Pre-Trip Information

 

China is the largest country in Asia and has the largest population -- 1.3 billion -- in the world. China is also a multinational country, with the Han Chinese as the largest ethnic group which constitutes about 92 percent of the total population. The Zhuang are the largest minority group in China with a population of about 16 million, and most of them live in the Zhuang autonomous region of Guangxi. There are about 50 other minority groups spread across the country, and most of these groups are found in south and southwestern provinces of China.


Language

 

With the Han Chinese far outnumbering the minority groups, the population of China is formed with a homogeneous mass of people sharing the same culture, the same traditions and the same written language. There are seven major Chinese dialects and many sub-dialects. The predominant dialect is Mandarin Chinese spoken by over 70 percent of the population and it is the medium of government. About two-thirds of the Han Chinese are native speakers of Mandarin, and the rest who live in southwest and southeast China speak one of the six other major Chinese dialects. Non-Chinese languages spoken widely by ethnic minorities include Mongolian, Tibetan, Uygur and other Turkic languages (in Xinjiang), and Korean (in the Northeast). China adopts the pinyin system using Roman letters for spelling Chinese names and places as well as a pronunciation tool for learning the Chinese characters.

 

China is officially an aetheist country.  Religious practice in China, however, is a more complicated consideration.  For example, while the Chinese Constitution affirms religious tolerance, the government simultaneously places restrictions on certain types of  religious practice.  In everyday life in China, Buddhism is regarded as the most widely practiced religion in China with an estimated 100 million adherents.  Other religions in China include Islam and Christianity.  As well,  Daoism (Taoism) --  a traditional religion and an ideological belief system -- has been practiced historically and endures  today.

 

The country's population growth control has been a major task for the Chinese government for several decades. In 1970 China initiated a strict birth control program aimed at late marriage and family limitation, and it culminated in 1979 with implementing a policy of one child per family. The government's efforts in birth control seem rather effective since the initiation of the program. China's population growth rate now is 0.6 percent, which is unusually low for a developing country. Nevertheless, its huge size of the population still results in a large annual net population growth.  The country's overall birth rate is 13.14 births per 1,000,  according to most recent estimates, while the death rate is 6.94 deaths per 1,000.  Recent statistics state that the fertility rate is 1.72 children born per woman.


Human Development

The population of China has a healthy life expectancy of 72.27 years, with some differences attributed to gender.  Among men, life expectancy is 70.65 years and among women, life expectancy is 74.09 years,  as noted by  recent estimates.  Meanwhile, the infant mortality rate in China is 24.18 deaths per 1,000 live births.  In terms of literacy,  92 percent of the overall population, age 15 and over, can read and write, with some differences attributed to gender.  Among men, the literacy rate is 95.1 percent; among women, it is 86.5 percent.  About 4.6 percent of GDP is spent on health expenditures.  Access to water is very good; however, sanitation can be a problem in select areas of the country. 

One notable indicator used to measure a country's quality of life is the Human Development Index (HDI), which has been compiled annually since 1990 by the United Nations Development Programme (UNDP). The HDI is a composite of several indicators, which measure a country's achievements in three main arenas of human development: longevity, knowledge and education, as well as economic standard of living. In a recent ranking of 169 countries and territories, the HDI placed China in the medium human development category, at 89th place.

Note: Although the concept of human development is complicated and cannot be properly captured by values and indices, the HDI, which is calculated and updated annually, offers a wide-ranging assessment of human development in certain countries, not based solely upon traditional economic and financial indicators.

 

Special Entry:

Chinain Transition: Poverty, Development and Economic Reform

Since the late 1970s, Chinahas been undergoing a process of economic transformation as the country moves from a command economy to one that is market-oriented, and from an agriculturally-based society toward one that is increasingly urbanized and industrialized. As Chinahas traversed this path, it has also implemented economic reforms and more market-friendly policies. These reforms and policies had a positive effect on the economies in both urban and rural China, with the country boasting of significant economic achievements.  At the same time, there have been societal and economic challenges which have presented themselves as a consequence of this process of transformation.

Since the late 1970s Chinahas enjoyed real GDP growth of approximately 9 percent annually as well as the quadrupling of per capita income.  This record of growth has had the effect of moving many millions of people out of poverty.  Indeed, over a 20-year horizon, Chinaaccounted for a full 75 percent of poverty reduction across the world.  The number of people living under the poverty line was significantly reduced from 200 million in the early 1980s to less than half that number by the mid-1990s. Meanwhile, over a 10-year span from 1990 to 2000, although the total population in China rose by more than 125 million, the number of people living on only a dollar per day dropped by 170 million.   

Across China, there has also been a measurable improvement of human development indicators. As noted above, the population of Chinahas a healthy life expectancy of 72.27 years, according to recent estimates. As of 2005, the infant mortality rate in Chinawas 24.18 deaths per 1,000 live births – a steadily improved rate when compared with the rate of 30 deaths per 1,000 live births in 2002 and 41 deaths per 1,000 live births in the late 1970s.  Meanwhile, in terms of literacy, 90.9 percent of the overall population, age 15 and over, can read and write, with some differences attributed to gender.  These rates of literacy show a marked improvement when compared with statistics showing an overall literacy rate of around 63 percent in the late 1970s. The Human Development Index ranking for Chinahas also improved over the years – again, as noted above.

