:00:02. > :00:12.years of unpaid overtime. Those are the headlines. It is time for
:00:12. > :00:19.
:00:20. > :00:22.HARDtalk. 2012 is the Chinese Year of the Dragon and Chinese workers
:00:22. > :00:24.certainly seem to have fire in their belly - there's growing
:00:25. > :00:33.discontent amongst the workforce whose labour fuelled the country's
:00:33. > :00:36.economic miracle. They're angry that export-led growth has largely
:00:36. > :00:46.passed them by whilst filling state coffers and enriching some beyond
:00:46. > :00:48.
:00:48. > :00:52.their wildest dreams. My guest is Cheng Siwei, one of China's most
:00:52. > :01:02.influential economists. How much of a threat is economic uncertainty
:01:02. > :01:06.
:01:06. > :01:15.and social unrest to China's prosperity and stability? Cheng
:01:15. > :01:21.Siwei, welcome to HARDtalk. There is a Chinese saying that a rising
:01:21. > :01:25.tide does not lift all boats. That is what has gone on in China. You
:01:25. > :01:35.have had a fantastic growth rates for many years, but the benefits
:01:35. > :01:36.
:01:36. > :01:41.have been very uneven. Yes. But what is your question? What do you
:01:41. > :01:50.think of that? The benefits have been very uneven and that is not
:01:50. > :01:54.sustainable, is it? On the one hand, yes. The gap between the rich
:01:54. > :02:00.people and the poor people is growing. On the other hand, we are
:02:00. > :02:09.taking measures to narrow this gap. That is a very short answer. What
:02:09. > :02:14.are the authorities doing? Let's build a bit of a picture. Let's
:02:14. > :02:22.start with the 150 million migrant workers who have left rule areas in
:02:22. > :02:26.China to work in the cities. They suffer terrible discrimination and
:02:26. > :02:36.they are getting increasingly restless, what can you do about
:02:36. > :02:38.
:02:38. > :02:47.that? Why is this situation allowed to exist? Actually, I think the
:02:47. > :02:54.situation is improving. The migrant workers' conditions have been
:02:54. > :03:03.improving after the labour contract. Certainly, they do not get the same
:03:03. > :03:10.salary as people in urban areas, but their income is growing. Do you
:03:10. > :03:16.accept that they have been exploited? When some migrant
:03:16. > :03:26.workers work for $70 a week, working 70 hours a week, that is
:03:26. > :03:27.
:03:27. > :03:33.exploitation, can you accept that? Actually, according to labour law,
:03:33. > :03:40.they only work eight hours a day. Five days a week. If they work over
:03:40. > :03:47.time, there should be over pay. can tell you, on BBC Radio if we
:03:47. > :03:53.have carried a report about migrant workers, one told us he was paid $1
:03:53. > :04:00.an hour and he worked 70 hours a week. He was not the only one.
:04:00. > :04:10.not talking about individual cases. I would like to tell you this is
:04:10. > :04:15.
:04:15. > :04:21.sometimes a bias towards migrant workers within China. On average,
:04:21. > :04:26.the migrant worker's income increased 5-8 % last year. That is
:04:26. > :04:35.according to statistics. At the heart of the problem for the
:04:35. > :04:42.migrant workers, is the system you have had in China since 1958. It is
:04:42. > :04:48.called the Fuku system. It means when migrant workers leave their
:04:48. > :04:53.villages to work in the cities, they find they have no access to
:04:53. > :05:02.healthcare, housing, education for their children. They are treated
:05:02. > :05:09.like second-class citizens. They find they cannot live properly in
:05:10. > :05:18.the cities. Tell us why the system continues? I would like to tell you
:05:18. > :05:24.this year we are constructing the renting house for those migrant
:05:24. > :05:33.workers. We have started construction for a 10 million
:05:33. > :05:43.houses. To improve housing for migrant workers. Their children can
:05:43. > :05:43.
:05:43. > :05:48.be accepted in schools. In middle schools. Yes, I acknowledge the
:05:48. > :05:57.situation is not so good. But we are improving, that is what I want
:05:57. > :06:02.to tell you. You are improving, but the system continues in China.
