It’s clear that the Chinese economic rise is fundamentally affecting the world, as I (and many others) have written about before. But what does this mean? The average citizen takes home roughly $7,500 USD (at Puchasing Power Parity) per year. Amazingly, that salary has increased roughly 8-10% per year for quite a long while. It’s hard to imagine what it would be like to see pay raises of 10% every year. I’ve seen some jumps in pay as a result of promotions, but, even at my best I’d guess that it was never more than 4% or so (which is about what it will be when I’m promoted to Major later this year). So what are the Chinese putting their new found wealth into?
According to a recent NY Times article, it’s Botox:
The breathtaking pace of transformation for upwardly mobile Chinese — from bicycles to cars, village to city, housebound holidays to ski vacations — now extends to faces. In just a decade, cosmetic and plastic surgery has become the fourth most popular way to spend discretionary income in China, according to Ma Xiaowei, China’s vice health minister. Only houses, cars and travel rank higher, he said.
The article goes on to explain that only the US and Brazil outrank China for plastic surgery. Interesting thought, that despite our many differences, that Chinese citizens would opt for similar ways to funnel discretionary income. As a side note, one of the interesting differences in plastic surgery choice is that Chinese women prefer to have work done to make the bridge of the nose more prominent (the opposite of what many Caucasian American women select), as well as having work done around the eyes to give a more “open” appearance.
Juxtapose that concept with two articles that nearly simultaneously popped up from the same news source. The US has requested it’s “annual meeting” with the People’s Republic of China on human rights issues. The article relays that
The American announcement bluntly says that the talks will focus on “the recent negative trend of forced disappearances, extralegal detentions and arrests and convictions” — highly unusual in such a statement and most likely reflecting Washington’s growing frustration with the human rights situation in China.
China is in the midst of a crackdown on dissent in which dozens of lawyers and activists have been rounded up. Some have been detained for brief questioning; others have disappeared for months without a trace.
Lastly, the Chinese Communist Party (CCP) arrested and detained at least 36 members of an evangelical protestant church during their Easter service. The article relates that
The Chinese Communist Party tightly manages religious activity, requiring the faithful to join state-run churches, mosques or Buddhist temples. Until the most recent crackdown on Shouwang and a handful of other unregistered churches, such congregations had enjoyed relatively wide latitude from the authorities.
What analysis about the Chinese people can be applied to the compilation of these articles? First of all, at best, generalities can be gleaned. So it is with a grain of salt one must take three individual stories about a country of 1.3 billion people. But, here goes:
1. Wealth spending similarities.
It seems likely that Chinese people will choose to spend their new wealth in generally similar ways to those in the United States and the rest of the developed world. Houses, cars, travel and plastic surgery definitely sounds normal to American ears (especially Jerry Jones‘ ears).
2. Chinese Benefit Cost equation.
The CCP is betting on finding the “sweet spot” between economic growth and liberties, and has been very successful (considering it has run the largest country in the world since 1949). The recent detentions (notably Nobel Peace Prize winner Liu Xiobo and Olympic Birds Nest Stadium designer Ai Weiwei) and crackdowns on various religious and citizen gatherings seem harsh to the United States and much of the Western, developed world. However, the CCP likely calculates just this sort of thing: how much political/social/religious dissent do we have to tolerate based on what we’re providing our citizenry? Similarly, the average non-CCP citizen has to make the same cost-benefit calculation. At 10% annual growth, the CCP has a green light to police up dissent with fairly wide latitude. The average citizen is, to a certain extent, OK with Ai Weiwei being thrown in prison for “pornography” and “economic crimes” as long as that 10% keeps coming. So, the million dollar question (or billion or trillion) is ~ at what point does that benefit cost equation start to tip the other direction? 5%? When the newly rich can’t afford new cribs (houses), whips (cars), Macau (travel) or Botox (plastic surgery)? Is it when annual gains are below inflation?
**After writing this post, Nick Kristof from the NY Times has penned two op-eds about this dichotomy. The first is about China’s human right’s issues, the second is about the staggering gains made economically (and the positive gains). The most interesting thought he passes on is this:
What’s the trade-off between imprisoning a brilliant Nobel Peace Prize-winning dissident like Liu Xiaobo and saving hundreds of thousands of babies’ lives each year through improved health care? There isn’t one. The two sides of China are incommensurate. They are the yin and yang of 21st-century China.
The United States tends to perceive China through a Manichaean lens — either the economic juggernaut overcoming poverty and investing brilliantly in alternative energy, or the Darth Vader that tortures dissidents. In fact, both are equally real.