstones and strict government regulation remain serious obstacles to mainland films’ appeal abroad and often at home, but improvements to copyright law enforcement, the emergence of mobile online video as its own format and introduction of more dynamic sources of funding and production now promise to further industrialize and revolutionize Chinese cinema—for better and worse. 

• 


CER series: China’s carbon emissions could save the world—or doom it

While it is true Beijing has become more receptive to discussion and collaboration addressing climate change than before, it has yet to actually make any concrete, measurable promises to curb its own emissions. And though carbon-intensive coal will almost certainly continue to shrink in its overall share of China’s energy resources thanks to an impressive dedication to building up renewable energy resources like wind and solar, policy analysts and energy industry sources agree that the absolute amount burnt in the next one to two decades will continue to grow. Calculations by China Economic Review based on scientific studies show that by 2035, China could plausibly burn up 42-47% of the entire world’s remaining carbon budget for now till mid-century. Yet the price of failing to shrink humanity’s carbon footprint is too great to ignore—and China may face some of the steepest costs.

• • • • 


China’s grain self-sufficiency policy lives on after its official demise

Officials recognize that China’s grains sector is subject to policies that encourage overproduction, inefficiency, wasted stockpiles, elevated prices and, perversely, mounting imports of the same crops the country already has too much of as prices abroad fall. They also remain hamstrung by political tradition, fear of over-dependence on imports, systemic momentum and the often contradictory interests of the country’s rural and urban regions.The result is regular tides of conflicting policy overtures, muddled further by jargon and arcane categories that obscure what “self-sufficiency” actually means. Despite loud calls for modernization, government insistence on continued supply without regard for demand could prove unsustainable.



Antibiotics abuse makes China’s pork industry a hotbed for drug-resistant bugs

As Chinese agriculture scales up, key features of industrial farming – including antibiotics overuse, large-scale farms and breeding practices – could prime the pump for drug-resistant disease to take a serious toll on the country’s porcine population. Meanwhile, the size of China’s pork-hungry populace means a major loss in domestic swine stocks would have serious ramifications for the global meat market and undermine Beijing’s efforts to secure an adequate domestic supply. Also potentially troubling is the possibility of such resistance spreading in a way that could pose a direct threat to human populations. Accurately gauging the likelihood and potential severity of these outcomes would require extensive industry data that scientists and policymakers don’t yet have but urgently need.

• 


Promising protection plan comes late in the game for China’s drying, degraded waters

Recent policy announcements like the potentially landmark Water Action Plan show that China’s leaders recognize the need to rein in water consumption and pollution in the key areas of agriculture and industry. Savings in just one of these areas will not be enough, and currently despoiled water resources will need time to recover; opportunities to conserve water must also be balanced against possible resulting pollution and climate-warming CO2 releases that could exacerbate water sources’ unreliability. If coordinated conservation policies that balance food and energy security are not deployed, it will be hard to avoid further expansion of the already over-budget, much-criticized and possibly unsustainable South-North Water Diversion Project into China’s western territories.

• 


All articles by Hudson Lockett (@KangHexin)