Wei Jingsheng Foundation News and Article Release Issue Number: A207-W102



Release Date: May 21, 2006



Topic: The Dark Side of China's Economic Development to the World - Economically, Security and Ecology (by Ciping Huang, original article in German was published on May 9, 2006, at Handelsblatt, the biggest business newspaper in Germany)

标题:中国经济的黑暗面,及其对国际安全与世界生态的影响 -- 黄慈萍(本文原文为德文,2006年5月9日发表于德国最大的商界报纸Handelsblatt上)


Original Language Version: English (Chinese version at the end)



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The Dark Side of China's Economic Development to the World

- Economically, Security and Ecology

By Ciping HUANG



The economic reforms in China over the last two decades have heralded a new era of changes and development, stemming in no small part from the input of capital from the West. Low labor costs, few regulations and inexpensive natural resources were stimuli for the rapid growth, and increasing imbalance (belied by the persistently rosy macroeconomic data), of its manufacturing sector. Chinese made products have flooded the international market, with severe consequences, both to China's economy and society, as well as to stable international development and diplomacy. Now is the time for economic and business circles of the West to recognize the dark side of China's economic development: that, continuing along its present course, there are profound risks and ramifications, not just for Chinese, but also for the planet.


The growth of manufacturing in China has forcefully altered the economies of countless other countries, including those that have a long tradition of industrial ingenuity. In the first place, the world's unskilled and semi-skilled laborers are finding it increasingly difficult to remain competitive at subsistence wages. In addition, the money diverted from Western into Chinese manufacturing, along with the rampant spending on imported, Chinese-made goods, has resulted in lay-offs, unemployment and increased popular dependence on government handouts. The final and most glaring effect is the dwindling of Western goods production, and the resulting loss of both income and tax revenue.


These issues are of paramount concern to industrialized economies, but it is Chinese oppression of labor that remains the continuous threat to the global market. Workers are often forced into 12-16 hour workdays, 7 days a week, and wages are meager (and stagnant compared to the growth of the economy) if paid at all. Factories are toxic and unsafe, leading to ever-increasing rates of work-related accident and death (coalmine disasters took the lives of nearly 5500 Chinese in 2005). Implementing just some of the standards familiar to industrialized nations, such as worker safety, social security and negotiated or minimum wages, would go a long way toward lightening the burden on both the Chinese worker and the international manufacturing economy. Tragically, if Western industrial economies such as Germany wish to continue to be competitive, either China will have to elevate the status of its workers or else those of the West will continue to be in jeopardy.


It is incongruous, in a way, that the Marxist diagnosis of bourgeois capitalism would so perfectly fit the arbitrary hierarchy, increased income disparity and corruption that plague a country so resolute in its ideology of Marxism. More investment without political reform can only intensify these traits, leading to the possibility of catastrophic social upheaval. Recent statistics, in fact, support this ominous trend: the national police announced in January that protests and "public order disturbances" in 2005 rose 6.6 percent from the year before-to 87,000-and that those that "interfered with government functions" rose by 19 percent. Protesters have cited many grievances, including lay-offs, corruption, pollution and unpaid wages, but without an avenue of peaceful negotiation, such as independent workers' unions, strikes and protests continue to be a major risk in the stability of the nation.


Income disparity continues to be a primary source of social unrest, both in China's cities and in the overwhelmingly poor countryside. The gap between rich and poor has magnified exponentially, and the migration of hundreds of millions of peasants to the cities has intensified that conflict. Among the migrants are Mafias, forced by poverty into organized crime, swindling, drug- and even human trafficking, contributing to an already over-burdened urban landscape. This, combined with the corruption ingrained in the local and regional political structure and police force, has made China the least stable society in the world.


Former Chancellor Schroeder had made it a habit to over-look problems with the regime, but present Chancellor Merkel seems to have a more skeptical and even-handed approach. In her first official state visit with the Bush administration, she decried China as a country who doesn't "abide by any rule." That is, the political powers of China have resisted efforts by other governments to trade and manufacture according to free market economy practices, and to curtail corruption and abuse of autocratic rule. Even China's public assurances of change-for admission to the World Trade Organization-are shrouded in doublespeak and unmet promises.  


Lack of respect for intellectual property rights and a staggering copyright piracy rate of 90% have garnered ire from innovators in the international community, who are now basically excluded from China's huge consumer market. Equally terrifying to Western industrialists is the possibility that production technology can be stolen, resulting in cheaper knock-offs of a product inundating the market.


