China’s government is planning its next intervention. With the law on the “promotion of family education”, Beijing’s intervention this time reaches far into private life: the upbringing of its own children. This new law aims to teach China’s youth morals, intellectual development, and social skills, according to official sources. Ning Wang took a closer look at these seemingly noble plans and found that in reality, the government is putting thumbscrews on parents.
Hong Kong has been in the headlines for weeks. Our correspondents also cover the former crown colony, albeit on a topic that is not related to human rights and democracy. It’s about what may be the most ambitious plan to date to solve the chronic housing shortage in the special administrative region. Over an area of about a third of Hong Kong, housing is to be provided for up to 1.5 million people over the coming years. But the plan also extends over the mainland to Shenzhen to further the development of the so-called Greater Bay Area.
Lastly, I would like to recommend today’s guest opinion by Yu Yongding. The renowned Chinese economist takes the ongoing power shortage and the crisis surrounding the real estate developer Evergrande as an opportunity to look at the current state of the Chinese economy. His conclusion: China’s policymakers must act now to restore much-needed growth.
I hope you enjoy today’s issue!
Beijing continues to tweak its idea of the perfect Chinese family: A new law aims to improve education in families while protecting children from too much school stress. Not all details of the law have been published yet. However, media reports indicate that the proposed guidelines are intended to encourage parents to promote morals, intellectual development, and social skills of their offspring.
From now on, for example, it is part of child protection in China that parents make sure that their children take enough breaks while studying and do enough sports. However, this does not lift pressure off legal guardians, rather the opposite – because mothers and fathers are soon to be held responsible for the “bad behavior” of their children. This is what the draft law on the “promotion of family education” says.
Officials are convinced, that the fact that young people do not behave in a socially acceptable manner is first and foremost due to the wrong upbringing by their parents: “There are many reasons for the bad behavior of young people, and the lack of proper family upbringing is the main reason,” Zang Tiewei, spokesman for the Legislative Affairs Office of the National People’s Congress (NPC), said last week. Parents are expected to teach their children how to “respect the elderly and take care of the young.”
This was once an integral part of Chinese education: Anthropologist David Y. H. Wu concluded in an early 1990s survey of Shanghai families, that parents ranked “obedience” as the top parenting practice. Wu, who teaches at the Australian National University, attributed this to the fact that parents feared raising a generation of “spoiled” only children. Wu also believes that the influence of Chinese culture played a significant role. The rule was: Only an obedient child is a good child.
But that was a long time ago. What used to be taken for granted no longer seems to work for China’s youth. For years, children have been coddled into “little emperors” due to China’s one-child policy. They are allowed to do whatever they please, everything is made possible for them – and they don’t have to abide by any rules.
Only since 2016 are two children per family allowed. In May of this year, Beijing even raised the limit to three children after a census had shown that China’s birth rate had declined to a historic low (China.Table reported). State media celebrated the news, but the city populace remained more skeptical on social media. Under the hashtag #三孩生育政策来了(The three-child policy is here), users on Weibo complained that the government’s family planning was disconnected from the everyday lives of the people.
But of late there have been other concerns. Obedience may make a “good child,” but it does not necessarily promise success in life. Many families may secretly regret having raised reckless tyrants – but more often than not, the hopes of families to rise socially or economically rest on the shoulders of their offspring. Only when all financial resources are poured into the education of their children, there is a chance of getting a good job or at least a better-paying one. The educational career of the children goes through a ladder of great obstacles. In China, admission to an elite university is only granted to those who achieve a high mark on the Gaokao exam for school graduation. This requires long hours of studying – and demands great sacrifices from children and teens (China.Table reported).
This has given rise to a generation that has little regard for the morals and values required for the “intellectual development” and “social habits” that are now being called for. For China’s new generation, nothing is more important than accomplishment. Instead of respectful treatment of fellow human beings, empathy, or social behavior, grades are the only thing that counts.
“It’s a sick society we live in, and our children are growing up in it,” says Ms. Sun, a Beijing resident, whose daughter enrolled in school last fall. She says that Teachers have no regard for individual development. A student with bad grades drags down the class average – and makes the school look bad to local education authorities.
Many young people learned early on that they don’t have to take old or young into consideration. They are judged solely on whether they can survive under the growing pressure of a meritocracy. The goal is to always be among the best: the best in school, in university, and the best in career. With it comes success, fame, and recognition. “It’s the only form of approval that matters,” Ms. Sun says in conversation on WeChat.
