Is there no good news from China?

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With its economy slowing down year after year, what other bad news is coming out of China nowadays?  Let’s look at two more.

China’s rivers are going dry and dirty.  Its northern provinces receive rainfall that is less than 8 percent of the world average, and these are where two-thirds of China’s farmland are located.  In the more tropical southern provinces, irrigation that provides for 70 percent of China’s grain, are rapidly falling victim to increasing urbanization.  The mighty Yangtze is practically biologically dead, as it absorbs 40 percent of the country’s wastewater, with 80 percent of which is untreated!  Around 180 cities depend on the Yangtze River for their drinking water, including Shanghai, Wuhan and Chongqing; that’s a combined population of nearly sixty million inhabitants, about the same size as France or the United Kingdom.  Over 60 percent of China’s population drinks water contaminated with levels of human and animal waste that exceed international standards.  You need to keep going farther upstream to find cleaner water and one day you will have nowhere further to go.

China’s population is also aging fast – in just over three decades since the founding of the Communist state in 1949, life expectancy rose from thirty-five to seventy; 170 million Chinese will be over 60 years old by 2020.  Yet, whereas in the early 1980s, seventy percent of Chinese public had access to state-run health services, by just a decade later and after vast economic reforms only twenty percent could afford the same.  At the same time, health care costs payable by an individual are rising fast – from zero in 1978 to more than 50 percent three decades later.  Today, sixty percent of rural residents in China cannot afford hospitals altogether.

So, is there no good news from China?

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Here are several reasons to consider otherwise.

CLEAN WATER.  The Chinese public are not just drinking bottled mineral water by the dozens a day, their government have already started imposing water usage standards on Chinese companies and municipalities since 2000.  Expect China’s Ministry of Water Resources to spend billions of dollars to rescue China’s water system.  To be expected are increased demand for urban wastewater treatment facilities in the southern provinces, and south-to-north water diversion lines.  There is enough fresh water in Russia’s Lake Baikal in almost empty Siberia that contain more water than all of North America’s Great Lakes combined; it will take several years to divert the water into China, but anything is possible in desperate times.  And here is the punch line – the Chinese have begun to admit publicly that they do not have the expertise to manage these issues; consequently, privatization and opening up China’s water sector to foreign investment are inevitable.  This is good news to companies with good balance sheet, technological capability, and connections.

HEALTH CARE.  Today, ninety percent of China’s rural residents are uninsured and unseen by doctors; even the plan to give peasants access to doctors for a dollar per year was considered too costly for many.  Since economic reforms began in 1978, most health care benefits have gone to the wealthy urbanites who can get the best that money can buy, and although about four to five million Chinese have some health coverage through employee plans, the vast majority of China’s migrant labor force are not covered.  The Chinese government can be expected to increase assistance to the underserved rural populace in addition to boosting old age pensions and other forms of social security.  Expect the government to encourage increased private local and foreign investment in China’s health care sector, and this will benefit health care providers, including private hospitals, pharmaceutical companies, and medical equipment suppliers, among others.

So, despite the doom and gloom coming out of China, there are in fact plenty of positives, depending on how we want to view the country.  If you have not figured it out already, my view about China is that neither is it going to conquer the world nor is it going to collapse spectacularly, but it is going to develop with a steady and gradual pace.  After all, it has done this over the last two thousand years already.  China will always be China.

Comments welcomed.