Economic Growth – Page 22 – artdiamondblog.com

Chinese College Graduates Are Underemployed “Ant Tribe” in Big Cities

(p. A1) BEIJING — Liu Yang, a coal miner’s daughter, arrived in the capital this past summer with a freshly printed diploma from Datong University, $140 in her wallet and an air of invincibility.

Her first taste of reality came later the same day, as she lugged her bags through a ramshackle neighborhood, not far from the Olympic Village, where tens of thousands of other young strivers cram four to a room.
Unable to find a bed and unimpressed by the rabbit warren of slapdash buildings, Ms. Liu scowled as the smell of trash wafted up around her. “Beijing isn’t like this in the movies,” she said.
Often the first from their families to finish even high school, ambitious graduates like Ms. Liu are part of an unprecedented wave of young people all around China who were supposed to move the country’s labor-dependent economy toward a white-collar future. In 1998, when Jiang Zemin, then the president, announced plans to bolster higher education, Chinese universities and colleges produced (p. A12) 830,000 graduates a year. Last May, that number was more than six million and rising.
It is a remarkable achievement, yet for a government fixated on stability such figures are also a cause for concern. The economy, despite its robust growth, does not generate enough good professional jobs to absorb the influx of highly educated young adults. And many of them bear the inflated expectations of their parents, who emptied their bank accounts to buy them the good life that a higher education is presumed to guarantee.
“College essentially provided them with nothing,” said Zhang Ming, a political scientist and vocal critic of China’s education system. “For many young graduates, it’s all about survival. If there was ever an economic crisis, they could be a source of instability.”
. . .
Chinese sociologists have come up with a new term for educated young people who move in search of work like Ms. Liu: the ant tribe. It is a reference to their immense numbers — at least 100,000 in Beijing alone — and to the fact that they often settle into crowded neighborhoods, toiling for wages that would give even low-paid factory workers pause.
“Like ants, they gather in colonies, sometimes underground in basements, and work long and hard,” said Zhou Xiaozheng, a sociology professor at Renmin University in Beijing.
. . .
A fellow Datong University graduate, Yuan Lei, threw the first wet blanket over the exuberance of Ms. Liu, Mr. Li and three friends not long after their July arrival in Beijing. Mr. Yuan had arrived several months earlier for an internship but was still jobless.
“If you’re not the son of an official or you don’t come from money, life is going to be bitter,” he told them over bowls of 90-cent noodles, their first meal in the capital.
. . .
In the end, Mr. Li and his friends settled for sales jobs with an instant noodle company. The starting salary, a low $180 a month, turned out to be partly contingent on meeting ambitious sales figures. Wearing purple golf shirts with the words “Lao Yun Pickled Vegetable Beef Noodles,” they worked 12-hour days, returning home after dark to a meal of instant noodles.
. . .
Mr. Li worried aloud whether he would be able to marry his high school sweetheart, who had accompanied him here, if he could not earn enough money to buy a home. Such concerns are rampant among young Chinese men, who have been squeezed by skyrocketing real estate prices and a culture that demands that a groom provide an apartment for his bride. “I’m giving myself two years,” he said, his voice trailing off.
By November, the pressure had taken its toll on two of the others, including the irrepressible Liu Yang. After quitting the noodle company and finding no other job, she gave up and returned home.

For the full story, see:
ANDREW JACOBS. “China’s Army of Graduates Is Struggling.” The New York Times, First Section (Sun., December 12, 2010): A1 & A12.
(Note: ellipses added.)
(Note: the online version of the story is dated December 11, 2010 and has the title “China’s Army of Graduates Struggles for Jobs.”)

