Shades of grey in China’s widening income gap
The Straits Times, July 18

Summary:

• Grey income is also known as under-the-table takings and is a nebulous concept
• A product costs 100yuan ($20) but buyer requests to indicate cost as 120yuan on receipt. The extra money goes to the buyer himself, adding up to a few thousand dollars per contract
• Such takings have added up to 4.8 trillion yuan in 2005
• The sum made up 26% of GDP in 2005
• Existence of undeclared income of white-collar workers means that the income gap between the rich and poor could be much larger
• Top 10% of China’s household earn 55 times more than the bottom 10%
• 19m families (top 10%) found to have disposable income of 97000yuan
• These families are responsible for ¾ of they grey income
• Rapid economic growth has increased the overall incomes of China, but widen the gulf between the rich and poor as well.
• Five main sources of grey income:
  - Misused public works fund
  - Corruption among financial institutions
  - Extra fees levied on government administrative procedures
  - Profiteering on land sales
  - Disproportionate wage bill from the government monopolies
• In 2005, the state monopolies in telecommunications, finance, public utilities and several other industries employed less than 8% (8.33m) of the country’s workers but accounted for 55% of total wage bill
• Earned a total of 920bn yuan more
• Extra money paid for special bonuses and trips the public sector workers enjoy
• Social tension mounting over divide, therefore the structural problems must be fixed as soon as possible
• Beijing has put in effort in eliminating corrupt officials, with the execution of the former State Food and Drug Administration chief Zheng Xiaoyu for accepting bribes amounting to 6.5m yuan to approve substandard medicines
• Police has put up posters that cites this case, in a bid to deter wokers from pocketing irregular or grey income from questionable sources
• Supreme People’s Court issued a list of “new forms of corruption” practiced by officials
  - Illegally receiving stocks
  - Buying houses/cars at ludicrously low prices in exchange for favours

Opinion:

• Corruption is prevalent in China, virtually in every industry, even in the medical field, as an orthopaedic surgeon blatantly admitted "Patients proactively give me 500yuan or 1000 yuan before surgery. That way, they feel assured that we'll take better care of them."
• From this article, it can be seen that the widening income gap is not just attributed to globalisation as commonly perceived, but also due to the unscrupulous nature of some
• Widening income gap can bring about a whole series of problems such as
  - Discrimination
  - Increased social tension, social unrest
  - Increased crime rates
  - Poor get sucked deeper into the mire (difficult situation) and alleviating poverty further eludes them
• Despite the government’s efforts in minimising corruption, it would be impossible to totally eliminate corruption because there would always exist black sheep
• Moreover, Professor Zheng Yongnian, of the China Policy Institute at Nottingham University commented that "It's not enough to just kill the bad guys. When you don't have the right structurem there will always be bad guys."
• To add on, China is too big and has too large a population for the government to see to every aspect of the society to ensure that the laws are not breached

fiona! (:

22/06 Forever!
1:36 AM

WOULD YOU PAY $1 FOR A PLASTIC BAG?
(17 July 2007)

• HK government estimates that Hong Kongers throw away 8 billion plastic shopping bags a year -> more than 3 bags per person a day
• The call for the levying of taxes on plastic bags given out in supermarkets is an effort to reduce environmental pollution in HK
• HK$5 ($1) is levied on every plastic bag supermarkets and retail chain stores give out
• A year of trials run in the city’s supermarket shows promising results;

80 million fewer plastic bags were being handed out till date

• However, critics argue that the government is sending the message that the use of plastic bags is evil and for any other material, it is fine. It backs the stereotypical ideas, causing adverse effects on such an industry as it faces a shortage of new entrant workers. It also hinders efforts in employing technology to reduce the damage that plastic does to the environment
• Nevertheless, the foreseen problems faced by Hong Kongers (inconvenience) have not thwarted the hopes of environmental officials.
• Abuse of plastic bags in HK continues to be a huge threat to the environment

BAG BAN WORLDWIDE;

• California- law requires large grocery stores and pharmacies to sell reusable bags and recycle plastic bags that customers return
• Uganda- bans plastic bags this month to reduce the stinking piles of rubbish that litters dusty capital. Officials want Ugandans to use banana leaves instead, the traditional way to carry goods
• London- shows maybe be banned from giving plastic bags under new law. This month, officials proposed a ban on the bags, or the introduction of a 10pence (31cents) levy, to cut waste going into the landfill

Reflection

In my opinion, inconvenience is still one of the major factors that impede the efforts of environmental conservation. The phenomenon of global warming and its effects has grown in its depth of discussion over the years. As the situation becomes more real, most countries world over are taking their stance in preserving the earth.