Nevertheless, Chinais still faced with a number of challenges. One notable concern has been the matter of regional disparity.  In the interior regions and in the western part of the country, which have limited resources and which are geographically distant from the more populous south and east, poverty has been a reality, along with limited infrastructure and services.  In some areas of the interior and west, potable water is difficult to access, arable land is limited and there are insufficient health services and schools.  In some cases, consumption levels are less than a dollar a day, illustrating that while strong development achievements have occurred generally in China, in certain regions, poverty remains as a rather intractable problem. The government's earlier policies, which concentrated on actively concentrating on development in the industrial northeast and the more commercialized south and southeast, have, in many senses, exacerbated the regional disparities.  Indeed, going back several decades to the late 1940s, more than 70 percent of China's industrial development had been concentrated in coastal regions.

The regional disparities are superseded by the rural-urban divide as the major contributor to growing inequity in China.  Generally, urban workers have enjoyed higher income than rural counterparts.  As shown by the data in the China Annual Statistical Book, a large city like Shanghaiboasts annual income that is significantly higher that other regions.  Likewise, the average annual income in the eastern province of Jiangsu has typically been far more than that of the western province of Guizhou.  Indeed, in 1996, Jiangsu had more than four times the income level than Guizhou.. That said, from the 1980s to the 1990s, there was an overall increase in income distribution in rural areas which cannot be ignored. Still, that increase was comparatively smaller than the rise in income seen in urban areas – in fact amounting to around 40 percent of urban income. Income differences present only a partial view of the rural-urban divide. Urban residents often benefit from a host of government subsidies and quality of life improvements that rural residents do not enjoy.  For example, urban dwellers receive low-cost capital for urban enterprises, they enjoy better benefit plans from employers including social insurance and subsidized housing, and they have easier access to better quality medical facilities. In these ways, rural dwellers have typically been more likely to be vulnerable to poverty when compared with urban dwellers.

Poverty in China,however, cannot be easily dichotomized into regions, nor can it be considered in binary urban versus rural terms.  In fact, Chinais being faced with the emergence of urban poverty, a feature that may be directly related to the country’s rapid level of growth and the associated problem of income inequality.   In some areas of rapid growth, incomes have increased exponentially, leading to increased savings.  One of the effects of the aforementioned rise in income levels has been a concurrent increase in bank savings.  Urban and rural residents of Chinaapparently increased their savings from the 1970s to the 1990s by over 71 percent.  But media attention on these increases in incomes and associated savings, which have been charted over the course of decades, often overshadow the marked increases in urban poverty that has been occurring in recent years.

Although the Chinese government has moved the economy in a direction for integration with the global spectrum, it has simultaneously attempted to maintain certain interests of a planned economy, such as egalitarianism.  However, the reality has been that economic reforms have given rise to quite a broad degree of income disparity. As might be expected, there are income disparities between residents of rural and urban areas, and across regions, but there are also income disparities within and among urban residents.

Specific changes, such as the fiscal decentralization, have effectively limited the central government’s ability to redistribute financial resources to areas more plagued by poverty, such as the western and interior provinces. These features are not limited to the realm of the economic and financial system of China, but also extend into the area of culture and ethos. Despite the government’s efforts to hold on to ideas of egalitarianism and communal values, as the economy moves in a more competitive direction, there has been a gradual shift toward an appreciation for individualism.  The burgeoning notion of individualism cross-cuts prevailing socialist conceptions of shared prosperity.  As such, a more complex -- and often contradictory -- set of interests are advancing across China, resulting in a tension between traditional and newly-emerging cultural values. Complicating matters has also been the problem of unemployment – a condition that simply was not present under the traditional socialist framework.

The conventional wisdom has been that reforms, including the closures of many state-owned enterprises with over-weighted workforces, in conjunction with reduced social welfare provisions, and the effects of market policies, have collectively contributed to rising urban poverty.  The downsizing of mega-enterprises has often resulted in an influx of unemployed workers from remote regions to highly-populated urban centers, which add to the level of unemployed already there.  Indeed, the closure of state-owned enterprises in cities has also resulted in an increase in the ranks of idle and unemployed workers. Meanwhile, the conversion of farmland for commercial and industrial use has spurred an increase in people being forced to migrate to urban centers. In fact, there has been a marked decrease in the number of people living in farmland and other rural areas as a result.  The overall increase in the number of people simply living in urban areas --with low incomes or none at all -- has resulted in an a relative increase in the level of poverty in cities.

These features of socioeconomic dislocation are compounded by the fact that there is a reduced safety net characterized by fewer services paid for by the government (including reforms to the social security system), as well as uncertainty associated with market forces, not to mention inflation rates which deleteriously affect how far resources can go, and thus lower overall standards of living.  As a consequence, there has been an upsurge in urban poverty.