Neanderthals and Cro-Magnons Did Not Much Overlap: Evidence Against an Early Human Golden Age

In 2010 archeologist Brian Fagan published a book that used his read of the evidence to imagine the interactions between Cro-Magnon (us) and Neanderthal humans. He mostly portrayed the interaction as one of wary, but mainly benign mutual neglect. His broader portrayal of the lives of the hunter-gatherer Cro-Magnons did not completely place them in a Golden Age, but did much to praise many aspects of their lives.
Also in 2010, Matt Ridley published a book that discussed and dismissed the view that the hunter-gatherers were to be admired. He mainly pointed to the evidence of how common violent death was among hunter-gatherers, and hence how precarious and fearful their lives must have been.
Now there is additional relevant evidence. Apparently the period of overlap between Cro-Magnons and Neanderthals was much briefer than had been previously believed. This implies (see below) that rather than benign mutual neglect, it is much more likely that the Cro-Magnons violently wiped out the Neanderthals.
Hobbes may not have been entirely wrong when he described early human life as “nasty, poor, brutish and short.”

(p. D4) An improvement in the dating of fossils suggests that the Neanderthals, a heavily muscled, thick-boned human species adapted to living in ice age Europe, perished almost immediately on contact with the modern humans who started to enter Europe from the Near East about 44,000 years ago. Until now bones from several Neanderthal sites have been dated to as young as 29,000 years ago, suggesting there was extensive overlap between the two human species. This raised the question of whether there had been interbreeding between humans and Neanderthals, an issue that is still not resolved.
. . .
Reviewing . . . Neanderthal dates ascertained with the new ultrafiltration method, Dr. Higham sees an emerging pattern that no European Neanderthal site can reliably be dated to less than 39,000 years ago. “It’s only with reliable techniques that we can interpret the archaeological past,” he said.
He is re-dating Neanderthal sites across Europe and so far sees no evidence for any extensive overlap between Neanderthals and modern humans. “There was a degree of contemporaneity, but it may not have been very long,” he said. A short period of contact would point to the extinction of the Neanderthals at the hands of modern humans.
“It’s very unlikely for Neanderthals to go extinct without some agency from modern humans,” Dr. Higham said.
Paul Mellars, an expert on Neanderthals at Cambridge University in England, said that the quality of the dates from Dr. Higham’s laboratory was superb and that samples of bone re-dated by the lab’s method were almost always found to be several thousand years older than previously measured. The picture supported by the new dates is that the interaction between modern humans and Neanderthals in Europe was brief in each region, lasting perhaps a few hundred years, Dr. Mellars said, until the modern humans overwhelmed their competitors through better technology and greater numbers.

For the full story, see:
NICHOLAS WADE. “Neanderthals and Early Humans May Not Have Mingled Much.” The New York Times (Tues., May 10, 2011): D4.
(Note: ellipsis added.)
(Note: the online version of the article is dated May 9, 2011.)

The Fagan book is:
Fagan, Brian. Cro-Magnon: How the Ice Age Gave Birth to the First Modern Humans. New York: Bloomsbury Press, 2010.

The Ridley book is:
Ridley, Matt. The Rational Optimist: How Prosperity Evolves. New York: Harper, 2010.

“Progress Depended on the Empirical Habit of Thought”

In the passage below from 1984 Orwell presents an underground rebel’s account of why the authoritarian socialist dystopia cannot advance in science and technology.

(p. 155) The world of today is a bare, hungry, dilapidated place compared with the world that existed before 1914, and still more so if compared with the imaginary future to which the people of that period looked forward. In the early twentieth century, the vision of a future society unbelievably rich, leisured, orderly, and efficient–a glittering (p. 156) antiseptic world of glass and steel and snow-white concrete–was part of the consciousness of nearly every literate person. Science and technology were developing at a prodigious speed, and it seemed natural to assume that they would go on developing. This failed to happen, partly because of the impoverishment caused by a long series of wars and revolutions, partly because scientific and technical progress depended on the empirical habit of thought, which could not survive in a strictly regimented society.

Source:
Orwell, George. Nineteen Eighty-Four. New York: The New American Library, 1961 [1949].

