Abstract

This paper explores the economic and national security implications of United States (US) trade policy with China. It first describes the current US-China relationship, with a focus on China’s ambitions in the South China Sea.  It then explores the benefits and downsides of restricting trade with China, specifically focusing on advanced technologies such as semiconductors. Further, the paper explores how the United States’ trade policies with other countries in the region impact US national security with respect to China. Throughout the paper, multiple historical case studies are used to analyze the economic and security implications of the proposed policies. The paper concludes with the recommendation that the United States should use its power to restrict the development of advanced Chinese technology while continuing to trade in other goods with China. It also recommends that the US reduce barriers to trade with other nations, both to strengthen its economy and build relationships beneficial to national security. 

Introduction 

Rivalry between states is a concept as old as the concept of states themselves. Before the invention of the atomic weapon, great power rivalry involved large-scale warfare, economic intimidation, and overt threats. Since the Cuban Missile Crisis and the collapse of the USSR in 1991, states have recognized that such tensions must be limited to certain spheres and in ways that ultimately prevent rivalries from turning into wars. However, rivalries still exist.  This paper focuses on the increasing tensions between China and the United States (US) as China acts in ways contrary to US interests and security. Economic pressure is increasingly being utilized by the US in order to confront China and decrease the threat it poses to US interests. However, because of the complex nature of global supply chains, any actions the US takes against rivals negatively impacts the US. Recognizing that China is the largest trading partner of the US, the goal of this paper is to articulate the economic policies capable of limiting the threat posed by China while avoiding unnecessary collateral damage; the goal of these policies is to ultimately strengthen the US economy in the long-term, rendering it capable of flourishing despite any damage caused by a confrontation with China. 

Status of US-China Relations

The United States has an interest in creating a world where its citizens can participate in global trade based on fair rules. Its main goal in this respect should be creating and maintaining a system based on rules and values that are conducive to trade flourishing. These include ensuring the freedom of navigation, encouraging the free and fair exchange of goods and people between countries, and assisting in the protection of the territorial integrity of other nations so that they can engage in trade. The United States has for many decades worked to implement these goals through international institutions and should continue to further implement these goals. These goals are not shared by all countries, and China in particular has sought to undermine them. 

The region of Asia which China seeks to influence is vital for the global economy and for securing the US policy goals mentioned above. The South China Sea, a body of water more than double the size of the Mediterranean Sea, is crucial to the world economy and thus crucial for the health of the US economy. It is estimated that 3.4 trillion dollars of goods pass through the South China Sea every year.  In addition, the South China Sea is critical for US allies and trading partners’ supply of energy since more than 80% of the crude oil that goes to South Korea, Japan, and Taiwan passes through the South China Sea.¹ Furthermore, 12% of the world’s fish are caught in the sea and there are estimated to be more than 11 billion barrels of oil and 190 trillion cubic feet of natural gas available in the sea.² One-third of the world’s crude oil and half of its liquefied natural gas passes through this region.³ The island of Taiwan located within the South China Sea produces 65% of the world’s semiconductor chips including over 90% of the most advanced chips crucial for the technology the US and its partners rely on for their economies and militaries. ⁴

China, in its official public statements and in its actions, has shown itself to be in opposition to US interests. For example, the Chinese Government has openly interfered with the stability of this important trading region vital to US interests and security. China has acted in ways that actively interfere with the US goals mentioned above in order to increase its own regional influence. China has claimed large parts of the South China Sea as its own territorial waters and has taken aggressive measures to interfere with the freedom of the seas. China has built multiple artificial islands in disputed sections of the South China Sea and has built military bases on them as a means to further expand its power in this disputed region. The Chinese military has also sent its forces into the South China Sea to harass and intimidate its neighbors. They have seized islands claimed by other nations, for example, the Scarborough Shoal from the Philippines, in an attempt to assert their dominance in the region. The Chinese have used armed civilian ships, as part of the People’s Armed Forces Maritime Militia (PAFMM), along with other military units to interfere with non-Chinese fishing operations.⁵ China has also repeatedly attempted to prevent other nations from exploiting oil reserves and other natural resources inside the South China Sea.⁶   In addition, China does not recognize the sovereignty of Taiwan and claims it as a part of its own country. It has claimed Taiwan is “indispensable for the realization of China’s rejuvenation” and has promised to use force to incorporate Taiwan into China if necessary. China has routinely conducted military drills in Taiwan’s air and water territory and has begun to modernize its military, one of its explicit goals being to force Taiwan under Chinese rule. ⁷

If China is allowed to grow its power unchecked, it could become a real threat to the United States. However, the United States’ relationship with China is not entirely negative. China is the third largest export market for the United States behind only Mexico and Canada.⁸ The large Chinese population offers US companies access to one of the largest markets in the world making the US hundreds of billions of dollars every year.  The United States also imports hundreds of billions of dollars worth of goods from China including over $120 billion in electronics, over $100 billion in machinery and appliances, and tens of billions more in industries such as textiles, chemicals, metals, rubber, and other products on which the US economy thrives. In 2022, US imports of goods and services from China totaled over $560 billion and S&P 500 companies received more revenue in China than the next three countries combined.⁹

US Policy Options

The economic and political goals of the United States with respect to China should be to balance the economic opportunities that support large sections of the US economy with the need to preserve a free and open East Asia based on fair rules. The clearest area where China needs to be limited is the technological growth and development of its armed forces. As mentioned in the preceding paragraphs, the Chinese have goals to dominate the larger South Asian region and impose an authoritarian system on it. They have already taken action toward this end. If China’s military is allowed to further strengthen and develop, the Chinese government can take any number of negative actions. The most drastic action China could initiate would be invading the island of Taiwan. If China is unwilling to launch an invasion it could use its military to enforce a naval blockade or no-fly zone surrounding Taiwan. Chinese forces could use their power to further exert control over commercial activities in the South China Sea including oil and gas exploration, internet and communication cables, and fishing. The government could also use its power to pressure or coerce nations into actions that are contrary to the interests of the United States. The United States also has an interest in preventing the growth of Chinese control over its own semi-autonomous regions, such as Hong Kong and Xinjiang, since a stronger internal government allows China to project its power outward.  