The fact that Beijing is now waking up and also wants to crack down on children’s education is not only late. It also shows how little room there is for imagination and new methods. It also reveals how great the desperation must be in the face of the looming social drama: The government is now applying thumbscrews.
But how are parents, who themselves have not been taught any values and morals, supposed to teach their children that winning at all costs is not desirable in a society, that up until recently held it as the highest priority?
And what may at first appear as an act of desperation by a state without any strategy, takes on a completely different tone when one takes a closer look at the law on family education promotion: For parents are to teach their children to “love the party, the nation, the people and socialism”.
The law is only the latest act in a whole series of interventions with which the state, in its view, wants to halt the apparent cultural and political downfall of its young.
Only a few weeks ago, the authorities had decided how many hours children are allowed to play video games – and restricted gaming time to three hours per week. The gaming industry, the entertainment industry, and fan culture are accused by Beijing of being “poison for the nerves”. Video games are seen as the cause of a number of social ills, distracting young people from school and family responsibilities, according to authorities (China.Table reported).
Ms. Sun tells of a neighborhood boy whose parents are so helpless that they sometimes have to call the “Bao An”, the local police, for help in disputes. The boy is twelve, his parents both work.
The approach is strongly reminiscent of the social credit system, which also relies primarily on punishment (China.Table reported): Those who do not sort their trash or do not pay their bills on time receive a lower score. Those who end up with a too low score are subject to sanctions. These can lead to restrictions on freedom of movement or access to health and welfare benefits. One of the first actions under the social credit system was to make the names of delinquents public. This is because social pressure proves most effective. People are exposed to their immediate environment.
This approach is now also being applied to the new law on “promoting family education”: For parents whose children do not behave the way the state wants, the biggest punishment is not the fine of 1,000 yuan, but that the workplace (Danwei) will also be informed. This is intended to make social pressure unbearable.
The reactions to the new law on social media site Weibo were mixed: On the one hand, some parents are happy that the state wants to help them raise their children. On the other hand, many wonder whether local authorities, of all people, who are responsible for implementation, are up to a task that overwhelms so many parents. This seems out of touch with reality and indiscriminate.
China is having an eventful month, marked by proliferating power-supply disruptions and the debt crisis of the country’s second-largest property developer, Evergrande. What does this mean for China’s post-pandemic economic recovery and growth prospects?
Begin with the energy crisis, which started when a rapid increase in exports – driven by the global recovery – fueled a sharp increase in demand for electricity. China remains dependent on coal for 56.8% of its total electricity supply. And yet, in an effort to meet mandatory targets for reducing energy consumption, local governments have shut down many coal mines in recent years.
At the same time, the government’s climate goals – to reach peak carbon-dioxide emissions by 2030 and achieve carbon neutrality before 2060 – discourage investment in the coal industry. Of course, these goals also encourage investment in renewables, which are a growing part of China’s energy mix. But renewables are nowhere near where they need to be to cover the current shortfall.
As a result, when energy demand surged, so did coal prices. But, because China’s government regulates electricity prices, energy providers – most of which are state-owned enterprises – could not pass the costs onto customers. To limit the losses, they cut electricity supplies, thereby forcing some manufacturers to curtail production.
Not surprisingly, the government sprang into action. It ordered a rapid expansion of some coal mines, and the reopening of others. It gave utility companies more leeway in setting electricity prices. And it pushed manufacturers to boost energy efficiency and accelerate investment in renewable energy.
China will quickly overcome the power shortages, which already are becoming less acute. But developing a more resilient, sustainable energy sector will take time. And if each step of the development is not carefully planned and implemented, this transition could weigh on economic growth.
The Evergrande crisis, too, poses serious risks to growth. Over the years, owing to defective corporate governance, the developer expanded at a frantic pace, not only through its real-estate investments, but also by diversifying into the electric-vehicle industry. To fund its activities, it borrowed heavily from both commercial banks and capital markets, including issuing dollar bonds to foreign investors. Ultimately, it racked up some CN¥800 billion ($124 billion) in debt
Though Evergrande has more than CN¥1.85 trillion in assets, it has not been able to sell them fast enough. Last month, when the company admitted that it is unlikely to be able to service its debts, rumors of an impending collapse – and a potential Chinese financial crisis – began to swirl.
Yet fears seem largely to be overblown. To be sure, it would be unwise to predict Evergrande’s fate at this point. But it is probably safe to assume that the debacle does not pose a systemic threat to China’s financial sector.
