The Culture that is China: Pimp My Ride Edition

My latest research paper (downloadable here) with my friend and colleague Daniel Hicks and my grad student Weici Yuan, studies how skewed sex ratios in China help promote conspicuous consumption in unmarried Chinese men.

It seems impossible, but there are parts of China where there are 132 men for every 100 women.  YIKES! Thats a heck of a policy, that one child policy (especially when combined with strong preferences for male children).

We study automobile purchases and use a diff in diff in diff approach to identify the effect. Here is the most basic results with no controls:

ddd graph

So going from the quartile with the most balance sex ratios to that with the most skewed raises the car spending of unmarried men by 7200 RMB or around $1200.

We also show that this status competition results in increased purchases of cars with lower gas milage and higher vehicle weight, meaning that it also creates negative externalities.

“So we finish 18, and he was gonna stiff me!”

Bill Murray sure could have told China a thing or two about the perfidiousness of the Dalai Lama.

Lama 14 epically trolled China last week by threatening not to be reincarnated when he dies.

This threw a Lama-sized monkey wrench into China’s plans to control the new-Lama-seeking machinery and install a 15th Lama who might be more amenable to their Tibet policy.

Like an earnest internet rookie, China rose to the Lama’s trolling by saying 14 had (a) no right not to reincarnate, (b) no control over whether he reincarnates or not, and (c) was a heretic and traitor to true Buddhism.

I just love how Lama 14 has managed to again reveal to the world that the Chinese government is totally nuts. If there is a Lama 15, he/she will have big sandals to fill.

Home is where the heart (and nagging parent) is, Chinese edition

China’s most popular search engine, Baidu, has created a heat map demonstrating the enormous exodus of people from the big cities to their hometowns for the New Year.  To give you an idea of the magnitude of the migration, even though the New Year doesn’t start until Thursday, 80 million people started heading home on Monday.

The Telegraph reports that “If someone uses a Baidu app in Beijing in the morning, then pings from the southwestern city of Kunming in the evening, a new trip will be registered and a straight line added from Beijing to Kunming. Lines glow white-hot during the biggest travel days of the holiday, which officially runs from Wednesday through Feb. 24 but unofficially includes many days on either end. The period of heightened travel is considered 40 days long.”

Here is a picture of Monday’s migration:

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Here is the link to the real time map, for those of you who’d like to try your luck (I’ve tried four times and the site seems overwhelmed by visitors).

Not everyone is so anxious to get home, however.  The Washington Post, in an article titled “For unmarried, Chinese New Year brings dreaded parental nagging,” tells of the dread many unmarried Chinese feel about the prospect of going home.  Apparently there are manuals for how to deal with nagging parents and even rent-a-boyfriend businesses for particularly desperate young folk.

“A toxic blend of governance failures, corruption & criminality”

Holy cow!  I know that official delegations often use the excuse of a foreign trip to go on a huge shopping spree, but usually they stock up on electronics or clothing.  The Chinese delegation, on a 2013 trip to Africa, decided to go binge shopping for ivory tusks.  They bought so much that they managed to double the price of poached ivory during their stay!

Slate reports that “China has long been accused of fueling the illegal ivory trade in Africa. A new report out this week from London-based NGO Environmental Investigation Agency says the illicit trade implicates even the highest levels of the Chinese government.”

I guess this news won’t exactly help to dispel those rumors. The NY Times as a superb article about the “toxic blend of governance failures, corruption, and criminality” that has come together to decimate Tanzania’s elephant population.

At a time when the Chinese government is trying to prove itself a responsible state actor that is serious about rooting out corruption and abiding by international law, the organization’s report describes a devastating environmental cost of China’s geopolitical rise: Chinese diplomats and military personnel, it says, are colluding with corrupt Tanzanian officials and Chinese-led crime syndicates that send huge amounts of illegal ivory to China, reducing Tanzania’s elephant population by half.

In the past four years, Tanzania has lost more elephants to poaching than any other country, an estimated 10,000 in 2013 alone, according to the organization — an average of about 30 elephants slaughtered each day. The elephant population in Tanzania’s Selous Game Reserve, a 19,000-square-mile wilderness larger than Switzerland, plummeted by 67 percent to 13,000 in 2013 from 39,000 in 2009.

Those numbers are shocking and heartbreaking.  Looks like the Chinese effect in Africa is even worse than I thought.

 

“I got sunshine on a cloudy day”

The BBC recently reported Chinese President Xi Jinping’s disturbing comments about art to a conference in Beijing of “authors, actors, scriptwriters and dancers.” While the Communists have always kept artists on a strict, “socialist” leash, in recent years Chinese artists have increasingly pushed the boundaries of what the state will allow in artistic expression.

Now the President has made it clear what he considers art to be, and not surprisingly there is no overlap between what his and my definition.  I’m sure much of the audience felt the same.  Here are some of his comments:

“He told artists, authors and actors that their work should present socialist values and not carry the “stench of money”.

Fine art works should be like sunshine from blue sky and breeze in spring that will inspire minds, warm hearts, cultivate taste and clean up undesirable work styles.

Works of art should present patriotism as the main theme and foster “correct” viewpoints of history, nationality and culture, as well as strengthen pride in being Chinese.

Yikes, this sounds like some terrible art.

Neither West nor East (will bail out Mugabe)

Good old Bobby Mugabe is back to his old loveable ways. Having freed himself from partnership with MDC, he can now get back full-time to the important business of running his country into the ground.