The United States has many tools available to counter the threats posed by China and to achieve its goal of furthering economic growth and regional stability. Traditional methods like building up US and allied militaries are, to some extent, clearly necessary.  However, these actions are expensive and may lead to misinterpretation and unnecessary military escalation. Instead, by utilizing economic tools, the United States can find a middle ground between doing nothing and preparing for war. A two-path approach to economic confrontation is necessary in this case. The first is to take the necessary actions to prevent the growth of the Chinese security apparatus. This can be accomplished primarily by restricting China’s access to advanced technologies. The goal is to ensure that for as long as China remains a threat to US interests, the US and its allies have a strategic advantage over China. While the primary goal is to deter China, in a worst-case scenario that leads to war (especially with a nation that does not have a mutual defense pact with the US), US allies would be able to stand their ground with minimal US involvement. Restricting advanced technology to China will also prevent China from having access to the most advanced tools necessary to control its own population (such as artificial intelligence-powered surveillance). This will make China less internally stable and less confident in its ability to project power abroad. In this respect, general trade sanctions may also be effective, for example, a law passed by the US Congress preventing most imports from the Xinjiang region of China.¹⁰ What needs to be analyzed is the economic consequences of these actions and whether they are justified to achieve the stated political ends. China is far from a friend to the US and the US should not seek to appease it, but it would be counterproductive for the US to unnecessarily damage the Chinese economy and by extension its own. 

The actions mentioned in the preceding paragraph are existing or potential punitive actions against China.  However, there is another side to this coin. Positive relations with other countries, particularly in South East Asia are essential to deterring Chinese aggression against US interests. Creating a freer exchange of goods and people between the United States and other nations can be an effective way to limit Chinese influence. This can include actions such as the expansion of trading blocs such as the aborted Trans-Pacific Partnership (TPP) which did not include China. Unfortunately, the nationalist views of the Trump administration meant the TPP goals were short-lived. Strengthening the economic bonds between the US and other nations is a way to give others a stake in US interests and thus make them more amenable to helping the US defend them. Demonstrating the superiority of a system based on liberal values through free trade deals and loosening immigration restrictions between nations may incentivize them to turn away from the much more authoritarian Chinese model. 

Deciding how the United States should work to counter Chinese influence is just as important as determining the areas where the United States should choose to not counter Chinese influence. For instance, as part of China’s Belt and Road initiative, large amounts of public money are being transferred from China into infrastructure projects in many other, mainly underdeveloped, nations. A strong argument can be made that these policies are not in China’s public interest as they necessitate large amounts of debt and taxes for projects that do not provide the necessary returns to cover these expenses. They are therefore detrimental to the health of the economy. China, being a nation strongly influenced by Marxist ideas and a desire for political power, will oftentimes implement policies that are detrimental to its economy. It is important for the US to identify these policies and not take similar actions in the name of countering China. 

Analysis of Punitive Actions against China

Actions aimed at crippling the Chinese economy may be necessary to achieve US national security goals, but they need to be targeted and not cause unnecessary damage to the US economy. During the Trump administration, the US began heavily increasing tariffs on multiple countries and industries, with the government specifically targeting China. In large part due to these increased tariffs and Chinese retaliation, multiple US industries and the economy as a whole suffered. One clear negative effect was the decreased US agricultural exports to China. American agricultural exports dropped by over 60% between 2014 and the end of 2018 which led the US government to spend 28 billion dollars of tax money to subsidize the farming industry.¹¹ In addition between 2018 and 2019, US exports to China of petroleum and coal products dropped by 75% and metal exports dropped by over 50%.¹² Contrary to the policies implemented above, future actions against China should be limited and serve specific defined goals. 

Limiting China’s Access to Semiconductors 

The semiconductor industry has been a particular target for US actions. This is because semiconductors are essential in military and security technology. Consequently, in order to weaken China’s ability to effectively exert control over disputed territory, limiting access to semiconductors is essential. The Trump administration began restricting access to semiconductors to major Chinese companies as punishment for violating US national security sanctions on countries such as Iran and North Korea. The Biden administration escalated this effort on October 7th, 2022 by authorizing sweeping restrictions designed to limit Chinese access to foreign advanced semiconductors and stifle Chinese efforts to design and manufacture them themselves. The Biden administration’s policies include expanding the foreign direct product rule which allows the US to control the transfer of technology made with US technology regardless of the country of origin. Given that so many products within the global supply chain are developed in the United States, the new rule prohibits the transfer of a multitude of advanced technologies necessary to manufacture advanced semiconductors. Furthermore, US nationals are now prohibited from assisting Chinese companies in the manufacturing of these semiconductors.¹³ There are clear national security benefits to these actions. Chinese entities will now have a harder time acquiring advanced technology to transfer to powers much more hostile toward the United States, most notably North Korea and Iran. China itself will no longer have the ability to use Western technology to threaten Western interests and nations. These moves will limit the advancement of Chinese military technology and temporarily, if not permanently, secure the US and its allies’ military superiority in relation to China.¹⁴ 

It is clear that these export restrictions set China and its armed forces back technologically. While for many years it has been a goal for China to increase its domestic production, the government had to balance the goal of producing semiconductors domestically with the fact that foreign semiconductors were by and large more economical.¹⁵ The question that remains is whether this setback is permanent or temporary. Even before the October 7th, 2022 export controls, China was investing heavily in onshoring its semiconductor manufacturing, including in 2021 when it is estimated China invested over $50 billion in the industry. Following the Biden administration’s controls, China no longer has to make that choice: the choice has been made for them – China will need to produce all semiconductors domestically. 