Pundits have been predicting since 2012 that a housing-market collapse would trigger a financial crisis in China. But in Evergrande’s case, the problem is liquidity, not solvency, and any spillover effects can be contained, not least because, despite its issues, China’s banking system is basically healthy. Real-estate developers and home buyers account for only about 30% of total bank loans, and that share is falling. The share of new loans that are real estate-related is also on the decline, having dropped from 45% in 2016 to less than 24% in September 2020.
Moreover, in China, there are no subprime loans, and virtually no securitized mortgage loans. More importantly, there are very few cases of delinquency, let alone mortgage defaults by households: most Chinese commercial banks’ non-performing loan ratio is less than 2%. Even if there were a major financial event, the Chinese government has enough instruments to deal with it.
So, like China’s energy crisis, the Evergrande debacle does not pose an imminent systemic risk. But that does not mean policymakers should be complacent. The real-estate sector is a pillar of the Chinese economy, and an important link in the production chain. And Evergrande’s collapse would severely disrupt it – not least because a few other large real-estate developers might follow in Evergrande’s footsteps. Some non-bank financial institutions would also be in trouble. And, of course, Evergrande’s suppliers would suffer enormously. All of this would worsen China’s economic prospects.
To prepare for what may come, financial-system vulnerabilities, especially the corporate sector’s high leverage ratio, must be addressed. But the first priority must be to end the persistent growth slowdown, which began in 2010. This trend is at least as worrying as the short-term structural problems that have grabbed headlines lately. China’s experience over the past 40 years shows that without decent growth, financial stability is difficult to achieve.
This pattern is borne out by recently released official statistics indicating that China’s annual growth rate was a lower-than-expected 4.9% in the third quarter of this year, and it is widely feared that the growth rate in the fourth quarter may be even lower. To counter that possibility, Chinese policymakers need to pursue bolder fiscal and monetary expansion, alongside structural reform and adjustment.
Yu Yongding, a former president of the China Society of World Economics and director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, served on the Monetary Policy Committee of the People’s Bank of China from 2004 to 2006.
Copyright: Project Syndicate, 2021.
www.project-syndicate.org
Employees of the Chinese railways enjoy a very special treat: They are allowed to get married at the station. So have these 64 couples, some of whom are employees who are currently upgrading the high-speed train line around Nanning in southern China. In addition to the “yes” word and the ring, there is even a certificate from the employer. The only thing China Railway does not want to guarantee so far is the duration of the marriages.
China’s government is planning its next intervention. With the law on the “promotion of family education”, Beijing’s intervention this time reaches far into private life: the upbringing of its own children. This new law aims to teach China’s youth morals, intellectual development, and social skills, according to official sources. Ning Wang took a closer look at these seemingly noble plans and found that in reality, the government is putting thumbscrews on parents.
Hong Kong has been in the headlines for weeks. Our correspondents also cover the former crown colony, albeit on a topic that is not related to human rights and democracy. It’s about what may be the most ambitious plan to date to solve the chronic housing shortage in the special administrative region. Over an area of about a third of Hong Kong, housing is to be provided for up to 1.5 million people over the coming years. But the plan also extends over the mainland to Shenzhen to further the development of the so-called Greater Bay Area.
Lastly, I would like to recommend today’s guest opinion by Yu Yongding. The renowned Chinese economist takes the ongoing power shortage and the crisis surrounding the real estate developer Evergrande as an opportunity to look at the current state of the Chinese economy. His conclusion: China’s policymakers must act now to restore much-needed growth.
I hope you enjoy today’s issue!
Beijing continues to tweak its idea of the perfect Chinese family: A new law aims to improve education in families while protecting children from too much school stress. Not all details of the law have been published yet. However, media reports indicate that the proposed guidelines are intended to encourage parents to promote morals, intellectual development, and social skills of their offspring.
From now on, for example, it is part of child protection in China that parents make sure that their children take enough breaks while studying and do enough sports. However, this does not lift pressure off legal guardians, rather the opposite – because mothers and fathers are soon to be held responsible for the “bad behavior” of their children. This is what the draft law on the “promotion of family education” says.
Officials are convinced, that the fact that young people do not behave in a socially acceptable manner is first and foremost due to the wrong upbringing by their parents: “There are many reasons for the bad behavior of young people, and the lack of proper family upbringing is the main reason,” Zang Tiewei, spokesman for the Legislative Affairs Office of the National People’s Congress (NPC), said last week. Parents are expected to teach their children how to “respect the elderly and take care of the young.”
This was once an integral part of Chinese education: Anthropologist David Y. H. Wu concluded in an early 1990s survey of Shanghai families, that parents ranked “obedience” as the top parenting practice. Wu, who teaches at the Australian National University, attributed this to the fact that parents feared raising a generation of “spoiled” only children. Wu also believes that the influence of Chinese culture played a significant role. The rule was: Only an obedient child is a good child.
