I spent part of the morning in a Marketplace editorial meeting where the guest speaker was our very own Shanghai correspondent Scott Tong. He’s here in LA for a bit. He shared some fascinating insights about China.
Morning Report Host Bill Radke asked Scott about the perception around the world that China is an economic powerhouse that knows exactly what it wants, can do anything it wants and has mapped out a future.
Scott’s response: you should be leery of any sentence that begins “China is…” because no one can say definitely what China is now and certainly not what it’s going to be in 5 or 10 years. He said the popular belief is that China is homogeneous and operates as one powerful entity, but in fact, China is extremely diverse and really should be considered a continent rather than a country. I thought that was an interesting comment.
As an American journalist working in China, he said sometimes it’s difficult to get Chinese people to talk to him for stories. They always ask, why should I talk to you? Scott said he tries to convince them that educating people about China contributes to the greater good. Sometimes they agree, sometimes not. But his goal is to get one Chinese voice into every story.
He also knows he’s being monitored. China’s state security agency has called Scott’s assistant several times to ask questions about Marketplace, the audience, etc. Scott says China’s government is leery of non-profit organizations, as if they all have the propensity toward revolution. The security people call Scott’s assistant at home, always after her boyfriend leaves the apartment, suggesting that they are literally watching.
On China’s stimulus package, Scott says, China was able to disperse the money quickly (unlike in the US) but the downside is that a lot of it wound up nowhere near the real economy. Besides corruption, a lot of the money found its way into the Chinese stock market. And by the way, Scott says, China’s stock market is basically a casino and is no reflection of corporate China or the country’s economy.
He talked some about China’s savings culture and said that the government is risk-averse as well. It’ll try new things, like buying foreign companies or new financial products, but if it gets burned, it’ll back off and look for something else to try. That also speaks to the earlier point that China doesn’t know exactly what it wants to do.
Scott was also asked about the one-child policy. He said it’s become so ingrained in China’s psychology that no one even wants to have more than one child. But the economic result of the policy will be that fairly soon, China will start running out of workers. As this LA Times story suggests, China’s elderly will overwhelm the young people:
With fewer workers to support an aging society in need of care, China faces the same demographic squeeze confronting Western nations. The difference: China’s family-tinkering policy has accelerated a shift that the country is ill-prepared to manage and finance.
“The problem is the age wave is coming while China is still relatively poor,” said Richard Jackson of the Washington-based Center for Strategic and International Studies. “China may be the first major country to grow old before it grows rich.”
And it’s not going to grow rich unless it can sell things to the rest of the world. Scott says the Chinese government is desperate for the world to focus on the products China makes well. Traditionally, of course, the Made in China label has been synonymous with junk, and the toy recalls and other recent product fiascos have only tarnished the brand further. Scott points out that not all of the blame is on Chinese factories. The multinational corporations that sell these products have to make sure they are doing quality checks before their name goes out on a bad product.
If you have any questions or comments for Scott, I’ll be happy to pass them along.
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