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Why China's Quest For Superpower Status Must Include True Generosity Abroad

Op-Ed: China has helped fund a major new project to build schools in Africa, raising the ire of some Chinese for not first taking care of kids at home. The writer lays out the local benefits of helping globally.

A school in Tanzania (jez_d)
A school in Tanzania (jez_d)

After criticism last spring about alleged corruption at China's Red Cross Society, a semi-public organization with an opaque financial system, Chinese citizens have grown highly skeptical about charity organizations. So when another self-professed philanthropic body called World Eminence Chinese Business Association initiated a project to help African countries build schools, it immediately attracted another wave of criticism, also in view of Beijing's inability to solve its own problem of educating migrant children from the Chinese countryside.

BEIJING - Since June, Beijing authorities have shut down 30 unlicensed schools that had been serving the city's migrants' children. And yet while there's now no school for these children because their parents don't have a Beijing hukou (residence permit), a project called "China-Africa Project Hope" opened with fanfare to assist countries like Rwanda, Tanzania, Kenya, Namibia and Burundi in building 1,000 schools over the next decade. Initiated by an organization called the World Eminence Chinese Business Association and endorsed by the Ministry of Civil Affairs, this project immediately sparked criticism: "Why are we ignoring our own kids, while building primary schools for others?"

Many think that China is still a developing country with enough difficulties to face at home, and shouldn't be busy assisting other countries.

I personally hold a very different view. I believe in the internationalization of China's philanthropy, for several reasons. First, by going abroad, we can share international philanthropic resources to develop China's strength in this field; second, by assisting others, China will raise its global status and improve its image; third, by learning from the experience of others, China will improve its professionalism and improve its social supervision and be more transparent in charity affairs.

China itself has been a beneficiary of international assistance. It's the world's largest developing country, and over the past 30 years it has received nearly $7 billion of direct aid, as well as more than $140 billion of aid as soft loans from international financial institutions and foreign governments.

Shanghai's Suzhou Creek (the city's river) pollution control engineering, for example, as well as the Beijing subway and International Airport, all received international funds and technical support. Not only did this aid solve the financial problems which China faced, but it also brought us valuable technical and managerial experience.

When Wen Jiabao, China's Prime Minister, attended the United Nations' Millenium Development Goals Summit in 2010, he vowed that China would build 200 schools, send 3,000 medical specialists, train 5,000 medical personnel, provide 100 hospitals with medical equipment and medicine, and support 200 energy and environmental projects to promote sustainable development in developing countries.

In recent years, various arguments continue to appear about the many threats of powerful China would present. They mostly come from Western developed countries, whereas this kind of theories concerning China very rarely emanate from developing countries.

One very important reason is that people in these parts of the world share a psychological sense of identity with China, which has experienced its own recent growing pains. In expanding aid to developing countries, China will further enhance this bond.

In addition, these countries can also change their view about China through contact with Chinese products, and this will naturally help establish a preference for Chinese goods in the future. China has gradually become an economic power, so the world is changing its view on the role China plays – and what image it has -- on the international arena.

A strategic question

The Chinese government, entrepreneurs and NGOs should all participate more actively in international philanthropy. This will matter to China's identity and its global strategy in the future.

China still has a lot to learn to develop a more worldly perspective, and to understand the concept of "global charity". It needs to study the international financial regulatory mechanisms and the operational systems of charitable foundations. It needs to insist on openness and transparency in its operation, such as annual accounts and the disclosure and reporting of its finances, as well as accepting outside auditing so as to establish a credible mechanism of tracking the flow of donations, and to ensure the charity's credit rating.

China should also allow the setting-up of charitable organizations which don't rely on the government, looking to the strength of organizations such as Oxfam UK, Taiwan Buddhists' Tzu Chi Foundation and Médecins Sans Frontières.

China has thus far rarely participated in third world humanitarian's relief work. The China-Africa Project Hope will be one of these actions. As long as this project's executive body can commit itself to being 100% transparent, and to being financially audited by a reputable accounting firm, the project will be a great achievement and China should contribute to it.

We are much more likely to win favor through civil charitable assistance than through national financial aid. Besides, this is also a new non-governmental diplomatic channel. It's much easier to reach a recipient country's people, to gain their trust, and promote deeper mutual understanding and cooperation through non-government aid.

China's philanthropy must go global. What is more important for the public is that they pay closer attention to ensuring these bodies' transparency so as to provide a sound basis for action.

No matter how many flaws China's charitable sphere has, we still ought to place confidence in charitable work. After all, China needs to give charity and have a good heart.

Read the original article in Chinese

Photo - jez_d

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Society

Debt Trap: Why South Korean Economics Explains Squid Game

Crunching the numbers of South Korea's personal and household debt offers a glimpse into what drives the win-or-die plot of the Netflix hit produced in the Asian country.

In the Netflix series, losers of the game face death

Yip Wing Sum

-Analysis-

SEOUL — The South Korean series Squid Game has become the most viewed series on Netflix, watched by over 111 million viewers and counting. It has also generated a wave of debate online and off about its provocative message about contemporary life.

The plot follows the story of a desperate man in debt, who receives a mysterious invitation to play a game in which the contestants gamble their lives on six childhood games, with the winner awarded a prize of 45.6 billion won ($38 million)... while the losers face death.


It's a plot that many have noted is not quite as surreal as it sounds, a reflection of the reality of Korean society today mired in personal debt.

Seoul housing prices top London and New York

In the polished streets of downtown Seoul, one sees endless cards and coupons advertising loans scattered on the ground. Since the outbreak of the pandemic, as the demand for loans in South Korea has exploded, lax lending policies have led to a rapid increase in personal debt.

According to the South Korean Central Bank's "Monetary Credit Policy Report," household debt reached 105% of GDP in the first quarter of this year, equivalent to approximately $1.5 trillion at the end of March, with a major share tied up in home mortgages.

Average home loans are equivalent to 270% of annual income.

One reason behind the debts is the soaring housing prices. In Seoul, home to nearly half of the country's population, housing prices are now among the highest in the world. The price to income ratio (PIR), which weighs the average price of a home to the average annual household income, is 12.04 in Seoul, compared to 8.4 in San Francisco, 8.2 in London and 5.4 in New York.

According to the Korea Real Estate Commission, 42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s. For those in their 30s, the average amount borrowed is equivalent to 270% of their annual income.

Playing the stock market

At the same time, the South Korean stock market is booming. The increased demand to buy stocks has led to an increase in other loans such as credit. The ratio for Korean shareholders conducting credit financing, i.e. borrowing from securities companies to secure stock holdings, had reached 21.4 trillion won ($17.7 billion), further increasing the indebtedness of households.

A 30-year-old Seoul office worker who bought stocks through various forms of borrowing was interviewed by Reuters this year, and said he was "very foolish not to take advantage of the rebound."

In addition to his 100 million won ($84,000) overdraft account, he also took out a 100 million won loan against his house in Seoul, and a 50 million won stock pledge. All of these demands on the stock market have further exacerbated the problem of household debt.

42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s

Simon Shin/SOPA Images/ZUMA

Game of survival

In response to the accumulating financial risks, the Bank of Korea has restricted the release of loans and has announced its first interest rate hike in three years at the end of August.

But experts believe that even if banks cut loans or raise interest rates, those who need money will look for other ways to borrow, often turning to more costly institutions and mechanisms.

This all risks leading to what one can call a "debt trap," one loan piling on top of another. That brings us back to the plot of Squid Game, "Either you live or I do." South Korean society has turned into a game of survival.

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