Behind these revelations is the sobering reality that the rule of law has proven severely lacking in Chinese politics. In its place is a system in which corruption and bribes are ubiquitous, and the judiciary, in so far as it exists, is too heavily controlled by the Communist Party regime to be an object of recourse.


The absence of rule of law has several negative consequences to investment in the Chinese economy. First is lowered efficiency. The corruption and bribes that plague the system mean that more foreign money lines the pockets of officials than is directed toward production. One example of where this is most prevalent is in real estate. Resettlement costs, supposedly to persons already living on the site, can be hugely inflated, with most of the money going to well-connected brokers and powerful, wealthy resettlement officials. One of the primary reasons for protest among the poor in China is the lack of reparations given to those resettled for factories, office buildings and shopping malls, etc.


The second risk in China stemming from the absence of rule of law is that, despite economic liberalization, property can still be seized by the state at any time. As recently as January, the government sentenced an investor to prison for protesting the local government's take-over of his increasingly profitable oil fields. Increasingly violent clashes between government forces and Chinese people stem from this fundamental lack of protection for private property.


Coupled with these is the unreliability of China's financial sector. Its banks, over-burdened by bad debt and non-performing loans (as a result of state control over lending practices) are further troubled by corruption. Last year three of China's banks were caught in bribery, loan fraud and embezzlement scandals, but those were just the most publicized of a system fraught with crises.  Part of the problem in China's banks is that they must pick up the slack of a poorly constructed and state-controlled stock market, which has lost half its value over 5 years, even while the economy continues to steam-roll.


Political oppression from the authoritarian government affects more than just human rights, the shooting of protesters and unaccountable leaders. Communication necessary for public health (such as the SARS cover-up), social stability and government transparency are severely limited. Journalists are given a very short rein on the mainland, and it is even more difficult for foreign journalists to find out what is really going on. As a result, the flow of information that might be relative to an investment, economic status or even human lives can be hindered.


More than ever, foreign businesses are forced to compromise their integrity by doing business with the communist regime. One glaring recent example is the case of American Internet giant Yahoo!, which gave in to government demands for information leading to reporter Shi Tao's private email account and the IP address of his computer. He was later convicted of divulging state secrets and sentenced to 10 years in prison. The "secrets" were the trivial and obvious revelation that the 15th anniversary of the Tiananmen Square massacre could incite protests.  Unfortunately, other big businesses includes Google are following suit.  Yet, the Western governments is so overwhelmed by the lobbying effort from these businesses that they have not come to the full realization of the risk and loss their own societies would be suffered altogether of from these kind of practice and the global terrorists also reached their goals of pushing these nations lean to lost of their own civil liberty in a similar fashion.


More than protests or inhumane labor treatment, pollution and environmental degradation are almost certainly the greatest crises facing China's growing economy today. Respiratory diseases from bad air are the number one cause of death in China, and acid rain has affected areas as far as Korea and Siberia as well as a third of its own citizens. Over-logging has caused the rapid desertification of the northern and western parts of the country, leading to dust storms that sweep across the heavily populated coast and other countries' major urban areas. Another detrimental effect of logging is erosion: in the south, flooding has become increasingly devastating and frequent because of it. China's thirst for wood has already put a strain on logging in Indonesia, inciting unlawful forest destruction and risks to threatened species. The pollution of rivers (as much as 70% are polluted from industrial and agricultural wastes) affects other countries in the region, including Russia, Burma, Laos and Cambodia. Water shortages continue to exacerbate an already desperate situation for peasants across China, leading to more and more urban migration and social unrest.


Altogether, yearly costs to the Chinese economy in reduced health and productivity from pollution and other environmental problems have been pegged at 8% of GDP, or roughly the economy's annual growth.


Greenhouse gas emissions are, of course, the environmental problem with not just regional, but worldwide global-warming consequences. According to one BBC report, China's total CO2 emissions are expected to overtake those of the U.S. by mid-century.


All these problems are the direct result of the lack or impotence of Chinese law and the blind pursuit of short-term wealth. In the West we must face the reality that huge quantities of inexpensive imported products do have a cost; one that ultimately stems from the lack of effective regulation over Chinese enterprise.


The environmental damage leveled upon China and its people is in no small part due to the energy demands of its economy and the relative inefficiency of its industry (consumption is 3 to 5 times that of developed nations when compared to GDP). Thus, as China grows, it must maneuver for greater control of natural resources, increasing competition and raising energy prices worldwide. The situation will become increasingly ripe for conflict, unless Western nations can devise effective ways of limiting China's demand for energy.