By Canadian law, 1984 is no longer under copyright. The text has been posted on the following Canadian web site: http://wikilivres.info/wiki/Nineteen_Eighty-Four

Government Administrators Steal Money, Food and Benefits from Poor in India

(p. A8) NEW DELHI — India spends more on programs for the poor than most developing countries, but it has failed to eradicate poverty because of widespread corruption and faulty government administration, the World Bank said Wednesday.
. . .
One of the primary problems, the World Bank said, was “leakages” — an often-used term in development circles that refers to government administrators and middle men stealing money, food and benefits. The bank said that 59 percent of the grain allotted for public distribution to the poor does not reach those households.

For the full story, see:
“India’s Anti-Poverty Programs Are Big but Troubled.” The New York Times (Thurs., May 19, 2011): A8.
(Note: ellipsis added.)
(Note: the online version of the story is dated May 18, 2011, has the title “India’s Anti-Poverty Programs Are Big but Troubled,” is attributed to Heather Timmons, and is considerably more detailed than the published version.)

Chinese Government Created Real Estate Bubble in a Dozen Ghost Towns Like Kangbashi Area of Ordos

“As China’s roaring economy fuels a wild construction boom around the country, critics cite places like Kangbashi as proof of a speculative real estate bubble they warn will eventually burst.” Source of photo: online version of the NYT article quoted and cited below. Source of caption: online version of the NYT slideshow that accompanied the online article quoted and cited below.

The October 19, 2010 New York Times front page story (quoted below) on the Ordos ghost town in China, was finally picked up by the TV media on May 30 in a nice NBC Today Show report.
It should be clear that the Chinese real estate bubble will burst, just as real estate bubbles eventually burst in places like Japan and the United States. What is not clear is what the effects will be on the Chinese and world economies.

(p. A1) Ordos proper has 1.5 million residents. But the tomorrowland version of Ordos — built from scratch on a huge plot of empty land 15 miles south of the old city — is all but deserted.

Broad boulevards are unimpeded by traffic in the new district, called Kangbashi New Area. Office buildings stand vacant. Pedestrians are in short supply. And weeds are beginning to sprout up in luxury villa developments that are devoid of residents.
. . .
(p. A4) As China’s roaring economy fuels a wild construction boom around the country, critics cite places like Kangbashi as proof of a speculative real estate bubble they warn will eventually pop — sending shock waves through the banking system of a country that for the last two years has been the prime engine of global growth.
. . .
Analysts estimate there could be as many as a dozen other Chinese cities just like Ordos, with sprawling ghost town annexes. In the southern city of Kunming, for example, a nearly 40-square-mile area called Chenggong has raised alarms because of similarly deserted roads, high-rises and government offices. And in Tianjin, in the northeast, the city spent lavishly on a huge district festooned with golf courses, hot springs and thousands of villas that are still empty five years after completion.
. . .
In 2004, with Ordos tax coffers bulging with coal money, city officials drew up a bold expansion plan to create Kangbashi, a 30-minute drive south of the old city center on land adjacent to one of the region’s few reservoirs. . . .
In the ensuing building spree, home buyers could not get enough of Kangbashi and its residential developments with names like Exquisite Silk Village, Kanghe Elysees and Imperial Academic Gardens.
Some buyers were like Zhang Ting, a 26-year-old entrepreneur who is a rare actual resident of Kangbashi, having moved to Ordos this year on an entrepreneurial impulse.
“I bought two places in Kangbashi, one for my own use and one as an investment,” said Mr. Zhang, who paid about $125,000 for his 2,000-square-foot investment apartment. “I bought it because housing prices will definitely go up in such a new town. There is no reason to doubt it. The government has already moved in.”
Asked whether he worried about the lack of other residents, Mr. Zhang shrugged off the question.
“I know people say it’s an empty city, but I don’t find any inconveniences living by myself,” said Mr. Zhang, who borrowed to finance his purchases. . . .

For the full story, see:
DAVID BARBOZA. “A City Born of China’s Boom, Still Unpeopled.” The New York Times (Weds., October 19, 2010): A1 & A4.
(Note: ellipses added.)
(Note: the online version of the commentary is dated October 19, 2010 and has the title “Chinese City Has Many Buildings, but Few People.”)

Source of graph: online version of the NYT article quoted and cited above.

“If You Could Choose, Would You Prefer to Live Then or Now?”

