Madam, - Dominic Coyle (May 13th) writes: "On the positive side, China offers a market of 1.3 billion consumers for Irish businesses". This is presumably some kind of compensation for the fact that Western manufacture is doomed to compete with China's labour costs, roughly one-thirtieth of Europe's.
When will commentators wake up to the facts behind the Chinese economic myth? Of China's massive 1.3 billion population, roughly 900 million are landless peasants with an average income around $300 per annum. Premier Wen's statement that more than 30 million Chinese live below the poverty line is a similarly optimistic distortion of the facts. A recent UN survey concluded that nearly 350 million Chinese live below the UN "absolutely poverty line" of $150 a year, rather more than India with 250 million.
Before an economy becomes actively consumer driven, as in the West, average discretionary spendable income needs to top $5,000 a year. Even in China's rich cities, this figure is still around $1,500.
A major survey of China's economy in a recent Economist and a similar report in Business Week, showed just how far the dream and the realities of China's economic miracle diverge. A massive 48 per cent of China's GDP is accounted for by private savings. Indeed, it is the private savings of the Chinese which keep the unregulated banks afloat, banks which, by government stipulation, currently provide an alarming 45 per cent of non-performing loans, mainly to the moribund state-owned enterprises (SOEs).
On the unemployment front, China needs to provide more than 12 million jobs annually, just to keep up with population growth, while also trying to strip down the bankrupt SOEs which swallow such a huge proportion of China's capital. Approximately 35,000 jobs are lost from the state sector every week. Besides which, the official unemployment figures never include the vast mass of "surplus agricultural labour," landless peasants who have migrated to the cities in the hope of work, now estimated to be around 250 million people. Premier Wen said that it will take 10 generations for China to become a truly modern nation. This means a wait of 300 years for rule of law, regulated banking, democracy and human rights? - Yours, etc.,
ANTHONY O'BRIEN, Tibet Support Group Ireland, Dublin 4.