Following the American sanctions, Chinese intentions are increasingly clear: devote as many resources as possible to creating domestic capacity to design and manufacture advanced semiconductors. However, assuming the US is able to continue to convince its allies that the export controls are in their self-interest which so far it seems to be doing, the Chinese goal is easier said than done. The financial cost itself is staggering. One estimate of the cost to create a fully localized and self-sufficient supply chain for the manufacture of semiconductors is at least one trillion dollars in upfront investments and an increase of semiconductor prices between 35 and 65 percent.¹⁶ The financial cost is not the only obstacle in the path of China’s goal. 

The global semiconductor industry that has developed over at least the last 70 years is a complex system that includes a multitude of trade secrets, research institutions, and manufacturing facilities spread across many countries and companies. The difficulty of recreating the supply chain, no matter how much investment or corporate espionage, cannot be overstated. As of 2021, the US contributes 39% of the value in the semiconductor supply chain, and US allies in Asia and Europe contribute an additional 53% of the value while China contributes 6% of the value in the supply chain.¹⁷ With regard to the most advanced semiconductors, China’s position is even worse; three companies based in the US, South Korea, and Taiwan control virtually all of the world’s advanced semiconductor manufacturing capacity.¹⁸ China is advancing in the semiconductor industry, but given the above facts combined with the systematic cutting off of information and technology to China by the US and its allies, it is difficult to imagine a situation where China will obtain superiority over the West in this field.

The Chinese could defeat the export controls by separating the US from its allies. The export controls rely on the cooperation of multiple European and Asian countries such as the Netherlands, Germany, South Korea, and Japan. While all these countries have been victims to varying extents of Chinese economic and political aggression, if China can convince some of these countries to allow the export of their technology, the export control’s effectiveness will be limited.  It is important to note that the US need not hold China to the technological level it currently possesses for the controls to be successful. All that needs to occur is that the US and its allies restrict China enough so that by the time it achieves the current technology, continued R&D by Western nations means they will already have more advanced semiconductors. Thus, so long as China remains a threat, the West will remain dominant with regard to advanced semiconductors. 

Downside of Export Controls 

With the semiconductor example, a compelling argument can be built suggesting export controls are a strong and effective tool for the US to achieve its foreign policy goals; however, they are not consequence-free. Specialization caused by international trade has led to the creation of trillions of dollars in wealth; the disruption of the free flow of goods leads to a decrease in wealth in the same way. It is estimated that every $1 billion of exported US goods supports approximately 6,000 jobs in the United States.¹⁹ Approximately 4,500 US jobs are supported by every billion dollars of exported US services.²⁰ The loss of jobs is not the only consequence that should cause policymakers to hesitate before expanding export controls. 

The loss of American technological leadership is a potential risk with sanctions: with others developing semiconductor technology, they could create a competitor to American firms by making a better chip. In the late 1990s, the US Congress passed export controls on satellite technology which directly resulted in a loss of $2.4 billion, 19% of the market share, for US companies operating in the commercial communication satellite industry over a three-year period.²¹ Furthermore, almost one-third of US technology companies divested resources from the research of new satellites subject to US sanctions.²² It is not unreasonable to assume that if the US continues to expand export controls, a similar fate could await the much larger and strategically important US semiconductor industry. The more regulations which are placed on US products, the less favorably they will be looked at by consumers. Companies will naturally begin moving away from US products and toward foreign products that are less controlled. This is not to say that export controls are inherently wrong, and there are ways to limit the damage caused by these regulations. Most importantly, the US needs to ensure that the export controls will actually be effective. The reason that controls on highly advanced and sophisticated Western products and labor can be so effective is that no economically viable alternative exists. As export controls are applied to less sophisticated goods, viable alternatives begin to exist. If export controls restrict the ability of US companies to provide goods to China, which the country could obtain anyway, it actively harms the US while not holding back China. Thus, export controls have to be continuously updated and specifically focused on unique products to ensure they do not cause damage while providing no strategic advantage. 

In addition to the economic damage directly caused by sanctions, additional damage is caused by the retaliation they invite. The US sanctions against China have instigated retaliatory measures which will only increase in intensity as the US continues to confront China. One of the more overt acts of retaliation since the October 7th, 2022 export controls were instituted, is the ban of equipment produced by Micron, a US-based semiconductor manufacturer, in a wide range of Chinese products. The ostensible reason given for the ban was that the company failed a cyber security review, but it is widely accepted that the Micron ban is retaliation for US sanctions. Micron sales in China totaled $3.3 billion in 2022, a number which will decrease dramatically in future years as the ban takes effect.²³

As tensions escalate with China, more companies will become collateral damage and it will leave US policymakers with a choice: should these firms be compensated as bystanders? A policy could be pursued similar to the billions of tax dollars given to farmers as compensation for the damage the Trump administration’s trade war caused. Alternatively, the US could use the Micron ban and other similar actions as an opportunity to push a narrative that China is an authoritarian regime with arbitrary laws, and companies that engage in business under those conditions do so at their own risk. ²⁴

Possible Retaliation by China 

Any US policy has to be viewed in terms of Chinese retaliation: on the spectrum of retaliatory measures China could take is restricting exports of rare earth minerals. China currently controls over 60% of rare earth metal mining and 80% of refining capacity globally; however, China’s position here may not be as strong as it originally may appear.²⁵ Part of the reason China is so dominant in this industry is that other nations have chosen to artificially limit their capabilities for political reasons. However, political priorities can change; between 2010 and 2015, Japan cut its reliance on Chinese rare metals by over 20%  in response to China boycotting sales of minerals to Japan over a fishing dispute.²⁶ The United States and its allies have the mineral reserves necessary to weaken Chinese dominance in the industry should they ever make that choice.  