But that was a long time ago. What used to be taken for granted no longer seems to work for China’s youth. For years, children have been coddled into “little emperors” due to China’s one-child policy. They are allowed to do whatever they please, everything is made possible for them – and they don’t have to abide by any rules.
Only since 2016 are two children per family allowed. In May of this year, Beijing even raised the limit to three children after a census had shown that China’s birth rate had declined to a historic low (China.Table reported). State media celebrated the news, but the city populace remained more skeptical on social media. Under the hashtag #三孩生育政策来了(The three-child policy is here), users on Weibo complained that the government’s family planning was disconnected from the everyday lives of the people.
But of late there have been other concerns. Obedience may make a “good child,” but it does not necessarily promise success in life. Many families may secretly regret having raised reckless tyrants – but more often than not, the hopes of families to rise socially or economically rest on the shoulders of their offspring. Only when all financial resources are poured into the education of their children, there is a chance of getting a good job or at least a better-paying one. The educational career of the children goes through a ladder of great obstacles. In China, admission to an elite university is only granted to those who achieve a high mark on the Gaokao exam for school graduation. This requires long hours of studying – and demands great sacrifices from children and teens (China.Table reported).
This has given rise to a generation that has little regard for the morals and values required for the “intellectual development” and “social habits” that are now being called for. For China’s new generation, nothing is more important than accomplishment. Instead of respectful treatment of fellow human beings, empathy, or social behavior, grades are the only thing that counts.
“It’s a sick society we live in, and our children are growing up in it,” says Ms. Sun, a Beijing resident, whose daughter enrolled in school last fall. She says that Teachers have no regard for individual development. A student with bad grades drags down the class average – and makes the school look bad to local education authorities.
Many young people learned early on that they don’t have to take old or young into consideration. They are judged solely on whether they can survive under the growing pressure of a meritocracy. The goal is to always be among the best: the best in school, in university, and the best in career. With it comes success, fame, and recognition. “It’s the only form of approval that matters,” Ms. Sun says in conversation on WeChat.
The fact that Beijing is now waking up and also wants to crack down on children’s education is not only late. It also shows how little room there is for imagination and new methods. It also reveals how great the desperation must be in the face of the looming social drama: The government is now applying thumbscrews.
But how are parents, who themselves have not been taught any values and morals, supposed to teach their children that winning at all costs is not desirable in a society, that up until recently held it as the highest priority?
And what may at first appear as an act of desperation by a state without any strategy, takes on a completely different tone when one takes a closer look at the law on family education promotion: For parents are to teach their children to “love the party, the nation, the people and socialism”.
The law is only the latest act in a whole series of interventions with which the state, in its view, wants to halt the apparent cultural and political downfall of its young.
Only a few weeks ago, the authorities had decided how many hours children are allowed to play video games – and restricted gaming time to three hours per week. The gaming industry, the entertainment industry, and fan culture are accused by Beijing of being “poison for the nerves”. Video games are seen as the cause of a number of social ills, distracting young people from school and family responsibilities, according to authorities (China.Table reported).
Ms. Sun tells of a neighborhood boy whose parents are so helpless that they sometimes have to call the “Bao An”, the local police, for help in disputes. The boy is twelve, his parents both work.
The approach is strongly reminiscent of the social credit system, which also relies primarily on punishment (China.Table reported): Those who do not sort their trash or do not pay their bills on time receive a lower score. Those who end up with a too low score are subject to sanctions. These can lead to restrictions on freedom of movement or access to health and welfare benefits. One of the first actions under the social credit system was to make the names of delinquents public. This is because social pressure proves most effective. People are exposed to their immediate environment.
This approach is now also being applied to the new law on “promoting family education”: For parents whose children do not behave the way the state wants, the biggest punishment is not the fine of 1,000 yuan, but that the workplace (Danwei) will also be informed. This is intended to make social pressure unbearable.
The reactions to the new law on social media site Weibo were mixed: On the one hand, some parents are happy that the state wants to help them raise their children. On the other hand, many wonder whether local authorities, of all people, who are responsible for implementation, are up to a task that overwhelms so many parents. This seems out of touch with reality and indiscriminate.
China is having an eventful month, marked by proliferating power-supply disruptions and the debt crisis of the country’s second-largest property developer, Evergrande. What does this mean for China’s post-pandemic economic recovery and growth prospects?
