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