I feel that the levying of taxes on plastic bags is a useful method in deterring the abuse of usage of plastic bags. This additional cost imposed to consumers hopefully enables them to feel the pinch and thus would switch to the more environmentally friendly approach of using reusable bags.

Singapore uses 2.5billion plastic bags each year, with 19million kg of used plastic bags constituting to the total waste.

The latest Bring Your Own Bag (BYOB) Day by the National Environmental Agency (NEA) was launched a week leading to Earth Day on 18 April 2007. To ensure that the scheme lives on, every subsequent first Wednesday of the month is BYOB day. Each plastic bag taken at the checkout counters comes with an additional charge of 10cents. Also, only selected supermarkets are practicing BYOB scheme.

I would say that the BYOB scheme does not have much impact on me and this may also apply to others who don’t visit the supermarkets often. Hence, the handing out of little plastic bags for small item still has to be endured. However, it is undeniable that these supermarkets encounter one of the largest use of plastic bags and effects of the new scheme may be considerable. I believe that the use of reusable bags is a habit that can be cultivated if wanted. It really depends on how willing an individual is to carry along the reusable bag with him/her when visiting the supermarkets. Will you?

Education is still relied upon as the most feasible method in our quest to conserve the environment. It took 20 years for Singaporeans to cultivate the habit of bagging rubbish automatically, (even though there are still quite a number who STILL do not practice that). But after 30 years of no littering campaign, they are still littering. So, what next?

-Mel (:

Labels: environment

22/06 Forever!
12:10 AM

BEWARE THE POPULATION ALARMISTS

For years, the UN Population Fund has been seeking to justify its existence by issuing reports claiming that we must reduce birth rates in poor countries in order to achieve “sustainable development”.
In reality, global living standards improved dramatically over the past century despite a near-quadrupling of human numbers.
The idea of ‘overcrowding’ conjure images of hungry children, unchecked disease, squalid living conditions – real in today’s world but the proper name for those conditions is ‘human poverty’.
Between 1900 and 2000, human numbers almost quadrupled, leaping from 1.6 billion to six billion. But global GDP per capita quintupled over this same period.
Food production has steadily outstripped population growth
Over the 20th century, average life expectancy doubled from around 30 years to more than 60 years and infant mortality rates declined around the world. – due to unprecedented and extraordinary improvements in material living standards
No need for governments to alter our patterns of reproduction. Moreover, a part from morally reprehensible coercive schemes such as China’s one child policy, it is not clear the government population policies cn do much to change human numbers anyway.
No causative link between availability of contraception and fertility levels. The rate of contraception use is identical in Jordon and Japan, but Jordon’s fertility rate is more than 3 times higher.
In 1974, mexico started a national family planning programme. Brazil had never implemented such a programme but during the following 25 years, Mexican and Brazilian fertiliy levels fell at nearly identical rates.
Truth is that parental preference is the key determinant of family size, be it in rich or poor countries.
Parents around the world have been opting for fewer children since the 1960s
The poor need economic freedom so that they may raise themselves up, not sterile UN schemes.

Review:
Reports of poverty-related conditions in Africa and other developing countries have become periodic features in many of the world’s news, so much so that we’ve almost become nonchalant upon seeing images of starving children. Around a century ago, living conditions in LDCs around the world are generally comparable. Today, countries in Africa lag far behind in terms of development with nearly 70% of the continents population living with below US $2 a day. What has happened over the past 100 years that caused such a huge disparity in growth?

It is definitely more than just a problem of high birth rates that leads to poverty. No doubt the large population will put pressure on and exacerbate existing problems in the country but to put the blame entirely on overpopulation is simply overlooking other significant factors that the United Nations is obviously keen to avoid.

I believe that the cycle of poverty in which many African countries are trapped in has a lot to do with the flaws and inequalities of the world trading system. Many felt they were being pressurized into unfair agreements by the economic strength of the richer countries, in particular the USA and the EU. These unfair agreements usually have detrimental impacts on their economy.