(p. 78) ‘Perhaps I have not made myself clear,’ he said. ‘What I’m trying to say is this. You have been alive a very long time; you lived half your life before the Revolution. In 1925, for instance, you were already grown up. Would you say from what you can remember, that life in 1925 was better than it is now, or worse? If you could choose, would you prefer to live then or now?’

Source:
Orwell, George. Nineteen Eighty-Four. New York: The New American Library, 1961 [1949].

By Canadian law, 1984 is no longer under copyright. The text has been posted on the following Canadian web site: http://wikilivres.info/wiki/Nineteen_Eighty-Four

Corruption, Inefficiency, Inflation and Bad Policies Lead to Decline in Foreign Investment in India

Source of graph: online version of the NYT article quoted and cited below.

(p. B1) While inefficiency and bureaucracy are nothing new in India, analysts and executives say foreign investors have lately been spooked by a highly publicized government corruption scandal over the awarding of wireless communications licenses. Another reason for thinking twice is a corporate tax battle between Indian officials and the British company Vodafone now before India’s Supreme Court.

Meanwhile, the inflation rate — 8.2 percent and rising — seems beyond the control of India’s central bank and has done nothing to reassure foreign investors.

And multinationals initially lured by India’s growth narrative may find that the realities of the Indian marketplace tell a more vexing story. Some companies, including the insurer MetLife and the retailing giant Wal-Mart, for example, are eager to invest and expand here but have been waiting years for policy makers to let them.

For the full story, see:
VIKAS BAJAJ. “Foreign Investment Ebbs in India.” The New York Times (Fri., February 25, 2011): B1 & B6.

(Note: the online version of the article is dated February 24, 2011.)

Garbage Landfill Is Home to 80,000 in Payatas

(p. 281) Perhaps you’ve heard of Smoky Mountain, the town-sized garbage landfill in Payatas, outside Manila in the Philippines, that is home to an estimated eighty thousand desperately poor Filipinos who eke out a miserable existence scavenging what others throw away. Eighty thousand people is more than the population of Utica, New York. Entire families have been born at the Smoky Mountain landfill and lived their lives there, amidst squalor, stench, and constant smoke of smoldering trash. In July 2000, about two hundred residents of the Payatas landfill died when a large hill of trash collapsed, burying them under a garbage avalanche.

Source:
Easterbrook, Gregg. The Progress Paradox: How Life Gets Better While People Feel Worse. Paperback ed. New York: Random House, 2004.

Italy’s Dynastic Capitalism “Is Built Around Loyalty, Not Performance”

