The next three generations of China will permanently change the economic landscape of the world.
I had the unique opportunity to visit China as part of a Discovery Trip for Eminent Overseas born Chinese. Our group of 80 overseas born Chinese citizens toured several major cities of China and met with government leaders who shared with us the economic and demographic growth plans of China. Members from our group of overseas Chinese were involved in various fields including law, medical science, commerce, new technologies, real estate, and hospitality. Of the cities we visited, Beijing, Jinan, and Shanghai have made the most progress in the past 10-15 years with a building filled skyline as far as the eye can see. With modern freeways, a Mag-Lev train in Shanghai, and world-class airports, China is successfully paving the road to elevate the average citizen’s standard of living. In addition to accomplishing so much, the government officials I met proudly announced that China also saves approximately 50% of their GDP.
It is all VERY impressive.
The direction for developments in these key cities has set the tone but since change can only happen so quickly across so many people, China still has a lot of work ahead of them. Of the 1.3 billion citizens, 700 million live in rural farming areas and have little to no formal education. The other 600 million are scattered in small towns and some major cities across the country but the standard of living for the majority is only several permutations more advanced than those in the farming communities. Among this group of 600 million, only 40-50 million (less than 5% of the entire population) live a more modern lifestyle found in the larger cities like Beijing, Shanghai, Jinan, and Hong Kong. These numbers are important to keep in mind because the media, both in the US and China, tends to focus on the more advanced parts of China. For that small five percent of the population, it is, but for the majority, it still is the old China.
This is slowly changing though. The Chinese government, being aware of the dangers of advancing one demographic while ignoring another, aims to transition 10 million rural citizens to urban citizens each year. This accomplishes two things for China. One, it drives demand for domestic consumption so factories need not rely so heavily on exports (which mainly go to the US). And two, gradually raises the average quality of life while allowing the agricultural industry necessary time to learn how to feed the same number of mouths with fewer workers. This brings to light one of the more important issues regarding China’s growth, education. The cost of higher education in China limits the country’s efforts to raise the average standard of living. The Chinese government funds nine years of early education but education beyond that is the responsibility of the parents. With the average citizen’s salary of only 3,000RMB (42USD) per month and college fees ranging from 40,000RMB to 60,000RMB for a 4-year degree, only the very hard working or successful families can afford to send their children to college. Again, the shift to migrate more citizens is slow but it is happening.
While the global economy takes time to recover, China is shifting their manufacturing efforts to meet domestic needs as citizens steadily migrate more toward a modern lifestyle in their larger cities. As the next few generations of China flourish in more modern lifestyles, China will become an even more enticing home for foreign investment. The government has already set forth initiatives to protect intellectual property rights of foreign investors and building up of the country’s own intellectual property as much of the current technology in China is owned and led by foreign entities.
This is all exciting news for overseas Chinese citizens. As these demographic and economic developments earn China more credibility in the world’s eyes, it quickly becomes apparent that overseas Chinese citizens have a unique opportunity, and some may argue a responsibility, among their peers. During our visit, it was clear that it is China’s hope that overseas Chinese will take the opportunity of sharing solid blood ties to motherland China by promoting working relationships and cooperation between China and other countries in the future. During our tour we visited Qufu, the small hometown of Confucius. In Qufu, many of the older roads are broken and some of the city walls used for protection during violence in the past are crumbling. Electricity is conserved at night and the occasional street light offers mediocre light in the dark neighborhoods while many people walk, ride a bike, or use a small gasoline motorcycle since cars are expensive. Surprisingly, this lifestyle is shared by over 1 billion citizens across China but for the most part, they are happy. Not content, just happy and ambitious as they all strive to better their family’s quality of life generation by generation.