A study by Xin Meng, Robert Gregory and Youjuan Wang looked at cross-sectional household survey data from 1986 to 2000, and charted changes in income, inequality and poverty over that period in order to capture some of the determinants of poverty in China. The study revealed that the increase in poverty in the 1990s appeared to be linked with increases in the relative food price. It also attributed increases in poverty to the emerging need to expend finances on social welfare provisions, such as education, medical care and housing, all of which were previously provided by the state prior to the implementation of economic reforms.  The study also factored into the equation the rising uncertainty of income and instability associated with the broader global market place, illustrated in the effects of certain measures, such as the deregulation of grain prices.  Interestingly, there was an increase in the savings rate among the poor, which appeared to be linked with this climate of uncertainty.  That is to say, the economic anxieties of poorer people may well have spurred them to save what few resources they have available.  By saving portions of their income and having to spend more for services previously provided by the state, their overall standard of living was severely compromised.

Indeed, based on the findings of the aforementioned study, it would seem that even though increases in income levels normally reduces poverty, such an effect has been offset by the reforms of the 1990s to the extent that urban poverty was higher in 2000 than it was in 1986. Clearly, one possible conclusion that can be drawn is that whereas poverty has overall been reduced over a period of decades, economic reforms have spurred other socio-economic challenges, such as the emergence of urban poverty, as well as the amplification of inequity. By way of illustration, the World Bank has noted that despite the monumental success China has had (as noted above) in moving people out of poverty, the country must now confront the prevalence of inequality, the varying rates of development and prosperity which stress the texture and levels of inequality even further, and the widening chasm between skilled and unskilled workers in a more global and sophisticated marketplace. 

The prevailing theory has been that market economies invariably involve inequality and income disparity by virtue of the competitive thrust.  The degree of inequality and disparity might well be exacerbated in economies undergoing rapid transitions from command systems to more open market-based structures.  Moreover, in a country like China, which is undergoing economic development and transformation to the market model, and with many workers displaced in some way, it is almost impossible to ensure that there is ubiquitous and equal prosperity achieved at reasonably the same rate.  Still, a failure to address the growing gap between those who are prospering and those who are not might well produce certain societal stresses, which could adversely affect socio-cultural stability.  With these potential ramifications in mind, it is not difficult to understand why the government of Chinahas been trying to implement poverty alleviation plans, as well programs oriented toward providing equal opportunity for its citizenry.

In order to move forward with poverty alleviation and in order to the provision of services across the entire country, Chinamust consider systemic reform to accompany ongoing economic reform.  That is to say, in addition to opening the economy in keeping with market principles, if Chinawishes to adhere to the notion of fairly equitable living standards, then it will have to improve services in certain regions and in impoverished enclaves. To this end, there has been some narrowing of the gap between rural and urban areas, and across regions in recent years, but mostly in the realms of educational and medical services and institutions. Nevertheless, as it goes about the task of reforming the financial sector and making state-owned enterprises more efficient, Chinamust simultaneously consider the socio-economic and cultural effects.

China's 10th “Five Year Plan,” aimed at economic and social development from 2001 through 2005, calls for economic growth, restructuring and reform of state-owned enterprises as well as the financial system and legal infrastructure, encouragement of private investment among other initiatives targeted toward integration in the world economy.  The plan, however, also includes initiatives for development of regions where conditions of human development are poorer, under the Western Region Development strategy. A grant program has also operated under the aegis of the Development Fund for Aiding Underdeveloped Areas.   Meanwhile, in 1998, the government put forth a plan to guarantee residents minimum living standards; the plan was established in 330 cities. Other initiatives by the government have included the introduction of a pension system based on the Chilean system of social security, and reforms to the medical insurance system.

Rural and urban connections are also addressed as regards poverty and other conditions of human development, in conjunction with the wider ecological landscape.  In this way, government plans and policies have addressed environmental degradation by looking toward sustainable development practices. Whereas Chinahas managed to reduce industrial air and water pollution emissions, and although it has worked to reverse the effects of deforestation, the two decades of rapid growth have had deleterious effects on the environment.  In particular, unsustainable natural resource exploitation, in conjunction with rapid urban development, together constitute core features of China’s development conundrum.

Within the international spectrum, questions about human rights abuses, the lack of political democratization, and anxieties about China’s economic competitiveness and its increasing demand for energy, present their own set of challenges as the country seeks to attract foreign direct investment and as it moves toward increasing trade integration.


Written by Dr. Denise Youngblood Coleman, Editor in Chief, www.countrywatch.com.  See Bibliography for research sources. Supplementary sources: “China 2020: Sharing Rising Incomes: Disparities in China” by World Bank, 1997; “Poverty and Inequality – The Other Face of the Asian Miracle” by World Bank, 1997; World Bank Selected Indicators, 1997; “Assessing China’s War on Poverty” by Albert Park, 1997; “Income Inequality Widening” in China Economic Review, 1997; “China: A Shared Poverty to Uneven Wealth?” by Taejoon Han, n.d.; “Poverty in Urban China” by Xin Meng, Robert Gregory and Youjuan Wang, n.d.;  China Annual Statistical Book, 1997; China Statistical Yearbook, 1995; World Bank Country Brief for China, March 2005 online version.