India and China and the Meaning of GDP

There's been discussion a couple times in the comments sections on this blog about the economic development going on in India compared to China's. Comparing the two countries is interesting since both Asian countries have populations over 1 billion and are beginning to get things turned around.

I heard a nice discussion about the two countries on NPR a couple days ago:

Image from Time

MICHELE NORRIS, host: It's been said, most notably by Winston Churchill, that democracy is the worst form of government, except for all the others. But while India has the world's largest democracy, it also has widespread poverty and a host of other economic problems. And now some Indian citizens find themselves looking enviously at a neighbor that has a very different sort of government: China.

David Kestenbaum with our Planet Money team brought back this story from India.

DAVID KESTENBAUM: You know how you take a trip, and sometimes the most interesting thing is that it makes you see your home differently? That happened to newspaper columnist Karan Thapar. He recently left his home - India's capital, Delhi - which can feel kind of crowded and broken down. He went to China, Beijing, and what he saw made him jealous.

Mr. KARAN THAPAR (Newspaper Columnist): There was nothing that I could find that seemed poor or Third World or shabby or dirty. The buildings are immaculate, they're resplendent. The roads are eight-lane wide and awe inspiring.

KESTENBAUM: It was particularly painful, he says, because if you think of the two countries in a race, when the starting gun fired, they were both at the same place. In the late 1940s, India became independent, and the People's Republic of China was born. Both were equally poor then, but in the race, China is now way out in front.

Both countries are about the same size, over a billion people, but China is three times richer.

Read or Listen to the rest of this story

On the one hand, you have a "benevolent dictatorship" bringing the masses of China up from poverty. On the other hand, you have a representative democracy not steering things in India quite as effectively.

Glorifying the Chinese Communist Party for its economic successes (see Thomas Friedman) can be tiring. But at the same time, one has to give credit where credit is due. China's economy is growing like crazy while much of the world's is in bad shape. The Chinese government is very swift and decisive. And its people are benefiting a lot from its decisions.

Besides China though, one-party states have a very poor track record on economic development. At the end of the NPR story, they mention that China's rise is unique amongst non-democracies. There does, in fact, appear to be something to the notion of "capitalism with Chinese characteristics."

One thing Chinese leaders love to point to is the country's sustained and robust GDP growth. Averaging over 10% GDP growth for a decade is, indeed, impressive. But what does GDP growth actually mean? How does that GDP percentage number we hear all the time relate to life on a daily basis?

A New York Times Magazine article from a week or two ago asks this question and had a very insightful discussion.

Here are a couple sections of the article that I particularly appreciated:

Image from Google
...

But criticisms of G.D.P. go deeper than just its use, or misuse, by politicians. For years, economists critical of the measure have enjoyed spinning narratives to illustrate its logical flaws and limitations. Consider, for example, the lives of two people — let’s call them High-G.D.P. Man and Low-G.D.P. Man. High-G.D.P. Man has a long commute to work and drives an automobile that gets poor gas mileage, forcing him to spend a lot on fuel. The morning traffic and its stresses aren’t too good for his car (which he replaces every few years) or his cardiovascular health (which he treats with expensive pharmaceuticals and medical procedures). High-G.D.P. Man works hard, spends hard. He loves going to bars and restaurants, likes his flat-screen televisions and adores his big house, which he keeps at 71 degrees year round and protects with a state-of-the-art security system. High-G.D.P. Man and his wife pay for a sitter (for their kids) and a nursing home (for their aging parents). They don’t have time for housework, so they employ a full-time housekeeper. They don’t have time to cook much, so they usually order in. They’re too busy to take long vacations.

As it happens, all those things — cooking, cleaning, home care, three-week vacations and so forth — are the kind of activity that keep Low-G.D.P. Man and his wife busy. High-G.D.P. Man likes his washer and dryer; Low-G.D.P. Man doesn’t mind hanging his laundry on the clothesline. High-G.D.P. Man buys bags of prewashed salad at the grocery store; Low-G.D.P. Man grows vegetables in his garden. When High-G.D.P. Man wants a book, he buys it; Low-G.D.P. Man checks it out of the library. When High-G.D.P. Man wants to get in shape, he joins a gym; Low-G.D.P. Man digs out an old pair of Nikes and runs through the neighborhood. On his morning commute, High-G.D.P. Man drives past Low-G.D.P. Man, who is walking to work in wrinkled khakis.

