Hyperinflation and the Chinese Economy

cwellen cwellen at pen.k12.va.us
Fri Oct 18 00:20:47 MDT 1996


Comradely Greetings from Wei En Lin,

I have been offline for a while because of local server problems.

On the issue of the Chinese economy, Mr. Godena admonishes B. Rosser:

"Barkely Rosser compares the current economic configuration in China
with the New Economic Plan in 1920s Soviet Russia.    It is a specious

Of course there are some similarities between the two, but Mr. Godena is
on balance correct.  Nevertheless, I think all Chinese government
statistics and World Bank statitics on the subject should be viewed with
great skepticism.

China's 'economic progress' is far more problematic than the statistics
suggest.  We should at least consider the fact that the World Bank is
mainly interested in pumping up the Chinese economy so it can serve as a
source of return for transnationals, and the party elite--now emersed in
bourgeois or pseudo-socialist ideology.  They do not serve the interests
of most workers and  peasants in China, ie, the vast majority.

Another issue which should not be glossed over is the tremendous cost of
China's style of economic development.  People are literally dying
because of the pollution.  I was compelled to move out of Beijing
because my doctor said the pollution would destroy my lungs.  Severe
chronic bronchitis and other lung diseases, caused by extremely high
levels of sulfur dioxide and particulate matter, are endemic in the
major cities.  Beijing, Shanghai, and Shenyang rank among with the worst
cities in the world.  Clearly the World Bank, the CP elite, and the new
Chinese bourgeoisie care little about the costs of increased levels of
production to the urban worker.  The elite in China can deploy filters
in their homes and take trips to the countryside whenever they want to
keep their lungs clean.  Working class people ride through the streets
of the cities on their bicycles with only cloth masks to protect them
>from the rapidly increasing levels of automobile fume contamination.

There is no question that the health of urban Chinese will continue to
suffer gravely, though it may be some time before this is reflected in
statistics (assuming the government will publish an accurate
accounting).  Here is one statistic the Chinese government is proud to
publish:  By 2020 every Chinese family will own a car.  Any thoughtful
person should be aghast at the idea.  The negative effects on the
environment will be felt worldwide.

Many people who have not visited the developing the world cannot imagine
the severity of the pollution.  According to UN statistics, the
pollution levels in Shenyang, Beijing and New Delhi are FORTY TIMES
HIGHER than the levels in US cities like Los Angeles, New York, and
Chicago.  It is amazing to hear Londoners and Parisians complain about
pollution.  Put a European or North American in Shanghai for a year or
so and they will choke to death without appropriate measures and
treatment.  The air in New Delhi is so thick from particulate matter now
that you cannot see more than 20 meters.  Sulfur dioxide in very heavy
concentrations produces a yellowish haze in Beijing, but the effects on
health are far worse than the visual evidence seems to indicate.

The problems have their root in the fact that the Chinese Communist
system is not accountable to the workers at all.  Workers are simply
ordered to fall in line. The existence of "Workers' Stadium" or
"Construct Socialism Street" does not prove that that the country is run
for the sake of the socialism or the workers.

I would contrast the social system in China with the system in India's
Kerala province.  The Keralese were the first in the world to elect
communists to power.  They have held power through most of Kerala's
post- independence history.  The province has maintained the highest
standards in Life expectancy, infant care, literacy, income distribution
in the whole of Asia (excepting Taiwan, Singapore and Japan); as well as
preserving the basic civil right---freedom to strike, freedom to
assemble, freedom of speech, freedom of the press.  The results have
been achieved without massive industrialize or export orientation.

Brief remarks on inflation in China:

As in the US, inflation statisics do not reflect the decline in
purchasing power of the working person.  They lump in the prices
increases of instruments of production and consumption articles.
The true rate of inflation, as it directly effects the worker, should be
computed on the basis of articles of primary consumption, food, housing,
basic medical care, etc.  Usually the total inflation index is much
lower than the basic articles of consumption index.

Sincere regards,

Wei En Lin

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