“Carlo Altomonte, an economist, says that “Italy’s problem isn’t that we have a lot of debt. It’s that we don’t grow.”” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 6) “I know that in the States, all Mediterranean countries get lumped together,” says Carlo Altomonte, an economist with Bocconi University in Milan. “But Italy’s problem isn’t that we have a lot of debt. It’s that we don’t grow.”
. . .
“There is no sense of what a market economy is in this country,” says Professor Altomonte. “What you see here is an incredible fear of competition.”
. . .
FIVE years ago, Francesco Giavazzi needed a taxi. Cabs are relatively scarce in Milan, especially at 5 a.m., when he wanted to head to the airport, so he called a company at 4:30 to schedule a pickup. But when he climbed into the cab half an hour later, he discovered that the meter had been running for more than 20 minutes, because the taxi driver had arrived soon after the call and started charging for (p. 7) his time. Allowed by the rules, but to Mr. Giavazzi, utterly unfair.
“So it was 20 euros before we started the trip to the airport,” recalls Mr. Giavazzi, who is an economics professor at Bocconi University. “I said, ‘This is impossible.’ ”
Professor Giavazzi later wrote an op-ed article denouncing this episode as another example of the toll exacted by Italy’s innumerable guilds, known by several names here, including “associazioni di categoria.” (These are different from unions, another force here, in that guilds are made up of independent players in a trade or profession who have joined to keep outsiders out and maintain standards, as opposed to representing employees in negotiations with management, as a union might.) Even baby sitters have associations in Italy.
The op-ed did not endear Professor Giavazzi to the city’s cab drivers. They pinned leaflets with his name and address at taxi stands around Milan and for the next five nights, cabs drove around his home, honking their horns.
“This is a country with a lot of rents,” says Professor Giavazzi, sitting in his office one recent afternoon, . . . “You need a notary public, it’s like 1,000 euros before you even open your mouth. If you’re a notary public in this country, you live like a king.”
For Mr. Barbera, as is true with every entrepreneur here, the prevalence and power of Italy’s guilds explains much of what is driving up costs. He says he must overspend for accountants, lawyers, truckers and other members of guilds on a list that goes on and on: “Everything has a tariff, and you have to pay.”
. . .
Italians, notes Professor Altomonte, are among the world’s heaviest consumers of bottled water. “Do you know why? Because the water in the tap comes from the government.”
The suspicion of Italians when it comes to extra-familial institutions explains why many here care more about protecting what they have than enhancing their wealth. Most Italians live less than a mile or two from their parents and stay there, often for financial benefits like cash and in-kind services like day care. It’s an insularity that runs all the way up to the corporate suites. The first goal of many entrepreneurs here isn’t growth, so much as keeping the business in the family. For a company to really expand, it needs capital, but that means giving up at least some control. So thousands of companies here remain stubbornly small — all of which means Italy is a haven for artisans but is in a lousy position to play the global domination game.
“The prevailing management style in this country is built around loyalty, not performance,” says Tito Boeri, scientific director at Fondazione Rodolfo Debenedetti, who has written about Italy’s dynastic capitalism.

For the full story, see:
DAVID SEGAL. “Is Italy Too Italian?” The New York Times (Sun., August 1, 2010): 1 & 6-7.
(Note: ellipses added.)
(Note: the online version of the article is dated July 31, 2010.)

“The clothier Luciano Barbera in his family’s “spa for yarn,” where crates of thread rest for months. Economists fear that such small-scale artisanship cannot sustain Italy’s economy forever.” Source of caption and photo: online version of the NYT article quoted and cited above.

In Greece It Is Illegal for Brewers to Produce Tea

“Demetri Politopoulos at his microbrewery in northern Greece. He says Greek leaders need to do more to make the country an easier place to do business.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 1) DEMETRI POLITOPOULOS says he has suffered countless indignities in his 12-year battle to build a microbrewery and wrest a sliver of the Greek beer market from the Dutch colossus, Heineken.

His tires have been slashed and his products vandalized by unknown parties, he says, and his brewery has received threatening phone calls. And he says he has had to endure regular taunts — you left Manhattan to start up a beer factory in northern Greece? — not to mention the pain of losing 5.3 million euros.
Bad as all that has been, nothing prepared him for this reality: He would be breaking the law if he tried to fulfill his latest — and, he thinks, greatest — entrepreneurial dream. It is to have his brewery produce and export bottles of a Snapple-like beverage made from herbal tea, which he is cultivating in the mountains that surround this lush pocket of the country.
An obscure edict requires that brewers in Greece produce beer — and nothing else. Mr. Politopoulos has spent the better part of the last year trying fruitlessly to persuade the Greek government to strike it. “It’s probably a law that goes back to King Otto,” said Mr. Politopoulos with a grim chuckle, referring to the Bavarian-born king of Greece who introduced beer to the country around 1850.
Sitting in his office, Mr. Politopoulos took a long pull from a glass of his premium Vergina wheat beer and said it was absurd that he had to lobby Greek politicians to repeal a 19th-century law so that he could deliver the exports that Greece urgently needed. And, he said, his predicament was even worse than that: it was emblematic of the web of restrictions, monopolies and other distortions that have made many Greek companies uncompetitive, and pushed the country close to bankruptcy.

For the full story, see:
LANDON THOMAS Jr. “What’s Broken in Greece? Ask an Entrepreneur.” The New York Times, SundayBusiness Section (Sun., January 30, 2011): 1 & 5.
(Note: the online version of the article is dated January 29, 2011.)