When the Chinese Communist Party turns 100, economic challenges appear Business and Economic News

Shenzhen, China – Private education companies that teach extracurricular lessons to Chinese children’s legions are at the crossroads of government because officials want to alleviate pressure on students and the economic burden on families.

Although aimed at private tutoring companies, repression is a symptom of China’s broader systemic problems as the ruling Communist Party turns 100 this week.

Declining birth rates and rapidly aging populations pose problems for China’s future economic growth.

Income inequality, parts of the region’s economy and large gaps in opportunities between rural and urban citizens were highlighted by Chinese President Xi Jinping in his speech at the end of January, when he called the urgent issues the nation needs to address. coming years.

Chinese leaders dismiss the phrase “middle-income trap” – a condition in which a country does not achieve a more developed and higher status quo – but that is where the country may end up if the country’s leaders do not address these cracks.

Xi’s remedies include better income distribution, education, social security, cheap health care, housing, care for the elderly, child support, and quality employment; they are also referred to in the same language. There are many like-minded people who work with most families and young people.

The current structural and political barriers, however, can be overwhelming to deliver on these policies if deeper reforms are not made, beyond individual efforts, such as removing restrictions on the number of children families may have or mandating less homework for school-age children.

They will be expensive and will probably require the richest people in the country to pay higher tax rates, either through property taxes or capital gains taxes. But implementing such policies carries a great deal of risk. Doing it too quickly and capital flight can cause financial system disruptions in the real estate market and cause more harm than good.

And there are other structural barriers. The country’s hukou system links social benefits to the family’s rural or urban hometown, and the over-importance of gaokao (standardized studies) determines whether students can go to college and achieve higher rates of economic success.

Over the last decade, increasing pressure from parents and students has exacerbated the need to reform these systems, halting incomes and embodying social mobility.

This change has led to a variety of social conditions that have been debated in recent months: entanglement – or lying down – with the least possible effort to act and his partner’s philosophy of “involution” – despair or burning. mostly among those working in the 996 work culture, working six days a week from 9 a.m. to 9 p.m.

Sun Liping, a professor of sociology at Tsinghua University, recently wrote in a WeChat account that these conditions mainly affect younger middle-class and white-collar workers who have suppressed expectations. Even after trying hard and working hard, they feel that they have reached a point where there is no chance of a greater and greater risk of falling back.

So there is no need for more children, not even for the child, with housing prices being so high in many cities, and with parents retiring much earlier than most workers in the world. Any additional cost has the potential to throw you off that plateau.

After the government announced that married couples would be allowed to have a maximum of three children, in an effort to increase birth rates, notes appeared on social media that the policy change did nothing to address the costs of raising children. [File: Aly Song/Reuters]

This is a big change in the years after the 1960s and 1970s Cultural Revolution and the period of China’s reform and opening up, the chances of families changing their social status through hard work and education were much higher, especially since the starting point was very low for almost everyone.

“Over time, a new elite created interests,” Imogen Page-Jarrett, a research analyst for The Economist Intelligence Unit in Beijing, told Al Jazeera. “The threshold for raising people on lower incomes in society was much higher.”

Liang Jianzhang, president and founder of the Trip.com reservation site, recently argued that China needs to completely reform its gaokao system, increase education spending and try to achieve universal university education for all its young people. a more complex and innovative economy of the future.

Potential repairs creating more problems

Recent efforts to address some of the pressures Chinese parents and young people face have received a poor response and sometimes a satirical reaction.

The government announced that they could be married couples up to three children, in an effort to increase birth rates, notes appeared on social media that the policy change did nothing to address the high costs of raising children or the economic burden of caring for elderly parents.

Other government policies along the way, such as proposals to ban offline and offline courses at summer vacations, weekends and other out-of-school periods in places like Beijing and Shanghai, only raise other potential issues.

The idea, in theory, is to put pressure on children and give them a real break from school so they don’t burn out until they reach adulthood.

“I think one of the most interesting things about many of these changes at the moment is that all forces have the same and opposite reaction,” said Julian Fisher, one of the founders of Beijing Venture Education Consulting. “When you’re pushing learning centers, you’re pushing the multi-billion dollar industry, which has an impact on human resources and society in the sense that people are hired. [for these tutoring jobs]”.

Falling birth rates and rapidly aging populations pose problems for China’s future economic growth [File: Yan Cong/Bloomberg]

Fisher noted that this can also distress many families, especially when both parents work and may not have access to childcare that is not an educational center. “What are they going to do with the kids in the summer?” he asked, wondering what would happen if the government banned online and offline courses.

“The dismissal of tutors and teachers is likely if the new rules prohibit training on weekends and summer and winter holidays, because training organizations can have a significant drop in revenue, so they can lay off staff and teachers to reduce costs,” director Flora Zhu told Beijing Fitch Ratings corporate research gave it to Al Jazeera.

“In fact, online training organizations are already relying on marketing to attract students [been laying off staff] following stricter government regulations [allowable advertising for] training organizations “.

As China’s leadership becomes more nationalist, in recent months there has been a reduction in the number of study materials aimed at foreign involvement, ownership and high school students in recent months.

“Because of the political importance that Chinese leaders place on education, there are risks that these regulations may increase restrictions on foreign participation in China’s education sector,” Alexander Jipman Koty Dezan Shira & Associates consulting analyst told Al Jazeera.

Some of these are contrary to the necessary reforms in the education sector, and what parents want for their children is a greater opportunity, which is to include many of them in online and offline courses outside of the regular classroom.

Page-Jarrett says China needs more private and foreign sector involvement, which would encourage school improvement and innovation and schooling for more complex economies in the future, no less.

“Mill learning still works a lot in the education system and China worked when it needed a generation of engineers,” Page-Jarrett said. “What China needs now is a staff that can innovate. The education system needs to develop students’ critical thinking. “

It’s not lying down when you’re downstairs …

The need for education spending and reform is even more pronounced for students and parents in rural China, who are quickly falling behind their city peers, who have more opportunities and benefits because they are city-dwellers.

“The difference in the quality of education in rural areas was greater, not necessarily because education in rural areas was worse, but because it became better and more competitive in cities,” Page-Jarrett said. “It’s very difficult for a low-income family to get into a college and they might be able to get into a second or third degree.”

Scott Rozelle, a development economist and director of Stanford University’s Rural Education Action Program, says the “lying” problem is entirely an urban problem.

“When you have a rural hukou, no one is left‘ flat ’,” he told Al Jazeera. “It simply came to our notice then. There is no money for weekend or night classes. No one can take anything for granted. Life and living is everyday. There is no choice with such poor schooling and health care. “

China has serious plans with a program to revitalize rural areas, but so far it has focused mainly on improvements in rural infrastructure and agriculture, and has not tackled schools or rural social mobility.

While hukou policies that allow more movement between rural and urban areas in some parts of the country have calmed down, most of these efforts are linked to “talent acquisition” programs – cities that want to attract the best and brightest, leaving the least learned outside.

If these systemic challenges are not met, what is at stake can become the heel of Chinese Achilles. Social mobility and income inequality will be fixed in the middle-income trap that social friction, economic stagnation and Chinese leaders would like to avoid, but they are not usually mentioned in words.