By economic measures, there’s no doubt High-G.D.P. Man is superior to Low-G.D.P. Man. His salary is higher, his expenditures are greater, his economic activity is more robust. You can even say that by modern standards High-G.D.P. Man is a bigger boon to his country. What we can’t really say for sure is whether his life is any better. In fact, there seem to be subtle indications that various “goods” that High-G.D.P. Man consumes should, as some economists put it, be characterized as “bads.” His alarm system at home probably isn’t such a good indicator of his personal security; given all the medical tests, his health care expenditures seem to be excessive. Moreover, the pollution from the traffic jams near his home, which signals that business is good at the local gas stations and auto shops, is very likely contributing to social and environmental ills. And we don’t know if High-G.D.P. Man is living beyond his means, so we can’t predict his future quality of life. For all we know, he could be living on borrowed time, just like a wildly overleveraged bank.

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Most frequently in our conversations, Stiglitz gravitated to the philosophical questions of measuring progress. What are the best indicators beyond G.D.P.? How do you actually pick the most important ones? As Stiglitz recounted, Sarkozy gave the commission freedom to tear apart G.D.P. as its members saw fit. No doubt, the French president saw political advantages in the undertaking. With a more comprehensive set of indicators, a leader trying to steer a course through a faltering economy could conceivably point to successes in areas other than jobs or productivity. “I can tell you what Sarkozy told me about what motivated him,” Stiglitz said. “What he said was that he felt this tension — he is told to maximize G.D.P. but he also knows as a good politician that what people care about are things like pollution and many other dimensions to the quality of life. Those dimensions aren’t well captured in G.D.P. And that puts him in a difficult position. When he comes up for election, people are going to grade him on G.D.P., but people are also going to grade on the quality of life. And so he sort of said, Can’t you in some way resolve this tension by constructing measures that don’t pose these dichotomies?”

...

Suppose you’re driving, Stiglitz told me. You would like to know how the vehicle is functioning, but when you check the dashboard there is only one gauge. (It’s a peculiar car.) That single dial conveys one piece of important information: how fast you’re moving. It’s not a bad comparison to the current G.D.P., but it doesn’t tell you many other things: How much fuel do you have left? How far can you go? How many miles have you gone already? So what you want is a car, or a country, with a big dashboard — but not so big that you can’t take in all of its information.

Read the Entire Article

Listening to the news, we often hear GDP statistics. The United States had a GDP of 5.4% in the last quarter of 2009 and 3.2% in the first quarter of 2010. But from what I hear and understand of what's going on in the US economy outside of news reports, those numbers don't seem to have much connection with reality. Generation Y can't find work, Generation X is facing a serious recession during their prime-time working years, and Baby Boomers can't retire or sell the suburban houses they purchased in route to achieving the American Dream.

Taken at face value, those recent US GDP numbers of sound pretty decent. Factor in the context of the life outside of the numbers though and they don't seem as meaningful.

I think this same principle of looking at GDP compared to "real life" in China leads to similar results.

China's economic miracle continues (11.9% in the first quarter of 2010). Millions of people's lives are improving. Whether that improvement comes in the form of migrant workers working in a factory, a family owning a small store front, or international business going on in a first-tier city, there is a lot of great stuff going on in China right now.

Despite all of the great economic growth though, life in China can be difficult and confusing.

Evan Osnos, a China writer for The New Yorker, wrote the following when discussing the continued school attacks that've been going on in China recently:

Whatever the combination of marginalization and mental illness, these cases are a reminder of how disorienting Chinese life can be in 2010. For those already fragile, there is not much to lean on. A Xinhua story about Zheng Minsheng, who murdered eight children outside their primary school last month, described him as “a ‘loser’ without a job or a wife and already middle aged.” Perhaps the best diagnosis of this phenomenon comes from an unnamed twenty-eight-year-old factory worker that a Los Angeles Times reporter encountered at the hospital in Taixing after the attack there Thursday: “This man was obviously sick,” the worker said. “But our society is very complicated. The economy has changed so quickly. It is hard to know where you are.”

Read the entire article

GPD tells us how fast our economies are going. But it fails to tell us much of anything else. Knowing the speed at which one is traveling is, obviously, important. There's a lot more to the health of a nation and its people though.

Returning Home

A couple of my favorite scenes in the show《蜗居》 - "Dwelling Narrowness" - that I wrote about a couple weeks ago involve young women thinking about whether they are cut out for life in a sprawling Chinese metropolis. In both instances, the woman questioning whether to stay in the big city is in a very difficult position. Her life is up in the air and it is not clear how everything will turn out with her.

This dilemma about whether to remain in the city or to return home to a simpler life is one that tens of millions of Chinese people must, at one time or another, face. There's no doubt that most of the people migrating to Chinese cities are benefiting from their move. Saying that, things in "special economic zones" and 10%+ annual growth are not always rosy. Life in such rapidly changing places can be disorienting.