Trade has the potential to be extremely beneficial in terms of lifting countries out of povery. It has been estimated that in Africa, a 1% increase in exports would generate US $70 million, about five times the amount Africa receives in aid. This export production can also concentrate income directly in the hands of the poor as opposed to aid channels. However, Africa’s share of world trade has fallen considerably from around 4% in 1980 to less than 1.5% by 1997.

Reducing birth rates in this case then, will not solve the problem of poverty if this issue of unfair trade is not addressed. Unfortunately, this problem will prove hard to solve due to reluctance of rich countries to change their policies that may adversely affect their own economy. With the high dependence of poor nations on aid from these rich nations, it makes it hard for them not to simply agree with the conditions imposed on them. Perhaps the first step UN can take to help in the fight against poverty is to give every country an equal voice, instead of letting rich countries dominate and then point its fingers at birth rates in poor nations.

royce

22/06 Forever!
1:24 AM

Small loans to help the little people have beentaking off in Asia as a way to help tackle poverty in the region.
Microfinancing began when Bangladeshi economist, Muhammad Yunus started an experiment in 1974, during a famine in his home country, to give the poor small loans.
That proved immensely succesful. He managed to change the lives of more than 6.61 million people through the Grameen Bank that he founded in 1983.
Banking and financial institutions have been widening their reach to add social dimension to their regular businesses as a way to tap into the untapped cashflow and contribute to reducing income inequality.
In China: (where millions live in rural areas under poor living conditions)
- a local government initiative, the Hu Du Bi Project, allows farmers to withdraw money from their social insurance accounts as loans for investments in agriculture.
In India: (close to a quarter of people live below poverty line)
- the livelihoods of more than a million rural poor households has been supported through microcredit, savings and insurance services
The problem:
when poor people save, sometimes they have a goal, and sometimes not. It depends on whether they view it as risk management or are thinking of the savings in terms of a lump sum.
Bangladesh has been working to introduce the poor to simple banking services. This can also be applied to more affluent country like Singapore as it need to consider financial inclusion of all sections of society.

Reflections

It is evident that globalisation has tremendously widen the income gap between the rich and the poor, over the past years. The income of the richest 20 per cent in the world is 140 times the income of the poorest 20 per cent in the world today. A decade ago, the income of the richest 20 per cent used to be 70 times of that of the poor. In order to reduce this income disparities, it is important that the poor get help from the government as well as NGOs. Hence, i feel that these governments in poor countries has been on the right path of implementing policies such as microfinancing to improve the standard of livings of the poor.
The implementation of such schemes has proven to improve the lives and living standards of millions of poor.

However, macrofinancing is quite tricky as it has the potential of being a detriment to the poor as well. As discussed above, the problem lies on the mindset of the poors, whether they are saving for rainy days or for the pursuit of material goods. Moreover, like all loans and credits, it has risks involved. Without proper planning, savings can be depleted easily while loans can plummet. For example, bumper crops will incur heavy losses on these poor farmers. They will then use their savings to cover the losses. Worse still, some will borrow heavily from their social insurance. Without money to pay these loans, they will be burden by their heavy debts and this worsen their living conditions.

Hence, educating the poor in risk managements and financial planning is of utmost importance before encouraging them to join such financial schemes. Besides that, rules and regulations which will prevent farmers from incurring heavy debts should be implemented before giving them loans. Then again, rules and regulations make borrowing difficult.

Nonetheless, i agree with the implementation of microfinancing in poor countries as i believe it is one of the better ways to improve the living conditions in the rural areas. Microfinancing encourage the poor to manage their own finances and do their own businesses. This prevent them from being over-dependent on the government. It is a good policy as it helps the poor to get on their own feet and fight for their own living. Perhaps, NGOs may help by giving guidance and help the poors in their financial planning.

~Anita~

Labels: thinking aloud

22/06 Forever!
11:04 PM

BEIJING - Floods and landslides unleashed by heavy rains have killed at least 94 people and left 25 others missing in parts of southern and eastern China, state media reported Sunday.

-500,000 people had been evacuated in Jiangsu, Anhui, Henan, Hubei, Sichuan and Shaanxi provinces and the city of Chongqing.
-More than 49,000 houses had been destroyed and another 240,000 damaged as a result of torrential rains in the worst-hit Sichuan and Shaanxi provinces over the past week.

- Direct economic losses could surpass $500 million.
- Flooding is a perpetual problem in China, with floods this year killing more than 200 people, destroying 118,500 homes and affecting the lives of more than 42 million people, according to the national flood control office.

