Economics: China’s brutal introduction to the modern world

China has made better economic decisions than most of Africa. But a slowing economy and rapid technological change underline the need for reform.

Chinese factory robots. (Chinese promotional image)

WASHINGTON, February 15, 2016 — The Chinese New Year has just passed. Feng Shui Master Raymond Lo says of 2016, the year of the Fire Monkey, “the year 2016 can be regarded as flying monkey, which is the drones flying in the air. It is expected the application of drones and robots will be getting more active and popular in 2016.”

Technology grows by leaps and bounds. Even Feng Shui masters and astrologers know that. Computer and robotic technology are now so ubiquitous that  there is no stopping their growing influence over our lives. Artificial intelligence will arrive by stealth; it isn’t anything we can see, and when it arrives, it will probably show up without you noticing. After all, it’s nothing more than software—the voice of Siri coming from your pocket.

Robots have made a strong impact on the Chinese economy. One company that previously employed 650 people now employs 60, with plans to drop that figure to 20. According to Tech Republic, “The Changying Precision Technology Company factory in Dongguan has automated production lines that use robotic arms to produce parts for cell phones. The factory also has automated machining equipment, autonomous transport trucks, and other automated equipment in the warehouse.”

Besides cutting labor by 90 percent, the move to robots has increased output by 162.5 percent.

What has occurred at Changying should send shivers down the spines of Chinese economic planners; what will they do with all these people who lose or can’t get jobs? The government will come in for blame. The Chinese people already blame corrupt officials for the slowing economy.

There’s a symmetry here. When growth was at 10 percent, the planners took the credit. They may now try to shift blame to technology and those employing more sophisticated technology. Business owners and managers will be branded as selfish, greedy bourgeoisie, the reason that a strong government is needed to protect the masses.

China and, to some extent, India seem to be two of the few developing countries to actually take seriously the role of their societies in the future of humanity. This serious attitude is best expressed by the words of President Xi Jinping:

“The world is too big, and challenges are too many, to go without the voice from China being heard, without solution ideas from China being shared, without the involvement of China being needed … China will, as always, open its arms to embrace the world, and offer its helping hands to those in need. Our circle of friends will grow bigger.”

To this end China has undertaken prudent economic policies in the last 30 years, opening up more economic decisions to the general population.

China’s example is not taken seriously by African political leaders, who are uninterested in giving their people a greater say in anything. If they cared about and listened to regular Africans, they might have implemented policies for economic growth—sound and fundamental growth that can only be driven by de-centralized, liberty-oriented economic policies.

Human beings aren’t rational, but our economic systems and the concepts of justice and freedom must remain rational. Most African leaders are guilty of betraying the aspirations of black people as set out by the ideals of the anti-imperialism struggles, ignoring concepts like “justice” and “equal rights,” bedrocks of a sound and dynamic economy. They might be summarily executed if their people had the right to bear arms, a key right of a free man.

In spite of its efforts so far, China still needs fundamental changes if the people are to keep up with the social changes wrought by technology. “Ant Tribe” is a term for graduates who exist on low-paying jobs—young people who are both educated and hard working—and the Ant Tribe is growing. Its members feel cheated by life. They back Xi Jinping’s anti-corruption drive, which is taking down connected people who are not necessarily smarter or more talented than Ant Tribe members.

People with connections in China’s government steal and defraud society. At the same time, these young graduates work dreary jobs and exist in hovels. But while the anti-corruption drive is popular, it does not translate into a better life and better jobs for the Ant Tribe, and technology only puts those further out of reach.

At his formal New Year’s speech, Xi Jinping said, “To build China into a comprehensive moderately prosperous society, we need the effort of all the 1.3 billion people in this country.” If he were to manage that, the Year of the Monkey would be exciting indeed.

Making his words a reality, however, would require that the government show faith in the people. It would have to free up the financial markets and allow more competition against state financial institutions. It would have to allow villagers to lend out money if they wanted to provide financial services, democratizing finance.

It is time up for the Chinese government to loose some controls and find ways for the Ant Tribe to contribute; otherwise they will become a destructive force. The rise of new technologies makes this problem more critical and more acute. As long as the Chinese government ignores the reality that is plain even to astrologers, it will be trapped with millions of angry, unemployed and increasingly displaced citizens.

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