Leslie T. Chang in the book Factory Girls does a great job of tackling this issue of migrant life in Chinese cities. Chang profiles a number of young women who are trying to make it in the southern boom town of Dongguan. Chang is a good writer who weaves nice narratives for the reader. But the thing that really makes Chang's book special is the access that she gets being a Chinese American woman. She gets the chance to do things that most western journalists never have the chance to do.

One of the passages that I enjoyed most from Factory Girls is the story of Chang accompanying a factory girl home for the Chinese New Year to the village in Hubei Province where she was raised. The description of life in the village is fascinating. It's a glimpse into a world that most westerners, even the ones who've lived in China, never get a chance to see.

This following passage from pages 272 - 4 is a beautiful summation of a Chinese migrant's life:

In lives blurred by journeys to strange places, there was one fixed point in the migrant universe: a farming village that was home. Agriculture brings little economic benefit now; family plots, of just under one acre on average, are too small to be profitable. But across China, the family farm is still being tended, because that is what people have always done. The land is less an income source than an insurance policy - a guarantee that a person can live and will not starve.

The continuing link to a family farm has stabilized China in an age of mass migration. Its cities have not spawned the shantytown slums of so much of the developed world, because the migrant who fails in the city can always return home and find someone there. A teenager may go out for work, leaving his parents on the farm. A husband who migrates may have a wife at home tilling the fields, or sometimes the other way around. A married couple might go out together, leaving young children in the care of their aged parents. In the city, a migrant might look desperate, but almost every migrant has a farm to fall back on.

...

At home, the travelers (migrants returning home for the Chinese Spring Festival) fall back into the slower rhythms of the farm. Hierarchy governs village life: The older men, the chief decision makers in their families, choose what is best for the community too. A family eats and farms together, and at night the children often sleep with their parents in one large bed. The older children discipline the younger ones, and the younger ones obey. Guests show up unannounced and stay for days; communal routines of eating and sleeping and, these days, television viewing absorbs them easily. There are no secrets in the village.

In the city, this way of life is already dead. Small families live in high-rise apartments alongside neighbors who are not their kind. People forge relationships with those they do not know. Young migrants in the city have lived freely among strangers; they have competed for jobs; they have dated whom they pleased. No matter how fondly they recall their rural childhoods, in truth the village cannot take them back.

It is not a new story. The ache of the traveler returning home is a classic theme in Chinese literature. One of the first poems a school-child learns, from the eighth century, is about a man who goes back to his village after a lifetime away, to find that he no longer belongs.

I left home as a youth, and as an old man returned,
My accent unchanged but my temples turned gray.
The children see me but don't know who I am,
Laughing, they ask where this stranger is from.

After reading this, I asked Qian whether she knows this poem that Chang quoted. I started reading it to her in English. In the middle of the first line, she interrupted me and rattled off the rest of the poem in Chinese. She is definitely familiar with it. She says that the poem "is written with simple language but is wonderful."

She found the original poem for me:

少小离家老大回，
乡音无改鬓毛衰。
儿童相见不相识，
笑问客从何处来。

For nearly all young people in China, life in the countryside just won't do. Young people of Chinese villages are leaving their native hamlets in droves. This poem, written more than a millennium ago, is particularly pertinent today.

I'm sure everyone reading this post has heard the "largest migration in the history of the world" talk about China's countryside spilling into its cities. There are good reasons young people want to leave the countryside. Life there is rough and there is almost no opportunity for personal development.

Life in developing Chinese cities does not guarantee happiness though. What is more of a sure thing is that a person who's lived in a city will not be able to happily return to life in a village. Going from an urban life to a rural one just doesn't happen very often, or at all, by choice.

It's hard to say exactly what the pull of life in cities is. As I noted in my discussion of "Dwelling Narrowness" a couple weeks ago, many migrants do not get to enjoy any of the benefits or culture that big cities provide. Instead, they are either working day after day in a factory or are saving up doing a white collar job to buy a condo. But the draw remains.

My knee-jerk analysis is that Chinese people are attracted to the opportunity of life in the big city. Just as Europeans a century or two ago were drawn to America, Chinese cities gives those in the countryside the chance to do something different with themselves. Like in America, there is no guarantee of success in Chinese cities. But, as evidenced from the emptying of small villages into cities, the possibility of a better life is enough to be a magnet for the masses.