:06:02. > :06:07.There is a new book coming out this year, core Chinese whispers, about
:06:07. > :06:11.Chinese migrant workers, when I walk into the Chinese workers slums
:06:11. > :06:17.and neighbourhoods, five minutes from the financial centre and
:06:17. > :06:23.shopping malls, many ask me, we live mac under the same sky, why
:06:23. > :06:27.are we not entitled to the same rights? They are segregated from
:06:27. > :06:33.the urban dwellers, tens of thousands of migrant children are
:06:33. > :06:40.left without schools and nurseries. In China, two worlds exist in
:06:40. > :06:48.parallel. That is the kind of country that you live in. Actually,
:06:48. > :06:57.as I told you. Their income is increasing. Certainly they cannot
:06:57. > :07:07.compare with the rich people in the urban areas. One example, now you
:07:07. > :07:21.
:07:21. > :07:31.hire a house made in Beijing, one year ago it would have been --
:07:31. > :07:39.1,500 RMB. Now, the income of the migrant workers is increasing. You
:07:39. > :07:49.can look as sadistic -- statistics, certainly we need to improve living
:07:49. > :07:50.
:07:50. > :07:56.conditions. But it is not easy to move people... The urbanisation is
:07:56. > :08:04.parallel with industrialisation. Moving people to the urban area is
:08:04. > :08:08.a must, but it is not a simple question. We have to provide them
:08:08. > :08:15.jobs, we have to provide them incomes and provide education for
:08:15. > :08:20.their children and housing. That is what the government is doing.
:08:20. > :08:28.government has recognised there is a problem. You have improved wages,
:08:28. > :08:38.the minimum wage is being raised in several provinces in China. Are the
:08:38. > :08:42.
:08:42. > :08:52.authorities... In 22 provinces we have linked the minimum salary with
:08:52. > :08:52.
:08:52. > :09:00.inflation. That isn't about 32 provinces in China... Are the
:09:00. > :09:09.authorities in China panicking? We saw so many strikes all over China,
:09:09. > :09:13.factory workers making shoes, striking over pay and redundancies.
:09:13. > :09:20.Do the authorities acknowledge they have a big problem on their hands?
:09:20. > :09:27.The migrant workers are saying, we have had enough. Certainly. The
:09:27. > :09:37.strike is a warning for the government. Just like in the
:09:37. > :09:40.
:09:40. > :09:47.Western world. I do not think it is just in China. Actually, the strike
:09:47. > :09:52.reminds us will need to improve the conditions of the migrant workers.
:09:52. > :09:57.That is why we are taking the measures. It is not just the fact
:09:57. > :10:02.they are striking, of course they are in many parts of the world, it
:10:02. > :10:08.is the fact that this represents a huge challenge to the governing
:10:08. > :10:18.Communist Party in China, that is something that could have very
:10:18. > :10:19.
:10:19. > :10:22.severe consequences in your country. Well, that is why we are
:10:23. > :10:31.constructing a harmonious society. We will narrow the gap between the
:10:31. > :10:37.rich and the poor. We bought a lot of effort to improve the conditions
:10:37. > :10:41.of the poor people in the urban areas. You have talked about the
:10:41. > :10:50.gap between rich and poor, here you have this governing Communist Party
:10:50. > :10:54.in China, it was said many years ago, to get rich is glorious, you
:10:54. > :11:04.have one million multi-millionaire as in China. People buy Rolls Royce
:11:04. > :11:05.
:11:05. > :11:13.cars like never before in China. What do people say about this gap?
:11:13. > :11:20.He also said, after part of the people get richer, they should help
:11:20. > :11:30.the poor people. That is what they are doing now. If you are comparing
:11:30. > :11:31.
:11:31. > :11:37.with the present age of rich people, they are very small amount in China.
:11:37. > :11:46.But because we have a big population the number is quite big.
:11:46. > :11:52.They have the right to enjoy their better life. It is not just the
:11:52. > :12:02.migrant workers, is it? Who are unhappy and challenging the
:12:02. > :12:02.