There is also a clear risk of runaway retaliation: more radical actions that China can take than those described in the previous paragraph in response to escalating US pressure. One action that could be taken is the voiding of intellectual property rights of foreign entities in China. While the specifics of such an action are difficult to predict, multiple laws and draft laws in Russia provide some clarity into what the Chinese could implement. Following the Russian invasion of Ukraine, the Russian government issued an order eliminating the royalty owed to patent holders from nations Russia viewed as unfriendly.²⁷ Another law waived trademarks for various consumer products heavily targeting computers, clothing, and automobiles. In addition, Russian courts have taken actions to nullify the intellectual property of foreign firms. There have also been other laws drafted weakening intellectual property, for example an order that would legalize piracy of foreign software, a law that would withdraw Russia from the World Trade Organization, and multiple laws limiting or voiding IP protections for firms based in “unfriendly countries.” These laws are at various stages of implementation and some have hit roadblocks within the Russian government, but if China were to pursue actions similar to this, it would have incredibly destabilizing effects for the global economy. There would be a breakdown in international trade cooperation: if such laws were enacted, it would deprive foreign firms of billions of dollars. Furthermore, China uses more intellectual property than it produces; in 2017, over 2.7 times more patents were filed in China by foreign actors than Chinese actors filed in foreign countries.²⁸ In the long-term, this strategy would harm China as much as it harms the rest of the world. China’s expenditure in R&D is increasing rapidly; however, if intellectual property is voided, and assuming nations would not respect the IP of companies that didn’t respect theirs, China will never be able to become a net exporter of intellectual property. Furthermore, nations where China was a net exporter of IP would have little incentive to protect Chinese intellectual property which would further deprive China of funds. Lastly, foreign companies will be deprived of revenue to invest further in intellectual property thus harming China in the long run. 

Another form of retaliation China could implement is to restrict the shipping of foreign goods on Chinese ships. China controls approximately 30% of the world’s shipping, and any restrictions placed on it could lead to a global shipping crisis. China could announce a large increase in the fees companies must pay in order to ship foreign goods on Chinese ships or a total ban on the shipment of foreign goods. Both actions would have similar effects varying only in degree. The immediate effects of such an action would be a shortage of ships transporting non-Chinese goods thus resulting in a price increase, and an increase in the supply of ships transporting Chinese goods resulting in a price decrease. The effects of a law like this on China are complicated. The artificially decreased prices of Chinese shipping would lead to an increase in sales of Chinese goods. This would lead to massive short-term gains for the Chinese economy. However, beneath the surface problems begin to arise. The market for shipping Chinese goods would become oversaturated and as shipping prices decreased, multiple Chinese shipping firms would risk bankruptcy. Companies could, in theory, leave China and provide shipping to the rest of the world. However, due to the nature of the Chinese economy and the fact that the shipping firms are owned or strongly influenced by the government, it is unlikely that shipping companies would pursue this action. Ultimately, China would need to significantly subsidize its shipping industry with state funds. In the long run, the rest of the world would build more shipping capacity and prices would begin to drop for non-Chinese goods. China ultimately would be under economic pressure to allow their shipping firms to compete as subsidies become unsustainable and a drag on the rest of the economy. 

In sum, there is a wide range of retaliatory actions which China can take. While some initial actions have already been taken, others are more probable and some are much less probable. It is clear that US regulation on semiconductors or Chinese limits on shipping cause economic damage whenever these regulations are promulgated. Both the US and China recognize this to some extent; however, there comes a moment where rational long-term judgment may be abandoned in favor of short-term gain. It is unclear when the actions taken by the US, combined with internal political pressure, will cause the Chinese government to reach that point. The US should enact the necessary regulations to defend its interests and security at the same time; however, the US should not needlessly antagonize the Chinese. Whenever possible, the free exchange of goods and services should be encouraged, and when it is not possible, other positive actions to strengthen trade should be enacted. 

Analysis of Positive Actions to Strengthen Trade

The actions discussed above are designed to hold China back in strategically important ways. However, the United States must also take steps to strengthen its economy to ensure it remains an important player in the global system and to mitigate any economic damage caused by the imposition of sanctions and subsequent Chinese retaliation. 

Trade is essential to the economy of the United States and strengthening trade with other nations. Attempting where possible to find common ground with China is necessary even as the US moves to economically confront the Chinese government. The main instrument to strengthen trade is trade deals with other nations. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a trade agreement among multiple countries mainly in Asia, but also including Canada, Mexico, and South American countries. The agreement was created after the US withdrew from the prior proposed agreement, the Trans-Pacific Partnership (TTP) which was designed to limit Chinese influence. The TTP was created to further integrate the US with Asia thus increasing US influence relative to China. The US not participating in a trade deal with three out of its top four trading partners in a crucial region of the world does not bode well for US political or economic influence. Contrary to the actions of the US, the Canadian government participated in the trade deal and has seen substantial benefits. Total merchandise trade between Canada and the five signatories that do not have additional trade deals with Canada (Australia, Japan, New Zealand, Singapore, and Vietnam) increased by 10% in the first three years, representing nearly $5 billion.²⁹ Canadian exports to those five countries increased by 8.3% in the same period, and taxable imports increased by 11.2% mainly in consumer products such as clothing and furniture.³⁰ While the agreement has increased trade and wealth, there are some legitimate issues that make the US reluctant to join, including issues relating to intellectual property and state control. The US, as the world’s largest economy, does have leverage in negotiating a favorable entry into the agreement. The US can insist on strengthening protections for intellectual property and currency manipulation similar to those included in the United States-Mexico-Canada trade agreement (USMCA) that was ratified by Congress in 2019. It can also insist on strengthening protections for companies against government interference and increase regulations on state-owned enterprises.³¹  The US should participate in agreements like CPTPP and others to strengthen its economy and influence, and thus better protect its national interests. 