Chinglish and 一知半解

My friend, Taylor, sent me this great collection of Chinglish signs that The New York Times just posted to their site. These are some of the best ones I've ever seen:







See All 10 Signs here

Here are some of the best Chinglish signs that I captured with my own camera while in China:


This is an absolute classic. I don't know how it could be more non-sensical. I took it at a youth hostel in Shanghai in 2006.


I don't know about you, but the numbers 7, 11, and 16 sound pretty delicious to me! I took this at a tiny restaurant half-way up Emei Shan.


This really isn't blatantly horrible Chinglish. I really like how it was translated though. From Hua Shan.

This Chinglish is all great. Westerners would be mistaken to think that they don't make the same mistakes though. In an effort to be "fair and balanced," I want to post some extremely lame attempts at Chinese characters done by westerners.

These are from the website - Hanzismatter - which is solely devoted to exposing idiotic tattoos and other westerner attempts at using Chinese and Japanese characters:


This is supposed to say "death" and "life." Unfortunately, the tattoo artist drew "death" mirrored. There are way too many of these mirrored tattoos on Hanzismatter.


This means "Stupid American."


Here is what the person who has this tattoo wrote about it on the internet:

While spending some time in Japan, I was lucky enough to get the kanji for "Dragon soul" tattooed on my arm at a studio in Tokyo. The artist helped me translate the phrase into kanji.

His tattoo means "foreigner." That's a pretty mean prank played by the tattoo artist!

I asked Qian if there is a word that means the opposite of "Chinglish." A word in Chinese that means a failed attempt at Chinese. She couldn't think of anything except maybe "Englese."

After I asked her, I saw the title screen from where I found the pictures above and the Chinese idiom it features: 一知半解.

Although I've never heard this phrase before, I was able to guess the meaning of this idiom immediately. It means something along the lines of, "a little knowledge and no understanding." So while there may not be a world exactly for "the misuse of Chinese characters" (I don't know, maybe there is), this idiom captures the meaning pretty well.

My Daily Commute in Kansas City

Qian recently got her driver's license. She's truly becoming an American now. She's not thrilled that she had to learn how to drive, but being in the midwest United States she has to learn how. The suburbs of Kansas City where we live do not have anything resembling useful public transportation.

We recently bought a car from my parents. It's an exceptionally normal, champagne-colored 1997 Toyota Camry. It's a decent enough car. It runs well and gets good gas mileage. Seeing that Qian and I both are drivers now though, we needed to get a new set of wheels. So a couple of weeks ago, we did:

That's my new, 2010 24-speed Gary Fisher Wahoo mountain bike. I splurged quite a bit of money on it. I figured that if I could ride it in place of driving a significant amount of times over this coming summer, then it would at least partially pay itself off in saved gas money (and insurance, and car payments, and repairs, etc.). Basically, this is my attempt at us staying a "one car family."

I bought the bike with the idea that I would ride the bike to my work most days that it's not raining. During my first week of bike ownership, I rode it three times to work and back. During my second, two times. And this week, four times.

One of the great things about where we live is that we have access to wonderful bike trails. Johnson County, Kansas just has a plethora of biking options. I'm really not interested in biking on sidewalks or on major roads where cars are flying by. I don't want to die.

If I jumped on a main street near my apartment and just took streets, I could get to work in seven miles. But I've chosen to ride trails at nine and a half miles (each way).

Here is a map, from this very useful Google Maps Pedometer site, of my route to work:

As you can see, it is not exactly a linear path. But my meandering has some benefits though.

Here are photos I took both this morning and yesterday morning on my rides into work:


A golf course, just before I get on the Tomahawk Creek Trail

The sun trying to peek through some trees. I cross over a half-dozen of these bridges on the trail.

A more natural bridge here


Another downed tree over the creek


Some swampiness


This hill is a bastard. It is the most difficult part of my ride every morning.


For every hill you climb though, you do have a hill to go down


A very Kansas landscape


This is one of the only bike lanes in the Kansas City metropolitan area. I'm really lucky that for the part of my commute that is not on bike trails, I have a bike lane upon which to ride.

I'm really enjoying riding my bike to work. Apart from the beautiful scenery, I already feel healthier and am not minding at all getting up earlier to compensate for the extra time biking requires. I can feel my endurance getting better already. I'm digging down deeper and am finding energy that I just didn't have even a couple weeks ago.

The times aren't exact, but my first few rides took me about 55 minutes. My rides today were about 45 minutes. I don't expect that kind of huge jump in improvement again, but such can be expected seeing that I went from being completely-out-of-shape to getting-in-to-shape.

No matter how fast I ride, I'm loving riding my bike to work. It's positive for me both physically and spiritually.