People overestimate China in the short term and underestimate it in the long term. In the Year of the Tiger, which kicked off this week, fears are that the omicron will defeat the country’s Covid zero strategy, throwing the world into recession. But more important than the future of the country at the end of 2022 is that it will happen in 2032. Or 2042, or 2052.
It won’t be long before the Chinese economy is twice as large as the American economy. And it is this China, which can reach a third of the world’s GDP, that is unknown in Brazil.
The scale of what happens here is almost unimaginable. Every two years, more cement is used in China than in the entire 20th century in the United States. The country alone accounts for more than 50% of the world’s cement demand. And that demand is far from abating.
More than 400 million Chinese live in the countryside, with an income comparable to that of a Brazilian in rural areas (in Gansu, a poor province, the per capita income is R$ 2,500 per month, counting the cities), while in Shanghai this income is five times bigger. But in China the rights to public services are linked to the place of birth, the so-called hukou.
Thus, a migrant can go to the big city, but he does not have the right to school for his children, nor public health (which is free only up to a point — expensive treatments are a problem for families). What happens is that gigantic cities end up being created in the poorest provinces.
And this urbanization is a great engine of growth. The Evergrande crisis is a short-term problem, but not a long-term one. Although the basic infrastructure in big cities is ready, there is still a lot to come.
One of the government’s fears to maintain the Covid zero strategy is because hospitals and clinics are lacking in much of the country. And one of the big questions that must be answered in the coming years is: will China create a social safety net?
Today, here it is capitalism almost in its pure essence. The state provides something, such as almost free education, but families are responsible for taking care of their own if there is a problem, such as unemployment or illness.
Even in the pandemic, with people in lockdown, the government did not distribute income on a large scale as other countries did. At most, there was some occasional help, for the poorest.
Much of the country is backward. There are people who live in houses with mud floors, not unlike the poorest parts of the world. And country schools are weak, on average. If on the one hand this generates immense inequality, on the other it is a sea of ​​opportunities for the country’s growth, as the development of the rest of the country continues to drive changes in the most backward areas.
There is no limit for China to grow 5% a year for the next 30 years. If that happens, by 2052 the productivity of the average worker will still be no more than two-thirds of that of an American.
Cities like Shanghai are already in a clear process of de-industrialization. The odds and ends industries are already leaving the country, because even in the poorest provinces wages have not been hungry for years.
In the next 30 years, a population that is twice that of Brazil will emerge from poverty. Will China be a rich country? Even if that doesn’t happen, as authoritarianism can destabilize the economy, and there are demographic barriers, the changes for the rest of the world will be tremendous. Will we be ready for this?
Source: Folha
I have over 8 years of experience in the news industry. I have worked for various news websites and have also written for a few news agencies. I mostly cover healthcare news, but I am also interested in other topics such as politics, business, and entertainment. In my free time, I enjoy writing fiction and spending time with my family and friends.