- At the same time, droughts in the north of the country have left at least 7.4 million people short of drinking water.

My thoughts...

From the above article, it can be seen that natural disasters (in this case, floods) are potential threats for the human population and the surroundings, and what concerns us is that Mother Nature's doings can lead to drastic consequences, disrupting the normal lives of people and taking away innocent lives. As a result, people in disaster-prone regions often live in fear. One will never know what may happen next, since all these are unpredictable.

Looking back through China’s history, taming the waters of the country’s great rivers has been an issue of central concern to people’s lives. One need only look at the grim statistics of lives claimed by the waters to see why.

- In the 1930s, floods throughout huge tracts of China killed more than 400,000 people.

- Tens of thousands died in the 1950s, while the large-scale flood disaster in 1998 killed more than 40 000 people.

Chinese leaders today continue to battle with the problem.

Hence, large-scale projects like the construction of the Three Gorges Dam to control Yangtze River’s floods (to be completed in 2009) as well as the channeling of water from this river northwards to the Yellow River are hoped to reduce the effects of flooding in China.

Ironically, while half of China is being “fed” with excessive waters, the northern part of China is facing severe drought. If only there was a machine that could distribute water evenly throughout China…

It is indeed funny how climate changes globally and affects us, vulnerable humans. As mentioned earlier, it is impossible to predict the next strike from the angry rivers, though there seems to be a recurring pattern.

Therefore, we should realize how lucky we are to live in a country where cries of floods and earthquakes are rare.

Learn to cherish the people and things around us as life is indeed precious.

Most importantly, learn to love our environment.

"Let every individual and institution now think and act as a responsible trustee of Earth, seeking choices in ecology, economics and ethics that will provide a sustainable future, eliminate pollution, poverty and violence, awaken the wonder of life and foster peaceful progress in the human adventure."
— John McConnell, founder of International Earth Day

Done by: Guo Ping

22/06 Forever!
4:45 PM

Singapore in a golden period, says MM Lee

- Investors from developed countries are pouring money into the region and Singapore is enjoying good economic growth and social development.

- Foreign direct investments in Singapore have maintained at about S$6 billion to S$7 billion, whereas in China and India, they are US$70 billion and US$10 billion a year respectively.

- The key is a having a good government which will get its policies right, to encourage economic growth.

- Singapore's economic growth this year will be around 5 to 6 per cent, which is quite decent for a maturing economy, said MM Lee.

- Singapore was able to push ahead when China and India adopted wrong economic policies and She is still ahead although they have recovered.

- Some 9.7 million visitors came here last year; unemployment is at a low 2.9 per cent and 49,000 jobs were created between January and March.

- More importantly, MM Lee said, the government has revised its vision on Singapore – to turn it into a city with a lively night life, a more liberal arts and entertainment scene, the building of the two integrated resorts and the introduction of Formula 1 racing here next year.

My views:
Singapore is indeed on her way to becoming a developed nation. She is in the transition stage of a developing to a developed country given the current indicators of urbanisation. China and India, on the other hand, are still in the developing stage.

The main reasons for the rapid economic growth of Singapore would include good governance, improved social and health infrastructure, better education system, a rise in the number of entrepreneurs as well as her human resource.

Singapore's economy did not crumble when the 1997 Asian financial crisis occurred. It is likely to be the same in the future in case of a economy breakdown as we are well prepared, as MM Lee described in his message.

In 1999, Singapore has a 92% adult literacy rate and 163 doctors per 100,000 people. Compared to India which has a 57% adult literacy rate and 48 doctors per 100,000 people, Singapore has certainly attained a higher growth status, and is ever improving.

Even though Singapore was predicted to face the water crisis in the past, we manage to sustain our resources and even manage to produce our own supply of water. Water is essential for a human's survival and indirectly affects the economic growth of a nation. An example of a successful entrepreneur who contributed in this aspect is Olivia Lum, who is the founder of the Hyflux company. NEWater is now incorporated into our daily use, and is expected to be the long term solution of Singapore's limited water supply. Even the Public Utilities Board is embarking on their project (Active, Beautiful, Clean Water project) which aims to make Singapore a water hub.

But of course, ultimately Singapore still depends on her human resource as the main form of resource contributing to economic growth. What we do directly or indirectly affects Singapore's economy.

- Alvin

22/06 Forever!
1:22 PM

Testing testing 1 2 3..

- Alvin

22/06 Forever!
11:53 AM