Begin with the energy crisis, which started when a rapid increase in exports – driven by the global recovery – fueled a sharp increase in demand for electricity. China remains dependent on coal for 56.8% of its total electricity supply. And yet, in an effort to meet mandatory targets for reducing energy consumption, local governments have shut down many coal mines in recent years.
At the same time, the government’s climate goals – to reach peak carbon-dioxide emissions by 2030 and achieve carbon neutrality before 2060 – discourage investment in the coal industry. Of course, these goals also encourage investment in renewables, which are a growing part of China’s energy mix. But renewables are nowhere near where they need to be to cover the current shortfall.
As a result, when energy demand surged, so did coal prices. But, because China’s government regulates electricity prices, energy providers – most of which are state-owned enterprises – could not pass the costs onto customers. To limit the losses, they cut electricity supplies, thereby forcing some manufacturers to curtail production.
Not surprisingly, the government sprang into action. It ordered a rapid expansion of some coal mines, and the reopening of others. It gave utility companies more leeway in setting electricity prices. And it pushed manufacturers to boost energy efficiency and accelerate investment in renewable energy.
China will quickly overcome the power shortages, which already are becoming less acute. But developing a more resilient, sustainable energy sector will take time. And if each step of the development is not carefully planned and implemented, this transition could weigh on economic growth.
The Evergrande crisis, too, poses serious risks to growth. Over the years, owing to defective corporate governance, the developer expanded at a frantic pace, not only through its real-estate investments, but also by diversifying into the electric-vehicle industry. To fund its activities, it borrowed heavily from both commercial banks and capital markets, including issuing dollar bonds to foreign investors. Ultimately, it racked up some CN¥800 billion ($124 billion) in debt
Though Evergrande has more than CN¥1.85 trillion in assets, it has not been able to sell them fast enough. Last month, when the company admitted that it is unlikely to be able to service its debts, rumors of an impending collapse – and a potential Chinese financial crisis – began to swirl.
Yet fears seem largely to be overblown. To be sure, it would be unwise to predict Evergrande’s fate at this point. But it is probably safe to assume that the debacle does not pose a systemic threat to China’s financial sector.
Pundits have been predicting since 2012 that a housing-market collapse would trigger a financial crisis in China. But in Evergrande’s case, the problem is liquidity, not solvency, and any spillover effects can be contained, not least because, despite its issues, China’s banking system is basically healthy. Real-estate developers and home buyers account for only about 30% of total bank loans, and that share is falling. The share of new loans that are real estate-related is also on the decline, having dropped from 45% in 2016 to less than 24% in September 2020.
Moreover, in China, there are no subprime loans, and virtually no securitized mortgage loans. More importantly, there are very few cases of delinquency, let alone mortgage defaults by households: most Chinese commercial banks’ non-performing loan ratio is less than 2%. Even if there were a major financial event, the Chinese government has enough instruments to deal with it.
So, like China’s energy crisis, the Evergrande debacle does not pose an imminent systemic risk. But that does not mean policymakers should be complacent. The real-estate sector is a pillar of the Chinese economy, and an important link in the production chain. And Evergrande’s collapse would severely disrupt it – not least because a few other large real-estate developers might follow in Evergrande’s footsteps. Some non-bank financial institutions would also be in trouble. And, of course, Evergrande’s suppliers would suffer enormously. All of this would worsen China’s economic prospects.
To prepare for what may come, financial-system vulnerabilities, especially the corporate sector’s high leverage ratio, must be addressed. But the first priority must be to end the persistent growth slowdown, which began in 2010. This trend is at least as worrying as the short-term structural problems that have grabbed headlines lately. China’s experience over the past 40 years shows that without decent growth, financial stability is difficult to achieve.
This pattern is borne out by recently released official statistics indicating that China’s annual growth rate was a lower-than-expected 4.9% in the third quarter of this year, and it is widely feared that the growth rate in the fourth quarter may be even lower. To counter that possibility, Chinese policymakers need to pursue bolder fiscal and monetary expansion, alongside structural reform and adjustment.
Yu Yongding, a former president of the China Society of World Economics and director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, served on the Monetary Policy Committee of the People’s Bank of China from 2004 to 2006.
Copyright: Project Syndicate, 2021.
www.project-syndicate.org
Employees of the Chinese railways enjoy a very special treat: They are allowed to get married at the station. So have these 64 couples, some of whom are employees who are currently upgrading the high-speed train line around Nanning in southern China. In addition to the “yes” word and the ring, there is even a certificate from the employer. The only thing China Railway does not want to guarantee so far is the duration of the marriages.