It is important that the US cements its research and development leadership so that it can continue to have control over the most advanced and best technology. For the US to compete and outperform in the global economy, it needs to increase the number of workers in advanced technology areas. By 2030, it is estimated there will be a shortage of 1.4 million workers, such as skilled technicians, engineers, and computer scientists, in technology fields.³² If current trends continue, 58% of semiconductor jobs risk going unfilled by 2030.³³ Multiple policies have been proposed, such as increasing the number of resources invested in science education; while these policies warrant debate, it is worth noting that, in addition to causing an increase in taxes and debt, attempting to reform the education system is a long term solution to a current problem. 

While some government investment may be necessary, one of the best ways to assist the semiconductor and broader technology industry without sacrificing the rest of the economy is through immigration: at US colleges and universities, over half of the graduates with a master’s degree in engineering are foreigners and over 60% of PhD engineering graduates are foreigners. Approximately 80% of foreigners with a master’s degree and 25% of PhDs in engineering leave the US after graduating. The plurality of foreign students in US universities are Chinese. Instigating an exodus of Chinese tech workers from China would help fill the US worker shortage while depriving China of skilled engineers necessary for the development of strategic technology. A model can be found in the US approach to Cuba during the reign of Fidel Castro. Several factors increased immigration from Cuba: an authoritarian regime had already incentivized many to flee the country, the US put economic pressure on an already fragile communist economy, and the US incentivized the migration of Cubans by making it easier for them to obtain permanent residency, among other actions.³⁴ A more limited, but still effective, policy can be pursued with regard to China. China too is an authoritarian regime that naturally makes many people predisposed to leaving. In the case of Cuba, sanctions were implemented on goods from a variety of sectors further fueling the exodus. In the case of China, limited sanctions on the technology sector would restrict the growth of that industry and thus further incentivize an exodus of Chinese tech workers to the US. This can be done with an action similar to the Cuban Medical Professional Parole Program that specifically incentivized a wide range of Cuban medical professionals and their families to come to the US. Another option would be to announce increased incentives for tech workers to enter the US from any nation, understanding that a large portion of those would be Chinese for the reasons mentioned above. While other actions such as export controls would harm China, such actions also deal damage to the US, while increasing immigration from China would actually be a benefit to the US and should be pursued more aggressively. 

While the United States should join multilateral trade agreements and increase immigration, long-term strategy suggests that the United States should also engage with China directly on issues where both sides can find some common ground. It is worth reiterating that China is the largest trading partner of the US and both countries benefit from the relationship. If the US limits its coercive actions to measures which are necessary to defend national security and the property of US companies, there is still billions of dollars of trade to be done between China and the US. In 2022, US exports to China rose by 12.4% compared to the previous year, to a total of $35 billion. Between the years 2018 and 2022, there was an over 400% increase in US agricultural exports to China.  In addition, US imports of everyday consumer items such as furniture, toys, paint, and other manufactured products increased to a total of $69.4 billion in 2022 constituting 50.7% of total US imports of those product categories. Demand for Chinese textiles in the US also increased by 6.7% to $53.7 billion representing almost 30% of total US imports in that sector.³⁵

The US will also become less dependent on China in time. As more countries are industrializing, the ratio of Chinese exports to the US compared to total exports has been declining even as the amount of Chinese exports to the US has risen. For instance, the total amount of miscellaneous manufactured goods imported from China between 2018 and 2022 increased by $4.5 billion even as the share of US imports from China in that sector decreased by nearly ten percent. The world is diversifying away from China in some ways but the evidence is unequivocal that there is still demand for Chinese products in the United States and there is also Chinese demand for American exports. ³⁶

Political Obstacles to Policy Options

The United States government ultimately relies on the consent of its citizens in order to carry out its foreign policy. Many of the policies proposed in this paper lead to increased economic growth and prosperity for large numbers of Americans and thus can, in all likelihood, be implemented without substantial backlash. However, some of the actions proposed will inevitably result in negative economic consequences for Americans. Currently, China has not taken actions that seriously threaten the way of life of most Americans, and thus targeted sanctions against the Chinese regime can be instituted. These sanctions limit the Chinese’s ability to commit acts of aggression and, due to their targeted nature, allow most Americans to suffer relatively minor economic damage. However, should China choose to escalate matters through further aggressive actions, for example through an incursion into Taiwan’s outlying islands or a blockade of that nation, further US action may be necessary. An effective response to such an escalation would need to involve broad sanctions aimed at crippling the entire economy of China. Such a response would result in significant economic damage to US citizens. 

The question is, in such a circumstance, how much damage should the US be willing to accept in order to limit China’s aggression? If, as soon as such an escalation is made against Taiwan, a forceful response is not implemented, China will be further emboldened which will only fuel its aggression. Given the stakes involved, the ideal response would be a complete cessation of all trade with China thus breaking its economy and its war machine. Such a response would not be undertaken for altruistic purposes; on the contrary, as mentioned before, the US has a strong self-interest in deterring Chinese aggression. The only limitation to a policy of complete secession of trade would be the will of the American people; it is unclear if Americans would be willing to endure higher prices and declining living standards. This is one of the most important reasons to take positive actions to increase the wealth of the US economy; a wealthier population will be more amenable to accepting short-term economic losses in order to preserve their nation’s national security. 