World energy shortages, however, are not the only one route to conflict in Asia. Besides Taiwan, China has had quarrels with several neighbors over borders, cultural alliances and territorial waters, any of which could become a flash point for China's growing armed forces. Taiwan and trade, however, are the primary reasons introduce threats to regional security.


Trade disputes (over issues such as shipping lanes in the South China Sea and Middle Eastern oil) will likely grow as China's wealth and influence provide greater opportunity for audacity. Between democratic countries, these disputes would most likely be resolved in negotiation, but China's political system is based on the teachings of Mao: "political power grows out of the barrel of a gun."  The Communist government established itself as the ruler in China by following these doctrines, but the Chairman could not have imagined the scale of weaponry involved when he wrote that in 1939: General Zhu ChengHu of the People's Army recently insisted that nuclear weapons may be used in the event of conflict over Taiwan, as well as advocated the need and capacity for China to destroy hundreds of the US cities, and took over most of the Asia, partially due to its own failed one-child policy, and other problems including the ones resulted from this deformed economic growth.


Furthermore, China's need for external conflict can equally be stimulated by forces within the country. The ruling party is facing ever-increasing dissent from inside its borders, and confronts the growing need to reassert its legitimacy. Governments in this position have often resorted to military might to build nationalism and to redirect attention from flaws in their own economic and political systems. China's record on this policy question is not promising. It has started wars in Korea (to legitimize the Party shortly after it came to power), India (during the famines of the Great Leap Forward), Russia (during the unrest of the Cultural Revolution) and Vietnam (as Deng Xiaoping filled the power vacuum left by the deceased Chairman Mao). The lesson is clear: it doesn't take an outside threat to rouse China to war.


In sum, we have a rapidly industrializing autocracy surrounded by potential enemies, still indignant over wars a generation ago and laying claims to neighboring territories. China today and Germany on the eve of World War I have these in common, but the brutality of the Chinese government is much more akin to that of Germany on the eve of World War II.


In the face of the threat from a volatile dictatorship of armed conflict over Taiwan, energy resources or national pride, European powers must recognize the need to continue their arms embargo. Should a war break out with the help of these European weapons, it would threaten Taiwan's democracy, the balance of power in Asia and worldwide political stability; it would be a disaster for China, Asia, Europe and the planet.


It is important for all of us to realize and to remember that the current Chinese economy is irregular, anti-free-market, manipulated by authoritarian policies and presents an extremely high risk. Should major political, social or economic problems arise within China, it could completely collapse, ushering in a world economic crisis of a magnitude well above that of Thailand's financial crisis in the 1990s -- heavy investment in China has resulted in heavy reliance on China. The rapid growth of China's economy and trade, as structured by the Communist Party, presents major concern for the fate of the world economy, and the specter of war imperils the security of humanity.


The allure untapped riches in China is shrouded in the stink of temptation reminiscent of the events of a tragic folk tale of the Han Dynasty. In the folk tale, a beautiful peasant woman is wooed by the powerful Qin Emperor after his harsh Great Wall construction project killed her husband. She relents after he promises to give her husband a burial fit for the Emperor's father. But after the funeral, the wife, without warning, sacrifices herself to the waters of a nearby river.


China is in the midst of a similar tragic conflict, between the entrenched hierarchy of the political structure and the temptation for material wealth that has perverted cultural traditions and threatened both its citizens and foreign nations.


We must continue to hope that, in the face of such turmoil, our values of world peace, freedom and economic stability are not whisked away by the current and left to drown. We must work together to prevent this kind of tragedy.  In particular, the business community of the West must take notice of the dark side of Chinese economic growth, to take necessary measures before it is too late.



Ciping Huang

Executive Director

Wei Jingsheng Foundation

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Photo published by the newspaper:



(Original article in German was published on May 9, 2006, at Handelsblatt, the biggest business newspaper in Germany.  Its website is: www.handelsblatt.biz)



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Wei Jingsheng Foundation News and Article Release Issue Number: A207-W102



Release Date: May 21, 2006



Topic: The Dark Side of China's Economic Development to the World - Economically, Security and Ecology (by Ciping Huang, original article in German was published on May 9, 2006, at Handelsblatt, the biggest business newspaper in Germany)

标题:中国经济的黑暗面,及其对国际安全与世界生态的影响 -- 黄慈萍(本文原文为德文,2006年5月9日发表于德国最大的商界报纸Handelsblatt上)


