As China’s Communist Party turns 100, economic challenges loom

Private education companies that provide extracurricular lessons to legions of Chinese children are in the crosshairs of the government, as officials seek to ease pressure on students and the financial burden on families.

Though aimed at private tutoring firms, the crackdown is symptomatic of wider systemic problems facing China as the ruling Communist Party celebrates its 100th anniversary this week.

Falling birth rates and a rapidly ageing population spell trouble for China’s future economic growth.

Income inequality, regional economic divides, and wide gaps in opportunity between rural and urban citizens were issues highlighted by China’s President Xi Jinping in a late January speech as pressing matters the nation must tackle to reach what he called an era of “common prosperity” in the coming years.

China’s leaders steer clear of the phrase “middle-income trap” – a condition where a country fails to reach a higher, more developed status – but that’s where the country could end up if leaders fail to address those fissures.

Xi’s remedies – better income distribution, education, social security, affordable medical care, housing, elderly care, child support, and quality employment; also mentioned in the same speech – are many of the same wants as most working families and youths.

Current structural and political barriers, however, may be too formidable to deliver those policies unless deeper reforms are implemented beyond piecemeal efforts such as lifting restrictions on the number of children families can have or trying to mandate less homework for school-age children.

They will be expensive and will likely need the country’s most wealthy to pay heavier tax rates, either through property taxes or capital gains taxes. But implementing such policies is fraught with peril. Do it too fast and could lead to capital flight, problems in the white-hot property market and financial system disturbances that do more harm than good.And there are other structural barriers. The country’s hukou system ties social benefits to a family’s rural or urban hometown, and the overemphasis on the gaokao – standardised exams – determine whether students can advance to university and achieve higher rates of economic success.

Growing pressures on parents and students over the past decade have increased the necessity to reform these systems as incomes have stagnated and social mobility has ossified.

That shift has given rise to much-discussed social conditions in recent months: tangping – or lying flat  – an action of making as little effort as possible to get by, and its partner philosophy of “involution” – a feeling of despair or burnout, particularly among those involved in the 996 working culture, working from 9am to 9pm six days a week.Sun Liping, a professor of sociology at Tsinghua University, recently wrote on his WeChat account that these conditions are affecting mostly younger middle-class and white-collar workers whose hopes have plateaued. Even after all their efforts to study hard and work hard, they feel they’ve reached a point where there’s no possibility to advance higher and more danger of falling back down.

So there’s little desire for more, or even any children, with housing prices so high in many cities, and with parents who are retiring much earlier than most workers around the world to support. Any extra cost has the potential of knocking them off that plateau.

This is a great change from the years following the Cultural Revolution of the 1960s and early 1970s, and China’s reform and opening-up period, when the opportunities for families to change their social status through hard work and education were much greater, primarily since the starting point was so low for nearly everyone.

 

“Over time, a new elite formed and developed vested interests,” Imogen Page-Jarrett, a research analyst based in Beijing for The Economist Intelligence Unit, told Al Jazeera. “The threshold for people from lower-income backgrounds to move up in society became much higher.”

Liang Jianzhang, chairman and co-founder of the booking site Trip.com, has recently argued that China needs to deeply reform the gaokao system, vastly increase education expenditures and attempt to achieve universal college education for all of its youth to meet the needs of a more complex, innovative economy of the future.

Potential fixes creating more problems

The latest efforts to address some of the pressures facing China’s parents and youth have met with lacklustre response and sometimes satirical backlash.

After the government announced that married couples would be allowed to have up to three children, in an effort to boost birth rates, remarks appeared on social media highlighting that the policy shift did nothing to address the soaring costs of raising kids, or the financial burden of taking care of elderly parents.

Other government policies in the pipeline, like proposals for potentially banning online and offline courses during summer holidays, weekends and other non-school periods in places like Beijing and Shanghai, only set in motion other potential problems.

The idea, in theory, is to release pressure on kids and give them a real break from school so they do not end up burned out by the time they reach adulthood.

“I think one of the interesting things about a lot of these changes at the moment is that every force has an equal and opposite reaction,” said Julian Fisher, co-founder of consultancy Venture Education in Beijing. “When you’re pushing on learning centres, you’re pushing on a multibillion-dollar industry, and that impacts human resources and society in the sense that people are hired [for these tutoring jobs].”

 

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