The Chinese Academy of Social Sciences (CASS) recently published a research report titled 2005: Analysis and Prediction of Social Trends. The report anticipates new or changing trends and areas of concern in China in the coming year.
The seven trends are:
- The Chinese economy will continue to grow rapidly.
- With the expiration of the transition period following WTO accession imminent, protected industries will be forced to reform.
- Urbanization of rural residents will accelerate.
- The population will continue to age and the impact of the trend on society will become more apparent.
- Tense labor relations will create an artificial shortage of general labor.
- Children's education expenses will drastically change families' consumption patterns.
- Generation gaps will widen.
Dr. Li Peilin, the leading author of the report, said on December 28 that several of the trends, such as rapid economic growth, accelerating urbanization and aging, have been around for some time. Others will just be coming to the fore in 2005.
In the coming year, said Dr. Li, the labor shortage and education costs will the most pressing issues that China confronts.
Artificial general labor shortage to make bargaining possible. In the past year, Guangdong, Fujian and Zhejiang provinces have seen growing signs of labor shortages, with the Pearl River Delta alone short two million workers. Dr. Li said that the apparent shortage of general labor is actually caused by labor relations conflicts. Low salaries for migrant workers and rising farming incomes have created the situation.
Mo Rong of the Institute of Labor Studies agrees that the unattractive salaries, together with bad working conditions, are main reason for the shortage of laborers. Monthly pay in the Pearl River Delta has risen an average of only 68 yuan (US$8) in the past 12 years. While paychecks at many enterprises in Foshan, Guangdong Province, reached 600 to 1,000 yuan (US$72 to 121) per month ten years ago, they have not moved since.
Irregularities and infringement on labor rights, poor or unsafe work environments, long hours, lack of labor contracts and social security insurance, and random deductions or payments of salary in arrears are also having an impact.
"Although there is a shortage of migrant workers in some regions, the general supply-exceeding-demand situation basically hasn't changed. But the shortage of migrant workers will have an impact on the labor market, enabling migrant workers to bargain," said Mo.
Educational expenses rank No. 1. For several years, education costs for children have been the largest single expenditure for urban and rural families, surpassing retirement savings and housing. "This is not a normal phenomenon," Dr. Li pointed out.
Education and entertainment expenses have accounted for a growing proportion of consumer spending in recent years in both town and country, with education seeing the greatest increase. In fact, the continued rise in schooling costs has affected overall consumption by households.
Zhu Qingfang of the CASS Sociology Institute pointed out, "The very low contribution toward education costs by the state has caused the phenomenon of random charges. In the past ten years, random charges for education reached 200 billion yuan (US$24 billion). Tuition for a college student has increased from 200 yuan (US$24) in 1989 to 10,000 yuan (US$1,208) -- a factor of 50 -- which is really an unbearably heavy burden for urban and rural residents."
Parents may find themselves required to pay sponsor fees, school and class selection fees, tuition and living expenses from kindergarten until college. Many families have been forced to scale back other spending and increase savings to cover these costs.
End of WTO transition to hit banks, auto industry. China is currently entering its third peak in economic growth, following those of the mid-1980s and the early 1990s. But the country's three-year transitional period following WTO entry expires as 2004 ends, and so do protections of most domestic industries. Monopoly industries will face some tough challenges, with banks and auto sales taking the hardest hits.
Foreign banks have been jockeying for position at the starting gate and are poised to leap into the China market when it opens. Chinese banks are facing powerful competitors. But the Big Four state-owned banks still own nearly 2 trillion yuan (US$240 billion) in bad debt, accounting for nearly 20 percent of the total. The domestic banks, which have always depended on links with the government, may find themselves running a grueling solo race in the coming year.
The tariff on automobiles will drop from 34.2 percent in 2004 to 25 percent in 2006, which will lead to downward pressure on prices for domestic vehicles. As consumers wait for a better deal, inventories are likely to rise.
In October and November, the CASS report team conducted a survey on social trends from 2004 to 2005, soliciting opinions from more than 100 experts in the fields of sociology, economics and law.
In 2003, 24.8 percent of respondents felt that an overall social crisis would not occur in China within the next five to 10 years, while 11 percent thought such a crisis was possible. In 2004, only 20.2 percent of respondents believed a crisis would not occur, while 13.5 percent felt that it was possible.
Nevertheless, most respondents believe that society is stable: 91.2 percent see Chinese society as "comparatively stable," an increase of 11.5 percentage points from 2003, while only 7.7 percent feel that the situation is "not so stable," down 6.1 percentage points.
The SARS epidemic was a major contributor to concerns in 2003, as were frequent industrial and other major accidents.
Although a number of serious accidents occurred in autumn 2004, the experts polled felt that they did not endanger overall public order.
(China.org.cn by Wang Qian, December 31, 2004)
