By Shaomin Li and Seung Ho Park
China has produced a class of successful entrepreneurs whose wealth rivals the “old money” of the west. Their success has created a novel phenomenon in China: “fu-er-dai” or “2Rich,” – the second generation of the rich. While their parents earned their money through their own hard work and thus respect in society, the 2Rich have a reputation of spending lavishly and driving expensive sports cars.
While mature economies go through slow wealth transfer over multiple generations, wealthy first-generation entrepreneurs and their descendants are entirely new in fast-growing emerging economies like China. These entrepreneurs are now in their 50s and 60s and beginning to look at retirement and the question of leadership succession in their family-run businesses. Will they hand the reign over to non-family professional managers or their children? Would the 2Rich be willing and ready to continue the family tradition?
China’s crackdown on prostitution may have a broader impact on the country’s economy, just like the anti-corruption campaign did last year, according to one economist.
The Ministry of Public Security has launched a national crackdown on prostitution after a high-profile raid in the southern city of Dongguan on February 9 – the so-called the “sex city” of China. State broadcaster CCTV ran two reports to expose the city’s prostitution industry and kicked off the national campaign.
As China prepares to ring in the Year of the Horse, celebrations are expected to be more frugal than previous years as a high-profile austerity and anti-graft campaign gains momentum. Ben Marino reports from Beijing
What will the EMs next “black swan” be? With the crash of the Argentinian peso, the difficult Syrian peace talks in Montreux, and Iran’s nuclear situation, WEF participants last week had enough scenario’s to reflect on. But one fear of Davos participants about emerging markets was a rather unexpected one: the EM middle class.
Nouriel Roubini, in the CNN debate on Emerging Markets, was quick to point it out. “Paradoxically, it’s not the proletarians that are in the street in countries like Brazil, Chile, India, or Ukraine,” he said. “It’s the middle class. They’re becoming restless.”
Smog isn’t new in China – but 2013 was an especially bad year for the thick stuff. Beijing may get the headlines, but smog has affected 104 cities of 20 provinces in China, from Shanghai to Chengdu and even Sanya, so-called China’s Hawaii.
As a result, Chinese are getting their wallets out. Around Rmb870m ($142m) has been spent in facial masks, air purifiers and other anti-smog appliances so far this year, according to a ‘smog bill’ released by Taobao, China’s biggest online shopping platform. The real number will be even bigger as that’s only one online sales figure.
China’s reform plan released after the Communist Party’s Third Plenum has been hailed as ambitious and bold. It certainly has far more in it than just the one-child policy reform and abolishment of labour camps. Here is beyondbrics’ summary of the plan, grouped by category.
By Shaomin Li of Old Dominion University
A quarter of a century ago in 1988, China’s one-child policy was in full swing and some side-effects had begun to show. Concerned about it, I wrote my doctoral dissertation examining this policy under the guidance of late professors Ansley Coale and Norman Ryder at Princeton, both founding fathers of demography as a scientific study. I was among the first to point out the major flaws of the policy, and my view then was regarded as quite heretic: I proposed an alternative two-child policy that could achieve the same population control goal as the one-child policy.
Needless to say, the Chinese government did not listen to me; now many of the social problems associated with the policy we worried about then have come to pass. It now seems the policy will be eased.
Twenty five years later, the findings and policy recommendations in my dissertation are still relevant and worth re-capping.
China’s distressingly frequent food quality scandals are bad news for Chinese citizens but may be good news for UK food exports – so long as China can be persuaded to eat foods it has never eaten before, and UK food brands can adapt their traditional fare for a different kind of palate.
Don't mention the smog
Beyondbrics is sometimes a little sceptical of surveys, but here’s one that caught our eye. Where is the best place to be an expat? A comfortable European capital perhaps?
Apparently not. Forget any worries of smog, monsoons or congestion: Thailand tops HSBC’s Expat Experience league table, with China close behind. Even India is in the top 10. What’s going on?
China’s drive to urbanise is expected to transform millions of poor peasants into city-dwellers in the next two decades. Despite urban migration being a top priority for policy makers in Beijing, many ordinary Chinese are feeling left behind by the country’s rapid urbanisation. The FT’s Ben Marino reports.
Unlike many mainland Chinese shoppers, Hu Yunfeng, a 36-year-old man, took the overnight train from Beijing to Hong Kong not for Rolex watches or Louis Vuitton bags, but for books.
Hu is one of several hundred thousand mainland Chinese expected to make the journey to Hong Kong’s annual book fair, held this year from July 17 to 23. It is the biggest event in the Hong Kong summer and the world’s largest book fair in terms of visitors – more than a million people are expected in total.
With a record 7m students graduating from China’s more than 2,000 colleges this month, many Chinese media have marked June as the “most difficult season to get jobs“. And as indicators suggest the Chinese economy is losing steam fast, there have also been suggestions that 2013 will be worse than ever for new graduates seeking employment.
However, a closer look shows that much of the bad news is hype.
If any of us needs more proof that China is rapidly becoming a quintessentially middle class nation – with all that portends for companies whose products appeal to those with a bit of coin in their pocket – then take a look at the divorce statistics.
The number of divorces soared 13.2 per cent last year in Shanghai, while marriages declined 3 per cent. According to city hall data, divorces – were still well short of marriages – at 44,000 versus 144,000. But we can see which way things are going.
China’s parents will do anything to help their child succeed in life – and at this time of year, that means attending to even the most miniscule details of their sleep and evacuation patterns to guarantee maximum success in college entrance exams (gaokao) in the first week of June.
Parents throughout China are booking hotels and restaurants near every exam venue, to make sure their child can study until the very last minute on exam day, and eat nutritious meals nearby that will not send him out of the examination halls with the kind of bowel complaint that could consume precious exam minutes.
The news that Guangzhou is to start building a costly cemetery exclusively for revolutionary heroes and government officials this October has stirred up something of an online controversy.
With the cost of cemetery space far higher than housing, it has highlighted the increasing inequality in Chinese society – in death, as well as in life.