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Home » Opinion » Opinion Columns
Can peasants' purse strings pull us through?
By Wan Lixin |
February 9, 2009, Monday
|
Print Edition
Print Edition
ASTUTE home appliances giants and auto makers are in a race to harness Chinese peasants' hypothetically fabulous consumption power.
That, say economists, can help cushion the blow from the sudden drop in external demand.
The result could be counterproductive. Unaccustomed to such marketing attentions, peasants may be instinctively tightening their purse strings.
Professor He Xuefeng has arrived at a not-surprising conclusion after field study: To stimulate rural demand might plunge some peasant-migrants into a worse plight.
His assessment is based on two weeks of investigation into the conditions of some villagers in Guizhou and Hunan provinces early this year.
In a village in Guizhou, he learned that as a result of the economic crisis, about 600 of the 2,000 local migrants have returned to their native village from working in cities.
He believes that the real challenge for many returnees is overcoming the debilitating influence of an urban lifestyle centered on consumption.
Given their intrepid habits of consumption, once the returnees have used up the pittance they have laid by, they might resort to crime to keep up their extravagance, said Professor He in a recent interview.
He challenged the prevailing strategy of fueling growth by stimulating rural consumption.
Their consumption might temporarily help clear the inventory of manufacturers.
But these peasant-migrants have scraped together a small sum, at the expense of their youth, by working in the cities, which should be a guaranty against future uncertainties.
It is reported that the state is considering setting up a social security scheme for migrant workers, but it will take a very long time before it can take shape.
If "consumption is patriotic" is absurd, then indiscriminately stimulating rural consumption can be irresponsible.
As Xinhua-sponsored Banyuetan (China Comment) magazine points out recently, thanks to policy support and a number of measures at easing peasant burdens, peasant savings are increasing.
"But the peasants still dare not spend, for almost any rural family can easily plunge into destitution due to expenditures on illness, education, or home-building," the magazine said. To this list we can now add the unprecedented drought in some northern provinces.
Fortunately, rural China remains the last repository of traditional Chinese values.
When the majority of peasants still value frugality and the wisdom of spending within one's means, inducements to lure them spend can have little hope of success.
For instance, China's home appliances makers are launching repeated campaigns to infiltrate the vast countryside.
Reality check
A spokesman from Haier, China's big-time home appliances maker, was asked by China Business News in a recent interview whether the campaign can save the air conditioner makers.
"My answer is firmly in the negative. Such government-driven initiative helps, but only in a very limited manner,'' he said.
A villager in Shaanxi Province said he would not buy an air conditioner even if the purchase were to be subsidized at 13 percent of its price, citing the exorbitant price and consumption of power.
Instead of hastily sending home appliances to the countryside, we should send economists and policy advisers there for a reality check.
If that's beneath their dignity, they can refer to last week's South Weekend for a vicarious experience.
The weekly paper compiled a series of reports of rural conditions filed by staff reporters who stayed in their rural homes for the Spring Festival.
Wei Libin wrote from Weinan in Shaanxi Province that as most prime-age men and women are working in cities, it is even difficult to find enough pall-bearers for a funeral.
Notwithstanding the poverty and the lack any substantial industrial support, local property prices are among the highest in the region - Wei described this thriving growth independent of local income as "abnormal."
Reporter Ge Qing reported from one of the most remote and impoverished villages in Xiangtan, Hunan Province. He too noted that nearly all prime-age villagers have left their homes.
A couple who had made their pile by doing business in Guangzhou, Guangdong Province, found to their dismay that although they have money, they cannot find enough workers to remodel their just-built home in the village.
Prices are extremely high in that area.
For a villager there to build a three-story building, he needs to pay 100,000 yuan (US$14,630), just for using the land. Construction is extra.
The pork there costs 10 yuan/500 gram, higher than in Guangzhou.
By the way, when I returned to my hometown in northern Jiangsu Province, I found that villagers there are required to pay a similarly astronomical fee for land use.
These grim pictures of rural China are quite a contrast to the image of idyllic beauty, rustic simplicity and mirth celebrated by Chinese men of letters since time immemorial.
The idea of a shortage of pall-bearers captured my imagination: What can they expect when "all the bloomy flush of life is fled"?
All this suggests the urgency of subjecting rural China itself to a healing process, which is destined to be long, complicated, and painful.
So far, China's rural success stories are invariably accompanied by massive diversion of rural resources to industrial use, on the unspoken assumption that farming is backward, unproductive, and undignified.
Professor Hua Sheng claims in China Business News last week that it is unrealistic for young migrants to return to the farmland. Then who will till the land 20 years from now?