:12:02. > :12:07.authorities. You have got the rural dwellers, we have seen protests by
:12:07. > :12:14.them, especially in areas Redland has been lost to property
:12:15. > :12:20.developers. Very little compensation. 3 million farmers
:12:20. > :12:24.every year in China lose their land to development. We have seen the
:12:24. > :12:31.story were they barricaded themselves against the police. That
:12:31. > :12:37.is something you have to take notice of? Yes. There are some
:12:37. > :12:47.cases. Generally speaking, people's incomes in the rural areas are
:12:47. > :12:51.
:12:51. > :13:00.increasing. Also, we are trying to help the people in the rural areas
:13:01. > :13:08.to improve their lives. There are some cases because of the corrupted
:13:08. > :13:18.officials... They do not behave according to the law. Actually,
:13:18. > :13:26.
:13:26. > :13:31.sometimes they... Individual cases cannot be proved of the whole
:13:31. > :13:37.situation. It is not just this village and because of corrupt
:13:37. > :13:42.officials, one professor, a land expert, said corrupt officials are
:13:43. > :13:46.to be blamed but the problem is more basic. Because land is
:13:46. > :13:53.collectively owned in China and farmers have no right to sell the
:13:53. > :14:02.patches of a lease. That is an additional problem. Actually, this
:14:02. > :14:12.is different. They have their own small space of land for their
:14:12. > :14:18.
:14:18. > :14:22.housing. Collective is for most of the land... That is the systematic
:14:22. > :14:31.arrangement. Now we have legislation for the ownership price
:14:31. > :14:40.of the land... If the village official wants to sell the land,
:14:40. > :14:50.they have to get the approval from the committee, from the conference
:14:50. > :14:54.
:14:54. > :14:58.I am trying to get an impression of what is happening. Each time, you
:14:58. > :15:05.say that the officials know what is happening and are doing something
:15:05. > :15:10.about it. So let me try again. In one of northern village, members of
:15:10. > :15:15.a middle class community went on protest. They were protesting
:15:15. > :15:20.against the fact that a chemical plant was being built without their
:15:21. > :15:25.knowledge. They were concerned about toxic city -- toxicity and
:15:25. > :15:31.the authorities that down and closed the plant down. But this is
:15:31. > :15:35.another challenge to the authorities by people power. That
:15:35. > :15:41.is the point I am trying to make - that authorities are being
:15:41. > :15:51.challenged on several fronts. How worrying is that to them, in your
:15:51. > :15:51.
:15:51. > :15:56.opinion? I think that this is normal because people want to
:15:56. > :16:02.exercise their rights and understand the situation. If there
:16:02. > :16:09.is an environmental problem, they must be aware of the consequences
:16:09. > :16:19.of that kind of construction. In this case, they protested and
:16:19. > :16:19.
:16:19. > :16:26.finally they won the case. That proves that we, the government,
:16:26. > :16:35.take people's opinions into consideration. OK. You have talked
:16:35. > :16:43.about... This has not only happened in that one area but in others as
:16:43. > :16:46.well, in the same kind of instance. You have talked about the fact that
:16:46. > :16:52.there has been battered urbanisation in China. What took
:16:52. > :17:00.many decades in other countries happen very quickly in China. Last
:17:00. > :17:06.year, 50% of the appellation were classified as the urban dwellers
:17:06. > :17:12.compared to in 1982 -- of the population. However, you have
:17:12. > :17:16.severe problems in China. Cities have bad infrastructure. There are
:17:16. > :17:25.problems with a migrant workers that we have already talked about.
:17:25. > :17:32.Chinese society is in many ways currently under threat. Well cover
:17:32. > :17:37.every society in every country is under threat in one way or another.
:17:37. > :17:42.But I do not think that China is the most at threat or that this is
:17:42. > :17:51.the most frightful China. As I have said, we are taking measures to
:17:51. > :17:56.improve the situation. Also, this situation has already improved.
:17:56. > :18:01.have made that point but I want to give you one clear example looking
:18:01. > :18:11.at the type of society you have made in China. Last year, there was
:18:11. > :18:12.
