Video #15 - China: New Administration Faces Business Issues

Tuesday, January 10, 2006

sources | lesson plan

BACKGROUND INFORMATION

During the first week of March, the Chinese government unveiled its new budget, proposing the lowest military spending hike in 14 years. * The information came on the second day of the National People's Congress (NPC). The official reason was to improve people's living standards in an effort to maintain control during the transition in leadership. However, observers believe the real goal is to help those harmed by China's fast pace of economic reform.

The Congress also announced drastic changes in its top-level Cabinet. The state Council's 29 ministries and commissions are expected to be cut to 21 or 22. In the words of premier-designate Wen Jiabao: "We must build up a government with regulated behavior and harmonious operations - (to be) fair, transparent, clean and efficient." A far cry from the Cultural Revolution!

As it continues its capitalist-style market reforms, the Chinese are using a model closer to that of America and other Western nations. It is expected to consolidate trade operations, revamp its economic planning agency and create a new food and drug regulatory administration. It is not, however, embracing multi-party politics.

Hu Jintao, 60, who took over in November as Communist Party general secretary, and his new leadership are focusing on domestic issues such as infrastructure, the environment and "the strategic restructuring of agriculture." China's government has acknowledged it needs to modernize in order to create a friendly climate for international investment.

One of the expected changes is to curtail the state banks' portfolio of non-performing loans. This measure is seen as the first step in listing the strongest institutions on the stock market. Beijing is also expected to grant more licenses to private banks. A new commission will be set up to improve the returns on government-owned assets - and to privatize more state-owned firms.

Another note of progress is the reported election of an unprecedented number of private entrepreneurs as NPC deputies. Sources say these twelve private sector businessmen should place pressure on the new administration to "give more leeway to the non-state firms." It is also expected that private businesses will be allowed to join the telecommunications and infrastructure sectors that have been state monopolies.

China's trade also continues to grow. The government's top economic planner, Zeng Peiyan, announced that China's total trade is expected to increase 7 percent in 2003. However, this is a significant decrease from last year--and an embarrassment for a country eager to show that its economic reforms are paying off.

One cloud on the trade front is the planned implementation of Article 23-which would outlaw criticism of the Chinese government by residents of Hong Kong. Mevrouw Elly Plooij-van Gorsel, Chair of Chinese Relationship Committee of the European Union says, "The implementation of Article 23 would be a disaster for the economic growth of HK. HK people living under the rule of such law would be subject to grave danger. Article 23 stipulates that anyone who contacts people who violate the subversion law, yet who fail to report them to the authorities would be construed as violating the law, and will be punished. If anyone for any reason gets in touch with the wrong person, they may be accused of breaking the law. We all know that this implies greater risk, and higher wages. For many firms, sending their employees to work in China is very difficult because people sometimes feel that working in China is a sort of punishment. Therefore, the firms have to pay higher wages to persuade their employees to move to china to work. If Article 23 becomes law, people will think working in HK is no different than working in China."

*However, US military estimates put China's actual military spending at four times the official figure.

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SOURCES

"'Consultation Period' For Article 23 Expires - 190,000 Signatures Opposing Article 23 Submitted to Hong Kong Government." Clearwisdom.net, December 26, 2002. "Hong Kong: Article 23 Legislation - the potential for abuse." Amnesty International Press Release, December 9, 2002 www.amnesty.org

Kurtenback, Elaine, "China's new budget targets those left behind by economic reform." Associated Press, March 5, 2003.

Lam, Willy Wo-Lap, "China to convince West of reform." CNN.com, March 2 2003. http://edition.cnn.com/2003/WORLD/asiapc/east/03/02/china.rpc.preview

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LESSON PLAN

GRADE LEVEL/SUBJECT:

10-12 grade Economics, International Relations, World History, Geography, International Baccalaureate Programs (IB), Current Events.

PURPOSE:

To present activities to be used in a variety of classroom situations in order to enhance student understanding of the Asian economy and its significance globally.

OBJECTIVES:

Students will be able to:

1. Locate The People's Republic of China and Hong Kong on a map of Asia.
2. Describe the way the Chinese government is organized.
3. List the key officials of the current Chinese government.
4. Compare and contrast the old government practices in China with the newly instituted policies.
5. Speculate on the future policies of the Chinese government internally and internationally.
6. Evaluate Hong Kong's future as a Special Administrative Region.

MATERIALS:

1. Background information provided.
2. Resources on The People's Republic of China available at your school's Media Center and the Public Library System in your area.
3. Background information available through Internet "search engines"
4. www.chinavista.com
5. www.chinapages.com
6. www.basiclaw23.gov.hk/english/index.htm

ACTIVITIES:

May be assigned as group activities or as individual tasks. They may also be designed as preparation for related presentations either by individuals or groups.

1. Illustrate The People's Republic of China, Beijing and Hong Kong on a map of Asia.
2. Draw a diagram illustrating the organization of the Chinese government.
3. Create a Venn Diagram comparing former Chinese policies with current ones.
4. Write biographical profiles of the major players in the current Chinese government.
5. Use the information gathered above, to evaluate the possible changes in Chinese government policy and the effect they will have internationally and domestically.
6. Research the most recent news regarding Article 23 and its implementation in Hong Kong. Write an editorial about your views regarding the effects of this measure on the economic future of the Special Administrative Region.

EVALUATION:

Individual assignments should be graded by the teacher using established criteria.

Group activities, presentations and projects may be evaluated by teachers and students using the following criteria and scale: Content 1 = Superior (A) Creativity 2 = Excellent (B) Clarity 3 = Good (C) 4 = Fair (D) 5 = Poor (F)

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