These farmers-turned-migrants have fueled China's growth as laborers, now let's spend a few minutes reflecting on them as children and parents - before targeting them as consumers.
That, say economists, can help cushion the blow from the sudden drop in external demand.
The result could be counterproductive. Unaccustomed to such marketing attentions, peasants may be instinctively tightening their purse strings.
Professor He Xuefeng has arrived at a not-surprising conclusion after field study: To stimulate rural demand might plunge some peasant-migrants into a worse plight.
His assessment is based on two weeks of investigation into the conditions of some villagers in Guizhou and Hunan provinces early this year.
In a village in Guizhou, he learned that as a result of the economic crisis, about 600 of the 2,000 local migrants have returned to their native village from working in cities.
He believes that the real challenge for many returnees is overcoming the debilitating influence of an urban lifestyle centered on consumption.
Given their intrepid habits of consumption, once the returnees have used up the pittance they have laid by, they might resort to crime to keep up their extravagance, said Professor He in a recent interview.
He challenged the prevailing strategy of fueling growth by stimulating rural consumption.
Their consumption might temporarily help clear the inventory of manufacturers.
But these peasant-migrants have scraped together a small sum, at the expense of their youth, by working in the cities, which should be a guaranty against future uncertainties.
It is reported that the state is considering setting up a social security scheme for migrant workers, but it will take a very long time before it can take shape.
If "consumption is patriotic" is absurd, then indiscriminately stimulating rural consumption can be irresponsible.
As Xinhua-sponsored Banyuetan (China Comment) magazine points out recently, thanks to policy support and a number of measures at easing peasant burdens, peasant savings are increasing.
"But the peasants still dare not spend, for almost any rural family can easily plunge into destitution due to expenditures on illness, education, or home-building," the magazine said. To this list we can now add the unprecedented drought in some northern provinces.
Fortunately, rural China remains the last repository of traditional Chinese values.
When the majority of peasants still value frugality and the wisdom of spending within one's means, inducements to lure them spend can have little hope of success.
For instance, China's home appliances makers are launching repeated campaigns to infiltrate the vast countryside.
Reality check
A spokesman from Haier, China's big-time home appliances maker, was asked by China Business News in a recent interview whether the campaign can save the air conditioner makers.
"My answer is firmly in the negative. Such government-driven initiative helps, but only in a very limited manner,'' he said.
A villager in Shaanxi Province said he would not buy an air conditioner even if the purchase were to be subsidized at 13 percent of its price, citing the exorbitant price and consumption of power.
Instead of hastily sending home appliances to the countryside, we should send economists and policy advisers there for a reality check.
If that's beneath their dignity, they can refer to last week's South Weekend for a vicarious experience.
The weekly paper compiled a series of reports of rural conditions filed by staff reporters who stayed in their rural homes for the Spring Festival.
Wei Libin wrote from Weinan in Shaanxi Province that as most prime-age men and women are working in cities, it is even difficult to find enough pall-bearers for a funeral.
Notwithstanding the poverty and the lack any substantial industrial support, local property prices are among the highest in the region - Wei described this thriving growth independent of local income as "abnormal."
Reporter Ge Qing reported from one of the most remote and impoverished villages in Xiangtan, Hunan Province. He too noted that nearly all prime-age villagers have left their homes.
A couple who had made their pile by doing business in Guangzhou, Guangdong Province, found to their dismay that although they have money, they cannot find enough workers to remodel their just-built home in the village.
Prices are extremely high in that area.
For a villager there to build a three-story building, he needs to pay 100,000 yuan (US$14,630), just for using the land. Construction is extra.
The pork there costs 10 yuan/500 gram, higher than in Guangzhou.
By the way, when I returned to my hometown in northern Jiangsu Province, I found that villagers there are required to pay a similarly astronomical fee for land use.
These grim pictures of rural China are quite a contrast to the image of idyllic beauty, rustic simplicity and mirth celebrated by Chinese men of letters since time immemorial.
The idea of a shortage of pall-bearers captured my imagination: What can they expect when "all the bloomy flush of life is fled"?
All this suggests the urgency of subjecting rural China itself to a healing process, which is destined to be long, complicated, and painful.
So far, China's rural success stories are invariably accompanied by massive diversion of rural resources to industrial use, on the unspoken assumption that farming is backward, unproductive, and undignified.
Professor Hua Sheng claims in China Business News last week that it is unrealistic for young migrants to return to the farmland. Then who will till the land 20 years from now?
These farmers-turned-migrants have fueled China's growth as laborers, now let's spend a few minutes reflecting on them as children and parents - before targeting them as consumers.
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