Saturday, October 26, 2013

Chinese Romanticism or stupidity



China has undergone gigantic changes in recent years, especially in economic areas. The market economy reform has disrupted the old system, leaving many disgruntled. Many complaints about the current outcomes are unfair for three reasons. 1) The current outcomes compared to the old unsustainable outcomes 2)The comparison ignores the gains and focuses on the losses alone 3) The comparison is made with the rest of the world, partially imagined by the Chinese to justify their complaints.


I will give some examples to illustrate how ridiculous such perceptions can get.


Education. People in China have so much complaints about their education. They think it sucks. The American education, on the other hand, rocks. American high school kids are stress-free, they do not have to work hard, they still get into good colleges and earn good money. That is how a Chinese people think. Our school teaches Maths and Science that is useless. American never need to learn that, and they are fine. So our school system is so outdated. Mea culpa. I once thought so as well. Indeed even after I came to US and realize that the US education system is far worse than the ideal I imagined it to be, I still held a bias against my hometown education (though I was never aware of it). I was shocked when I read in NYT the other day that Shanghai public secondary schools topped the world charts in the 2009 PISA (Program for International Student Assessment). When I told this to my parents, their response is "really? that is weird!"


Health care. Chinese people think they have the most expensive health care. They feel doctors earn too much. Look at Americans, their health care is much more affordable and the poor do not have to worry about not being able to go to the hospital. Nothing could be farther from the truth. I am not sure how they would react if I tell them that it cost me \$364 to get a chest X-ray, which cost a bit above 100 RMB (\$20). It is revealing to observe that when Chinese students in US go back for vacation, they rush to the dentist to get their wisdom teeth out, regardless they are impacted or not.



Housing prices. People complain about housing prices. yes, no doubt the housing prices are high. But it is unfair comparison. Americans pay property tax, but there is no property tax in China. So when you compare property prices, you have to add in the present value of all future tax payment. Also, you cannot compare Shanghai to Philadelphia. NYC is probably the only legit comparison. Many so called cities in US are nothing but small towns in China in terms of population. The demand for housing is simply no comparison. Also there is enormous difference in infrastructure. Cities in China means unparalleled public school system, convenient public transportation, better health care, and safety. The cities in US tend to have lots of problems like crime-ridden slums, inner city schools. With the only exception of NYC, the public transportation is no comparison. Even for NYC, their public transportation is outdated when compared to most cities in China.


Automobile ownership. China does tax automobile ownership a lot---this is done via expensive motor registration. The right to register is auctioned off in places like Shanghai in limited quantity, and people just bid up the prices. In Shanghai at least, that right to register could be more expensive than the car itself. I actually applaud this. I think in cities in China, the sheer number of automobiles create huge negative externalities in terms of pollution and congestion. This externatlity is best internalized via taxation, not only in car ownership and oil tax. In US, car ownership in cities is usually taxed in another form---the difficulty to find a parking place. It is so prohibitive that some people think twice before driving to cities. This tax is prevalent---even in the tiny "city" of Seattle, you will need to drive around for quite a while to get a roadside parking place. Finally it is funny to note that while a shanghainese will complain that the government do so little to alleviate the congestion problem and the pollution problem and complain that it is so expensive for him to buy another car.

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