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June 27, 2005

The banquet continued from last night to this evening. One of the classmates ZZP could not make back from Kunming last night. He wanted to see us. So everyone but Mr. Wang showed up. It was fun. But due to the law of diminishing marginal returns it was not as much as yesterday. I did get a chance to discuss some serious issues facing China with ZZP. For example, tonight’s dinner was paid for again by another third party who’d like to be on the best side of the government official. This type of corruption was due to the power monopoly. The government controlled all important resources. In order to obtain them, enterprisers had to do what they could. This situation may not change for the next fifty years when all the resources were distributed and all sectors with “violent” profit margins were occupied. Another issue was about income disparity between haves and have-nots. The poorest and most powerless group of people in China was the farmers. There were so many of them that they could work for less than $50 a month. The majority of the growth of the Chinese economics was supported by them and foreign direct investment (FDI). On day when they demanded more compensation and the neighbor countries improved their investment environment, FDI would flow out and the economy would slow. Another bottleneck was political reform. Current politicians in power would not like to take risks. To them stability was the utmost. Only when next a couple of generations grew up things may change. The youth did not have to worry about their live-hoods as much as their parents because by then China would be rich enough. They could afford to worry about human rights, environment, and what’s good for the society. China for now is still rapid changing and people are seeking for their positions. It is almost like the gold rush period in the US. Everything goes.

posted by Unknown @ 7:09 AM