Original Language Version: English (Chinese version at the end)









-- 黄慈萍







这些工业经济方面的严重问题,是由于中国对劳工的压迫实际上给国际市场带来的连续不断的威胁。在那里,工人们通常不得不一周七天不断地、每天工作12-16小时,即使他们能及时得到他们的工资,其数量也相当低廉(对比经济增长而言几乎没有增加)。工厂通常条件恶劣,毒品泄露,安全程度低下,在工伤事故及死亡人数方面,比例持续上升。2005年煤矿工业方面的事故造成了近5500 名中国工人死亡。那些西方工业国家早已成规的福利,比如工人安全条例,社安保险金,最低工资额限定等,在中国则是望之末及的,无宜于减轻中国工人和国际制造业经济的负担。可悲的是,如果西方工业经济,比如德国,希望和中国竞争,那么只有两种情形:要么中国提高工人的待遇,要么西方工人继续陷入其绝境。


可笑的是,马克思主义者有关的资本主义的分析正是当今中国,这个以马克思主义为意识领域而建立的国家,正在发生着的现实 -- 中国社会已分化成不同的阶级,日益严重的贫富不均和腐化现象横扫全国。实际上,缺乏政治改革的更多投资只能加重这个趋势,进而把社会引向惨绝人寰的社会动乱。最近的统计数据反映了这个不祥的趋势,中国官方警察部门于今年一月份宣布,2005年示威和"扰乱治安"的事例高达87,000案例,与2004年相比上升了百分之六点六,而"影响政府功能"的事例上升了百分之十九。示威者表达了他们对社会现象的悲愤,比如下岗,腐化,环境污染和拖欠工资等等。由于没有和平协商的途径(如独立工会),罢工和示威将会成为中国社会不稳定的重要因素。






中国缺少对知识产权的尊重、盗版率高达90% 的情形引起了国际激愤,使得国际社会不得不拒绝中国这个巨大的市场。给西方工业社会带了的同样震撼是,所有的产品技术都可能被盗用,结果是大量的廉价冒牌货充斥市场。












更进一步,许多外国企业也被迫改变经营原则以屈就共产党政权。一个醒目的实例是,最近美国网络巨星雅虎公司按中国政府的要求,交出了大陆记者师涛的私人电邮帐号和个人计算机联网地址。以至于后来师涛被冠以泄露国家机密的罪名遭受判刑10年。这所谓的“国家机密”其实微不足道,不过就是透露了天安门事件15 周年时期可能发生的示威。不幸的是,一些包括古狗在内的大公司也随之效仿。然而,西方政府被这些大公司的游说左右着,他们还没有充分意识到这一系列行动对其自身社会所带来的危险与损害。与此同时,全球性的恐怖分子也在推动这些国家本身以类似的方式逐渐失去其民权自由的目标。










由于经济发展需要能源以及工业效率低下(与发展国家同等 GDP相比,中国消耗了3至5倍多的资源),中国的环境破坏给中国及其人民所造成的损失非同小可。随着中国的经济发展,它将不得不寻求对自然资源的更进一步的控制,使得竞争更加激烈,并造成全球能源价格上涨。西方国家若不找到有效途径限制中国对能源的需求,这个情形将进一步导致冲突。




贸易来往方面的争端,比如中国南海的运输线和中东石油的运输线之争,将会随着中国财富和影响力的增长而使中国更加胆敢予以挑战。民主国家之间的争端通常通过协商来解决,而中国的政治系统则基于毛泽东的策略:枪杆子里面出政权。共产党因为遵循这条原则成为了中国的统治者,但是毛泽东在 1939年写下这条策略的时候,他自己大概都无法想象多大的武力将会被使用:中国人民解放军的朱成虎将军最近表明并扬言,中国可能会使用核武器来解决问题,如台湾的问题以及中国可以摧毁美国的几百座城市,占领大部分亚洲地区,等等。而他所提出的这些动机的缘由竟归罪于中国自身的独生子女政策的失败,及其它的各类问题包括经济畸形增长中所出现的问题。














但我们在面对如此的动荡时仍然寄予希望,希望我们所珍重的世界和平、自由和经济稳定不会因此被悲剧中的激流所冲击并淹没。 因此,我们必须共同努力来防止这种悲剧。特别是:我们希望西方商界注意到中国经济发展的黑暗面,在还来得及的时刻采取必要的行动。


















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