The China house of cards - Part II

While increasing unemployment exacerbates the problem for the urban sector, the 1-2-4 problem increases the financial burden throughout the rural sector. China's economists and central planners ignore the existence of the 1-2-4 problem.

The lust for mianzi (or “making face”)

China's leaders continually remind the world of China's economic progress as if China was an inanimate object, rather than representing the mass of humanity making up the trumpeted harmonious society. The grand monuments to central and local government power contribute nothing to China's poor who are there only to provide cheap labour.

The CCP is obsessed with grand visible symbols of size, expense, and grandeur as a projection of its power and wealth. It is the sacrifice to the god of mianzi and supersedes the duty of care of a responsible government to use the windfall revenues from globalisation and the efforts of its low paid people toiling in sub standard conditions to improve the welfare of the population in general.

Beijing officially spent $42 billion preparing for the Summer Olympics, but the real cost will never be known.

This official amount does not include the massive expenditure on the emergency canal for the South to North Water Diversion Project to ensure Beijing had adequate water for the 2008 Games. Nor did it include the economic hardship it imposed on the Hebei and Shanxi farmers, denied irrigation water during the critical growing season. Then there were the unknown hundreds of thousands of underpaid construction workers and many more who remain unpaid, despite their wages being included in the money their bosses received from Beijing.

China's achievements

There is no denying that China can lay claim to a host of the world's biggest, highest, longest, heaviest, extravagant, spectacular, and most ostentatious symbols, which bear witness to Beijing's willingness to go to extremes to project mianzi.

Beijing however, has other major achievements that it is not so keen to highlight and these reflect the CCP's failure to exercise due diligence of care for its population, and failure to recognise the rural and urban poor, without whose enduring hardships and cheap labour, its grand edifices could not have been constructed.

These milestones, to name just a few, include world records for the largest number of polluted cities, most polluted rivers, biggest number of dried up lakes, highest casualty list of pollution related mortalities and debilitating illnesses in adults and children, horrific cancer villages, and of course, the world's biggest wealth gap and the world's major polluter.

Missed opportunities

If the CCP had focused more on the welfare of all China's people and less on its "favoured sons and daughters" and the ostentatious monuments to its own greatness, the consumer society from which it is now seeking to help revitalise the economy, may have become a reality.

How much cash would be available to revitalise China's 2009 declining consumer economy if mianzi was traded back into cash?

China is an enigma

Despite record economic growth and its emerging claim as a global economic, industrial and military power, China remains an enigma.

At a time of global economic crisis, the CCP, claiming five consecutive years of increasing double-digit growth from responsible economic management, demanded a place at the global economic management table to plan the way forward.