:18:12. > :18:22.the case of a top bloke in Guandong province, who was knocked over by a
:18:22. > :18:28.
:18:28. > :18:33.van 18 -- and 18 passes by walked past and nobody helped her. What
:18:33. > :18:38.was your reaction when you heard about this case? What does it tell
:18:38. > :18:45.you about Chinese society today? Yes, my reaction was that we have
:18:45. > :18:54.got to pay more attention to this social problem. But as I have said,
:18:54. > :19:03.China is a country with 1.4 billion people. If you compare China with
:19:03. > :19:09.your country, there is a great deal of difference. If you take one
:19:09. > :19:15.special case in your country, it would be amplified tenfold in China.
:19:15. > :19:22.But if you compare with China or India, you can see this may be the
:19:22. > :19:28.same situation. So I do not think you can take this... I can think of
:19:28. > :19:34.much more individual cases thank you will know. But just to finish
:19:34. > :19:38.briefly on this particular point. The Communist Party official from
:19:38. > :19:43.Guandong province said that the fact that a small child was allowed
:19:43. > :19:48.to bleed to death on the pavement meant that we should look into the
:19:48. > :19:51.ugliness within ourselves with a dagger of consciousness and bite
:19:51. > :19:57.the soul searching for that. Has this length to China saying that we
:19:57. > :20:02.have got to find values in our modern society - whether it is
:20:03. > :20:11.derived from Confucianism or whatever? Has its lead it to that
:20:11. > :20:21.kind of soul searching? Yes because the Guandong province recently had
:20:21. > :20:26.
:20:26. > :20:29.a problem in the land. Now they have a deputy secretary of the
:20:29. > :20:35.profits leading the way in solving this problem. That means we have
:20:35. > :20:42.got to pay my attention to this kind of problem from the very
:20:42. > :20:47.beginning. -- pay more attention. Not to develop and ferment it
:20:47. > :20:51.further. Let us look to the economic future of China. Chinese
:20:51. > :20:57.growth has been very export oriented. But because of rising
:20:57. > :21:01.labour costs in China and also reduced demand for your products
:21:01. > :21:10.because of the global downturn, this is causing problems. Growth
:21:10. > :21:19.will still be more than 80% in 2012 compared to 9% last year. -- 8%.
:21:19. > :21:26.How concerned are you about the basis of your economic miracle?
:21:26. > :21:34.China's economic slowdown. There is no doubt about that. In 2011, we
:21:34. > :21:44.expanded 9.2%. This yet, maybe 8.5%. The reason is mainly come from the
:21:44. > :21:47.
:21:47. > :21:57.Western world because the foreign demand will be reduced because of
:21:57. > :21:59.
:21:59. > :22:06.excess of liquidity. The petroleum prices are still high and low
:22:06. > :22:15.interest rates in the Western world will cause inflation for developed
:22:15. > :22:20.countries and developing countries. Finally, these countries are
:22:20. > :22:28.leveraging. They will withdraw their investment from China and
:22:28. > :22:32.others, other developing countries. These external regions -- these are
:22:32. > :22:39.the external reasons for the economic slowdown. Internally, we
:22:39. > :22:46.still have the problem of the oversupply of money, inflation, and
:22:46. > :22:53.also we have got to change our development pattern from export and
:22:53. > :23:01.investment Orient and to relying more on domestic consumption. That
:23:01. > :23:06.is what we are doing this year. right, finally, 2012 is the year of
:23:06. > :23:11.the dragon. For the Chinese, that is supposed to be a good omen. His
:23:11. > :23:16.2012 going to be the year when we see dramatically reduced growth and
:23:16. > :23:26.increasing instability in the country? Or is this going to be a
:23:26. > :23:27.
:23:27. > :23:32.good ear for China? -- could it here. I will say that 2012 will be
:23:32. > :23:41.a difficult year for our country because the economy is slowing down
:23:41. > :23:48.and because inflation is staying high. But what we are doing is, by
:23:49. > :23:58.working hard to change our development pattern by relying more
:23:59. > :24:00.