It’s looking like he’ll have to do it without the help of China. Mugabe had been touting $30 billion in Chinese aid/investment, but the actual number might turn out to be $0.00.

I don’t see how Mugabe’s plan didn’t work. After all, he went and found a Zimbabwean named Patrick Chinamasa, appointed him finance minister, and sent him to Bejing to pass the hat.

What could possibly have gone wrong?

 

New Chinese export: Ghost towns!

OK, technically it’s FDI but still……

Here’s a great photo essay on a Chinese built ghost town in Angola.

People do you think a cock-up like this has anything to do with the language of business there being Portuguese? Or with Chinese FDI aimed at enabling the election pledges of local leaders? At least the Chinese are keeping up the old colonial tradition of resource extraction: the construction costs are being paid by Angola with oil!

Has China run out of places to built ghost towns domestically and thus must resort to foisting them on developing countries?

The essay claims that there is an operating school in the ghost town, but all the students are bussed in because no children actually live in the ghost town.  Why would they? Ghost towns are scary.

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An attitude adjustment

Howard French, once a New York Times journalist and now an associate professor at Columbia has a great new post on AfricaPlus called “The China-Africa Convergence: Can America Catch Up?”  He wrote one of my favorite books on Africa a couple of years ago called A Continent for the Taking: The Tragedy and Hope of Africa.  I’d highly recommend it for anyone interested in development.

He has been working more on China (and the China-Africa connection) these days and has a new book coming out in 2014 called “China’s Second Continent: How a Million Migrants Are Building a New Empire in Africa.”  He makes some great points in the blog post on the issue of Chinese versus American attitudes about Africa.  He writes:

“More than a million Chinese have moved to Africa in the last decade, largely because they see the continent as an arena of almost limitless opportunity. This holds true from big company executives to mom and pop entrepreneurs from China’s inland, second tier cities. Americans, meanwhile, despite their far deeper historical associations with the continent, including 13% of the population that traces its ancestry to Africa, cling to deeply engrained attitudes toward this part of the world, as a place of war, of misery, of strife, etc. For this reason, and because we cannot get over a long-running sense of Africa as a place to be aided, we are ill equipped to see or appreciate the opportunities that Africa offers.”

He goes on to note that American embassies across Africa are shutting down their “commercial sections, which historically have researched African economies and provided helpful information and contacts to American businesses looking for opportunities.”

He makes a good argument that the US needs an attitude adjustment about Africa and I couldn’t agree more.

 

The World Bank: Unmatched at “Delivering” BS

People this is almost self parody by Jim Kim and his bank. Filling the investment gap didn’t work, getting the prices right didn’t work, increasing school enrollment rates didn’t work, fighting corruption didn’t work, so now the Bank wants to practice “the science of delivery”.

Deep in the West Village, in an obscure hipster coffee shop, Bill Easterly’s head must be exploding.

Deliverology seems to be a fancy way of saying “just do it”. Here’s the Head Deliverologist, Sir Michael Barber:

“It is a very simple process, but if you go through things rigorously you will make progress. What are the priorities for the World Bank Group as a whole? Kim has been clear: ending poverty and achieving shared prosperity.  What does that mean in a particular country? . . . At the moment there is insufficient connection between the World Bank headquarters and aspirations and what happens country by country. That is the delivery chain. How do you need to change the delivery chain — the line of sight between the front line and here [Washington]? Kim is aware of that as a major issue.” 

Can I get an LOL? What a steaming pile of jibberish.

And what exactly is Jim Kim doing to enact change at the Bank?

Kim also has tried to tame the bureaucracy by first creating more of it. He’s set up the Office of Change Management, created a new vice president’s post to run it and appointed 30-year bank veteran Pamela Cox to the job. She is now coordinating the work of perhaps a dozen task forces.

Ah yes, the office of change management. Good move. Nothing creates change in a hidebound bureaucracy like more bureaucracy.

The plain truth is that the World Bank has been a colossal failure when it comes to development or even poverty alleviation (Grandpa Deng’s market reforms in China have done more for poverty reduction than all the WB programs over the same time period combined).

Embracing pseudo-scientific mumbo-jumbo will neither change or hide that fact.

The poverty of World Bank poverty reduction

The World Bank’s latest PR campaign is that “for the first time in history” we can “eliminate extreme poverty” (for the hubris of this claim and the many times it’s been said before see here).

Lost in the fine print is the disclaimer that “extreme poverty” is defined as $1.25 / day.

And there has been some progress on that front (clic the pic for a better image):

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However, since virtually all the decline from 1981 to 2009 is from China, I’d give the credit largely to “state capitalism” and not to any top down multilateral agency development program.

And, if we raise the bar on extreme poverty to, say, $2.00 per day, the situation is far from rosy (clic the pic for a better image):

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At $2.00 China’s progress is not as great, India is regressing, as is SSA and overall, the number barely budges in the last 25+ years.

So, yes, there are a lot fewer people under the $1.25 level today than in 1981, which means it’s easier to lift the rest of them. However, in my opinion, the World Bank will have very little to do with any of the actual lifting.

Overall though, the number of very poor people living on less than $2.00 is rising outside of China, and China’s progress here is not large enough to drive the global number down much at all.

No wonder China feels like it can push the Bank around.  If it wasn’t for China, the Bank couldn’t make up ANY arbitrary poverty reduction statistics to rationalize their continued existence. Even with the Chinese miracle, the Bank has to be very selective in picking a number to make it look like things are improving at the global level.

The graphs come from here, and the hat tip goes to “Mr. Inequality”, @BrankoMilan.