Conclusion 

While there will be some rivalry between the US and China due to their strong economic and political differences, as this paper has suggested, the goal is to confront China and strengthen the United States to prevent unnecessary damage in both the economic and military realms. As this paper has detailed, in order to defend US interests from Chinese aggression, two simultaneous approaches should be taken. The first is punitive measures against Chinese strategic technology: most notably, advanced semiconductors for military technologies such as advanced surveillance technology for warships and hypersonic missiles. The second is increasing positive actions which can strengthen the US economy. This includes increasing trade with other nations and increasing immigration, especially in important sectors such as semiconductors and the wider technology sector. It is necessary to take both actions to maintain economic pressure on China. In order to limit the damage to the US economy, the US should trade with China in fields not related to national security while limiting its growth in the field of advanced technology.  

Footnotes

1. O’Rourke, Ronald. “U.S.-China Strategic Competition in South and East China Seas .” Congressional Research Service , 2023. https://sgp.fas.org/crs/row/R42784.pdf 
2.  “Territorial Disputes in the South China Sea | Global Conflict Tracker,” Council on Foreign Relations, 2023, https://www.cfr.org/globa “The South China Sea Is an Important World Energy Trade Route.” Homepage – U.S. Energy l-conflict-tracker/conflict/territorial-disputes-south-china-sea. 
3. Information Administration (EIA), 2013. https://www.eia.gov/todayinenergy/detail.php?id=10671. 
4.   “Territorial Disputes in the South China Sea | Global Conflict Tracker,” Council on Foreign Relations, 2023, https://www.cfr.org/global-conflict-tracker/conflict/territorial-disputes-south-china-sea. 
5.  Francis, Robert, and Roswell Lary . “Winning the Public Diplomacy Battle in the South China Sea.” Council on Foreign Relations, 2021. https://www.cfr.org/blog/winning-public-diplomacy-battle-south-china-sea.   
6.  “Timeline: China’s Maritime Disputes.” Council on Foreign Relations. Accessed August 14, 2023. https://www.cfr.org/timeline/chinas-maritime-disputes. 
7.  “Territorial Disputes in the South China Sea | Global Conflict Tracker,” Council on Foreign Relations, 2023, https://www.cfr.org/global-conflict-tracker/conflict/territorial-disputes-south-china-sea. 
8.  Berman, Noah. “The Contentious u.s.-China Trade Relationship.” Council on Foreign Relations, 2022. https://www.cfr.org/backgrounder/contentious-us-china-trade-relationship. 
9.  Swanson, Ana. “The Contentious u.s.-China Relationship, by the Numbers.” The New York Times, July 7, 2023. https://www.nytimes.com/2023/07/07/business/economy/us-china-relationship-facts.html.  
10.  “Biden Signs Bill Banning Goods from China’s Xinjiang over Forced Labor | CNN Business.” CNN, December 24, 2021. https://www.cnn.com/2021/12/23/business/biden-bans-xinjiang-imports-china-intl-hnk/index.html
11.  Rappeport, Alan. “Farmers’ Frustration with Trump Grows as U.S. Escalates China Fight.” The New York Times, August 27, 2019. https://www.nytimes.com/2019/08/27/us/politics/trump-farmers-china-trade.html
12.  Bekkers, Eddy. “An Economic Analysis of the US-China Trade Conflict.” World Trade Organization, 2020. https://www.wto.org/english/res_e/reser_e/ersd202004_e.pdf.  
13.  Shivakumar, Sujai, Charles Wessner, and Thomas Howell. “A Seismic Shift: The New U.S. Semiconductor Export Controls and the Implications for U.S. Firms, Allies, and the Innovation Ecosystem.” CSIS, 2023. https://www.csis.org/analysis/seismic-shift-new-us-semiconductor-export-controls-and-implications-us-firms-allies-and. 
14.  Ibid 
15.  Ibid 
16.  Varas, Antonio, Raj Varadarajan, Ramiro Palma, Jimmy Goodrich, and Falan Yinug. “Strengthening the Global Semiconductor Supply Chain in an Uncertain Era.” BCG Global, April 25, 2023. https://www.bcg.com/publications/2021/strengthening-the-global-semiconductor-supply-chain. 
17.  Khan, Saif. “The Semiconductor Supply Chain.” Center for Security and Emerging Technology, June 9, 2023. https://cset.georgetown.edu/publication/the-semiconductor-supply-chain/.  
18.  Ibid 
19.  Ryan Hass, David Dollar, and Vera Songwe Witney Schneidman. “New Trade Agreements Lead to More, and Better, Jobs.” Brookings, July 29, 2016. https://www.brookings.edu/articles/new-trade-agreements-lead-to-more-and-better-jobs/.  
20.  Trade Agreements and Jobs.” United States Trade Representative, 2011. https://ustr.gov/about-us/policy-offices/press-office/fact-sheets/2011/october/trade-agreements-and-jobs#:~:text=Every%20billion%2 0dollars%20of%20services%20exports%20supports%20more,American%20workers%20who%20produce%20Made-in-the-USA%20goods%20and%20services. 
21.  Ezell, Stephen. “How Stringent Export Controls on Emerging Technologies Would Harm the US” information technology and innovation foundation, 2019. https://www2.itif.org/2019-export-controls.pdf. 
22.  Tomoshige, Hideki. “The Unintended Impacts of the U.S. Export Control Regime on U.S. Innovation: Perspectives on Innovation.” CSIS, 2022. https://www.csis.org/blogs/perspectives-innovation/unintended-impacts-us-export-control-regime-us-innovation. 
23.  Mozur, Paul, and John Liu. “With Ban on Micron, China Escalates Microchip Clash with U.S.” The New York Times, May 22, 2023. https://www.nytimes.com/2023/05/22/business/micron-technology-china-ban.html. 
24.  Allen, Gregory C. “China’s New Strategy for Waging the Microchip Tech War.” CSIS, 2023. https://www.csis.org/analysis/chinas-new-strategy-waging-microchip-tech-war.  
25.  Ibid
26.  Hui, Mary. “Japan’s Global Rare Earths Quest Holds Lessons for the US and Europe.” Quartz, April 23, 2021. https://qz.com/1998773/japans-rare-earths-strategy-has-lessons-for-us-europe.  
27.  USPTO OPIA Bulletin Russia – United States Patent and Trademark Office.” United States Patent and Trade Office, June 2022. https://www.uspto.gov/sites/default/files/documents/OPIA-Bulletin-Russia.pdf. 
28.  Schneider-Petsinger, Marianne. “US–China Strategic Competition – Chatham House.” US–China Strategic  Competition The Quest for Global  Technological Leadership, 2019. https://www.chathamhouse.org/2019/11/us-china-strategic-competition.   
29.  “Trade Increases under CPTPP.” Government of Canada, March 27, 2023. https://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/cptpp-ptpgp/access_trade_statistics-accedez_statistiques_commerciales.aspx?lang=eng. 
30.  Ibid 
31.  Cutler, Wendy. “Asia Society.” REIMAGINING the TTP: Revisions That Could  Facilitate U.S. Reentry. Accessed August 18, 2023. https://asiasociety.org/sites/default/files/2022-12/ASPI_CPTPP3_rev.pdf.  
32.  Martin, Dan. “Www.Semiconductors.Org.” semiconductor industry association  , 2023. https://www.semiconductors.org/wp-content/uploads/2023/07/SIA_July2023_ChippingAway_website.pdf.  
33. Ibid
34.  Lopez, Ernesto. (PDF) migration, Brain Drain, and Cuba-U.S. relations – researchgate, 2018. https://www.researchgate.net/publication/324876766_Migration_Brain_Drain_and_Cuba-US_Relations 
35.  “2022 U.S. Trade with China – Bureau of Industry and Security.” US Department of Commerce, 2022. https://www.bis.doc.gov/index.php/country-papers/3268-2022-statistical-analysis-of-u-s-trade-with-china/file. 
36. Ibid

