CHINA: After years of breakneck development, experts say China's new leaders face a greater challenge improving the lot of the huge rural population as the country's economic outlook darkens

Record ID: 265014

  • Title: CHINA: After years of breakneck development, experts say China's new leaders face a greater challenge improving the lot of the huge rural population as the country's economic outlook darkens
  • Date: 1st November 2012
  • Summary: HEIWO, MIYUN COUNTY, BEIJING MUNICIPALITY, CHINA (RECENT) (REUTERS) 79-YEAR-OLD FARMER TAI LIANQING CUTTING CORN STALKS TAI'S FACE AS HE CUTS TAI LOADING CORN STALKS ONTO CART TAI PUSHING CART AWAY TAI PUSHING CART TAI TAKING SEAT IN LIVING ROOM CHOPSTICKS PICKING UP MEAT FROM BOWL (SOUNDBITE) (Mandarin) 79-YEAR-OLD FARMER TAI LIANQING SAYING: "We can't compare with anybod
  • Embargoed: 16th November 2012 12:00
  • Keywords:
  • Location: China
  • Country: China
  • Topics: Business,Economy,Politics
  • Reuters ID: LVA6LPA0GE73WOYS8KOWG2MG3MAE
  • Story Text: Less than two hour's drive from the booming capital Beijing lies another China, where members of the country's 700-million-strong rural population still seek out much of their living from the soil.
    Seventy-nine-year-old Tai Lianqing's life in the tiny village of Heiwo in Beijing's Miyun county seems far removed from the gleaming skyscrapers that mark China's three decades of dramatic growth.
    He lives on a 200-yuan-a-month (32 U.S. Dollars) government stipend and the profits from the sale of his crops, which amounts to around 3000 yuan (480 U.S. dollars) a year -- a tiny fraction of the income of most urban residents.
    But he says life has improved in the last decade under current President Hu Jintao and Premier Wen Jiabao, who invested heavily in infrastructure and abolished agricultural taxes.
    "We can't compare with anybody else, but if we compare own situation now with that before, it is better, many times better. Of course we can't compare with big cities. For example, on income. Those people earn several thousand yuan a month, but we only earn two or three thousand yuan (320 to 480 U.S. dollars) a year. The difference is huge," he said.
    Hu and Wen have presided over almost a decade of breakneck growth which has seen China's economy roughly triple in size since 2002.
    China is now the world's second largest economy, and boasts over half a million millionaires.
    But with China expecting its lowest annual GDP growth in 15 years this year, the new generation of leaders to be ushered in during a Communist Party Congress starting November 8th likely face a much harsher economic reality than their predecessors.
    Providing jobs for an estimated 158 million rural migrant workers and improving poor social services is likely to be harder than it was a decade ago, experts say.
    In Yiwu, a once-booming manufacturing and trading centre in China's eastern Zhejiang province, the country's economic slowdown is felt keenly.
    Wu Zongjun, whose company Yiwu Lianfa Knitwear Factory Co.Ltd which makes garments both for export and the domestic market, says orders are down around 30 percent on this time last year.
    He once employed 200 people, but has since laid off almost half of them as orders decreased both at home and abroad.
    "I feel the situation this year is more serious than during the financial crisis. Why? Because then financial pressure was mainly because orders from abroad decreased, and we relied almost entirely on domestic sales, so the influence wasn't that great. Now, we still do some exports, but overall orders have definitely decreased," he said.
    Worker demands of higher wages and rising costs in the world's factory are already encouraging some manufacturers to look elsewhere.
    At an employment fair in Yiwu, migrant workers said it was hard to find jobs that paid well enough to support families as prices rose.
    Fourty-seven-year-old Liang Hongbin was considering returning to his home in China's central Hunan province.
    "People like us now want at least around 5,000 yuan a month. If we don't get around 5,000 yuan a month, each family still has children who need to eat, then there is the rent to pay. And at the moment commodity prices in Yiwu are increasing, everything is getting more expensive," he said.
    Mao Yushi, a liberal economist, said economic woes spelt trouble for a leadership that has based much of its legitimacy on improving livelihoods.
    "If the rate of economic growth falls -- and I believe this is highly likely -- then unemployment and income problems amongst the common people, combined the government's abuse of power and other issues, will create problems," he said.
    Mao and some others feel that Hu and Wen missed an opportunity to roll out the political and economic reforms needed to avoid a crisis as the country's economy slows and potential for discontent grows.
    They say that is a younger generation of leaders fails to grasp that opportunity, they may have a rocky ride.
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