Monday, September 04, 2006

Food is good. China playing nice is even better.

One of the keys to development in the US, back in the 1900s was greed. Is that it? Greed? The westward expansion of the US acted like a saftey valve; if things got too populated, or too busy, or too conflicted in the ports, people could expand westward. The prospect of land, and natural resources (ahem) and gold made the Western Founders the risk-takers and entrepreneurs.

In China, it's not that easy. They have this big desert to contend with. Actually there has been serious neglect of the Chinese farmers, which, sounds inconceivable considering the importance of food, with such a massive population.

The density of population here in Canada makes the Chinese situation a little hard to imagine. 'Why would people live in the desert?' Here in Canada we tend to revolve around major metropolitan cities. The trend is clear. In China, you have masses of disconnected, uneducated people in the rural countryside. Finally the government's doing something about it. Admittedly, this is a great thing, and we'll watch how things shift over the coming years. Here in Canada, we must not take what we have for granted: education is paid by tax dollars, health care paid by tax dollars, and even the bare minumum needs are met by tax dollars (i'm referring to different iterations of the welfare system). The Chinese should be so lucky.

China has focused on developing its industries and cities in the past 20-plus years. Sluggish rural development provides a stark contrast to booming urban economy.

China set the goal of building new countryside last year, hoping to achieve balanced development in the country.

Todays announcement is not really about education, but incentive. The growth and expansion of the US in the gold rush was about greed and incentive--something sorely lacking under a totalitarian Communist government.

You can read more here about the land rights issue, which comes down to incentives. In economics we talk about internalizing the benefits and costs. The motivation comes from an internalized benefit, which in this case, is profit sharing. Good stuff.

In other news, 40% of Chinese don't speak Mandarin. Hmmm.. Did I read that correctly? I guess that speaks to the importance of Cantonese and other dialects; we've all heard (or experienced) the difficulty of learning to read and write Chinese. Remember that 40% number when someone questions China's 'developing country' status. It's not just about money, but GDP per Capita, Health Standards and Literacy Rates. Those three things are what make up the Human Development Index, and are richly interlinked (ie, increases in one assist the other two).

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