About the author

Alejandro Salas

Alejandro is a senior at The Bronx High School of Science in New York City. He is interested in economics and international trade, and is a Boy Scout who enjoys competitive swimming and debate.

The post United States Policy Options Relating to Trade with China: Economic and National Security Implications appeared first on Exploratio Journal.

Abstract

The main goal of this essay is to try linking the effects of the traditional values and ideals of both the People’s Republic of China and the United States of America to their contemporary economic policies. The methods used to conduct this research use both historical and contemporary sources as well as data to justify some present day economic policies and reforms in said countries. For the United States, since there are vastly different ideals that branch off the same foundation within individuals and presidents. I would be using Donald Trump’s ideals, arguably one of the more popular presidents in the last decade, as the main American ideology. Overall, through this research I gained insight on the United States’ stress on individualism and liberalism that allowed it to push for policies that limited the government’s ability to influence the economy and tried to keep individual’s ability as the main factor in market competition. While China’s promotion towards collective, stable, and authoritarian society creates room for the government to limit individual’s capital, especially the ones who are wealthier, and restricting certain industries that is deemed to give unfair advantages.

Introduction

For decades, the People’s Republic of China and the United States of America have been competing for first and second place in terms of their GDP. However, one might be curious about how a socialist country and a capitalist country come toe to toe in terms of their economic might. Both countries, with completely different ideologies, cultures, and traditions are economic giants globally. With this in mind, this paper argues that traditional cultures and values do have a distinctive effect on the makings of contemporary economic decisions, and do provide reasonings for economic policies and reforms for the respective country.

What are Chinese Ideals:

Ever since the communist takeover of China in 1949, the definition of being a Chinese has changed. In half a century, China has transformed from an agrarian based, shattered feudal society to a communist, economic powerhouse. Even though the large economic boost puts China right behind the United States in terms of GDP, the average Chinese citizen has a completely different definition of what a successful society is than the average American citizen.

How would a Chinese citizen define a successful society? One of the main things that
Chinese culture stresses is stability. In Chinese history

The traditional moral-political model was able to withstand or absorb outside influences. Buddhism came from India, Mongol and Manchu invaders swept in from inner Asia, and traders from the Near East arrived along the Silk Road and by sea, but the system held fast. Chineseness was too powerful to be dislodged; it was the invaders who adapted. (Link, 2015)

With Chinese culture and traditions being kept static for such a long duration of time, it is not surprising that the Chinese would go out of their way to see a stabilized society. This is another reason why the Chinese seem to prefer more authoritarian governments. Ever since the Xia dynasty, absolute monarchies have held the reins in China, whether the ruler was Han, Mongol, Manchu, or even the self-proclaimed “democratic” leaders in the early twentieth century. Under authoritarian governments, politics is one factor that the public would not have to worry about. Even in Taoism, one of the leading philosophies throughout Chinese history, states, “those who followed the way did not try to give people knowledge, but kept them ignorant. People are difficult to rule because of their knowledge. To rule by knowledge ravages the country. To rule not by knowledge blesses the country” (Stendudd, Tzu, n.d.). With his reasoning being:

Not praising the deserving, prevents envy. Not valuing wealth, prevents theft. Not displaying what’s desirable, prevents confusion of the senses. Therefore: the sage governs by emptying senses and filling bellies, curbing strife and strengthening backs, keeping the people ignorant and without desire, making the learned afraid to act. If he acts without action, order will prevail. (Stenudd, Tzu, n.d.)

