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ASIA
JULY 19, 1999 VOL. 154 NO. 2
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Fan: Yes, but the urbanization process itself will create jobs. The reason why is that in previous years rural industry was limited--it produced things, but it didn't produce many consumers. Urbanization means more public infrastructure, more housing. The urban service sector itself creates jobs.
Xie: But urbanization also can create an ecological disaster. So in China people have to pioneer something like a supercity. It will be something different from what the United States is experiencing. It's more like in Japan. Take Honshu Island--the whole island is really a city with 60 million to 70 million people. That is the sort of scale we're talking about.
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CNN, TIME, Asiaweek and Fortune examine China at 50
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Xie: The future of agriculture depends largely on genetic engineering and mechanization, so it's very possible that the yields could rise a lot. Look at the development of new varieties of corn. Corn crops in the U.S. have greater resistance to pests, and they are also less labor-intensive.
Fan: Labor is not the issue, because now the labor productivity of Chinese farms is very low. Many rural people are under-employed. Nominally, there are a lot of workers. Actually, they can be reduced by one-third to one-half without changing output.
Lardy: The real scarcity is land. The question is, how do you overcome that problem? Technological change is one possibility. But because of this land scarcity, I don't think China can follow patterns previously found in Europe and America's industrialized towns, which ate up a lot of land.
Xie: China just has to grow differently, because its population density is tremendously different from anybody else's. The challenge of urbanization is not that you can't keep people on the land but that you are going to have an ecological disaster when they move.
Hu Angang, professor, Qinghua University: During the 1990s natural disasters subtracted 3% to 5% from the GDP. Pollution now accounts for 3.5%. China's GDP is 57% of America's, but its consumption of water resources is nearly equal to America's. The question is how do we encourage new technology in solving these problems.
Zhang: Technology may mean that the environment issue, the problem of energy--all these important problems might be solved. Take the car industry. In the next 20 years, we may have a totally new car, with no pollution and lower energy consumption.
The Population Trap
Hu: In the next 50 years China will have to face three population "peaks." First, by the year 2030 the total population will reach 1.6 billion. There are concerns as to how to feed this many people. The second peak will happen by 2020, when the working population--aged 15 to 64--will be 1 billion. That means we will have to create a lot of new jobs. The third peak involves the aging population--by 2040 the population above 60 will be about 320 million. This will make the social security system a big issue--how to take care of the aging population.
Zhang: Most worrisome is the social safety network. People who are 20 now will be 60 and ready to retire in 2040. During the 40 years in between, they will have to accumulate wealth for their retirement life. So it's urgent to start planning for them now.
Fan: That's a good point. The process of urbanization will go on for another 50 years. That means in 50 years, we have to make sure that new arrivals in the city will come into a social security network. But during this process, the social security system will be very sustainable. That's because even though we have an aging population, most of the newcomers to the labor force are young people. There will be more young people paying into the social security system than elderly taking money out. We'll have more young people to create savings.
Zhang: But they can't accumulate wealth fast enough. The Europeans started building a social security system very early in the industrialization process, and they're still having trouble. We haven't even started.
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