China Part II

Besides the things I mentioned in my first post, I want to discuss some of the other things I observed in China. In particular, I wanted to discuss some of the larger social trends I was observing there.

What was perhaps most striking was the similarity between the conversations I was having with my friend in Shanghai and the ones I was having with my friends in New York. Both groups feel fundamentally squeezed between their incomes and the harsh financial realities of their cities. Housing, or at least owning it, is more or less unaffordable for both groups (renting is no joy ride either). Additionally, the Shanghaiers felt especially squeezed with respect to school tuition. All of them want to send their children to expensive private schools, where their children will receive extensive English language instruction and presumably have a huge advantage relative to their publicly educated peers. Unfortunately these costs seem make up 25% to 50% of their salaries, and yet they remain committed to doing it. New York also has an absurd tragicomedy with respect to education, but for the most part the individuals involved seem to have the means to pay - there just aren't enough spots at sufficiently elite institutions. Regardless of this difference, it seem that everyone, whether in Shanghai or New York, seems to be suffering from the same general malaise - salaries that are too low to pay for even modest housing, and an intense monomania for elite education.

I'm getting old and perhaps jaded enough to see that these issues aren't really going to be solved any time soon. We're probably stuck with a broken housing market and wild education inequality for at least the next decade or so, at least in the U.S.  While the problem has grown much, much more quickly in the China, the pace of change there, both in the economy and in government policy, remains much higher. I'm potentially optimistic that perhaps housing affordability will be addressed in China by 2030, which is an optimism I don't share for New York (although maybe for other parts of the country).

But beyond this shared tragedy, the gap between lifestyles in China and the U.S. just seems smaller and smaller each time I go. Make no mistake, it is still quite large, and it isn't hard at all to go to rural areas where the gap is absolutely immense, but it is definitely closing. China is starting to feel like an increasingly institutionalized country where life is increasingly predictable. It's hard to see this as anything but a good thing for Chinese people. It may come with drawbacks, not the least of which may be a more limited ability for the government and economy to respond the some of the challenges I've already discussed, such as inequality, housing and pollution. But modern economies live and die by institutions and the ability of individuals, governments and corporations to understand and predict how things work and make plans for the future.  People and businesses need to know they won't be hassled every time they try to do something, and governments need to know that policies are being enforced and working as intended. This isn't to endorse everything going on in China now (far from it) but it is to say that the economic development going on there isn't just skin deep. China's boom isn't just bridges and factories - society itself is changing in ways that, I think at least, are fundamentally improving people's lives.

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