Lao Tzu’s ideals are still widespread in contemporary China, and one could definitely see why. With the stress for stability in Chinese society, the citizens believe that the government would do the best for the country, even if it means that some are sacrificed for the greater good, and that they are being good citizens simply by not interfering with the government. With the mentality of pursuing stability, this also requires the factor of collectivism, which is another strong trait found in Chinese ideologies. An additional factor for collectivism has been stated in Wong’s work, which they identified as the since relationship’s in Chinese society start with family but further extends to their extended family and village, and that any honor or face “bestowed upon a family member is shared by the family and beyond” (Wong, 2001). This further stresses the importance of collectivism in society, since if an individual
brings disgrace onto themselves, they would also affect their entire family (and possibly more). This ideology would not stop at the familial level, but also nationally and ethnically. In the end, the pursuit of stability and collectivism in contemporary China has largely influenced the current government’s economic policies and goals.

Contemporary Chinese Economic Policies

After the takeover of mainland China by the Communist Party of China (CPC), the party has taken advantage of the collective identity and utilized it to strive for a more egalitarian society, beginning with the Land Reform in 1948. Though the Economic Reform pioneered by Deng Xiaoping has altered the path to a more individualistic approach, famously saying, “Let some people get rich first” (Deng, n.d.). This method is slowly being adjusted back to its roots by recent policies rolled out by President Xi Jinping. According to Inman, Xi, in his recent meeting with the Financial and Economic Affairs Commision has stressed that the government should “regulate excessively high incomes and encourage high-income groups and enterprises to return more to society” (Inman, 2021).The policies that Xi has pushed out in order to “encourage high-income groups and enterprises to return more to society” (Inman, 2021)7 have shown to line up with the contemporary and historical Chinese ideals of a collective, stable, and egalitarian society.

Some of the policies that were pushed out with the intent of redistributing wealth and achieving wealth and education equality were heavily imposed restrictions on both the online gaming industry and the private education industry. The restrictions imposed on the private education industry were said to be made in order to “reduce the cost of child-rearing”, due to the high competitiveness of the higher education system (Goh, 2021). The guideline,
according to Koty, states that “regional governments are no longer permitted to approve new off-campus tutoring centers providing core/compulsory education. Existing ones must become registered as non-profit institutions” as well as an excessive restriction on online classes (Koty 2021). Knowing this, it could be inferred that the “unfair” advantage that certain students with high-income families would be heavily limited. Needless to say, this policy economically impacted the education industry in China significantly, causing one of the leading private education enterprises, New Oriental Education, to suffer a seven billion dollar loss in market value, about 50 percent of their market worth in Hong Kong (CNN, 2021). In similar fashion, the online gaming industry has also been thoroughly restricted, though this time with the aim “to help prevent young people becoming addicted to video games” (CNN, 2021). This policy prevented anyone under the age of 18 from partaking in any forms of online gaming during weekdays, and only allowed a one hour session per da from Friday till Sunday. Although this policy could be seen as trying to rid the younger population of this so-called “spiritual opium” (CNN, 2021), it could also be interpreted as a means to further restrict the elite class from gaining more capital. As there are over 110 million minors that game regularly in China, there would surely be a decline in game time and money spent gaming as Niko Partners senior analyst Niko Ahmed believed according to a report by CNBC (Feiner, 2021). In the end, these policies have shown to promote, or at least used traditional and contemporary Chinese ideals to justify their means.

In addition, President Xi has also been adopting alternative ways to make sure that the top entrepreneurs in China get the memo on the country’s new campaign to recreate an ideal society. And as Standaert puts it, “many of the activities these entrepreneurs had become accustomed to […] expressing their individuality, starting charitable foundations and educational institutions in their name – are increasingly unlikely to be tolerated in President
Xi Jinping’s China in the coming years” (Standaert, 2021)14 Using the “common prosperity agenda” as a vehicle, the country has already received donations from some of the richest individuals in China. Based on the reports of Buckly, Stevenson, and Li, both Alibaba and Tencent would donate $15.5 billion towards that goal, which includes but not limited to, “rural health care and insurance for delivery workers” (Buckley, 2021). Though that is not all. An article from the New York Times claims that some of the more extreme reforms could include higher taxes on capital gains, inheritance and property, and higher public sector wages to limit corruption and bribery -which has been rampant during the post Deng era- (Inman, 2021). These reforms and pressure towards the ultra-wealthy using the goal of common prosperity could be linked back to the ideals to create the Party’s and the people’s view on creating an utopian society.

Defining American Ideals

The United States, though still a young country compared to its counterpart in Asia, has quickly solidified its position as a world superpower after the second World War. Compared to China, the United States’ national ideology could be identified as liberalism, which pushes for democracy, limited government, republicanism, the rule of law, equality. According to the reports of Tierney, “Americans without liberalism have no idea who they are” (Tierney, 2011). With liberalism stressing for more autonomy for citizens and restrictions on the government, and a protest-heavy culture, it could be inferred that the United States also has a strong individualistic value. This could be backed up by Barone’s article “American Dream”, in which he defines the American Dream as “the belief that anyone, regardless of where they were born or what class they were born into, can attain their own version of success in a society in which upward mobility is possible for everyone. The American dream is believed to be achieved through sacrifice, risk-taking, and hard work, rather than by chance” (Barone, 2021). Its individualistic approach is even more clear in the Declaration of Independence, which states, “we hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights,
that among these are Life, Liberty, and the pursuit of Happiness” (Jefferson, 1776). Notice how in the definition of the American Dream, and present in the Declaration of Independence, there is a strong emphasis on individualism qualities, whether it is to restrict the power of the government, to promote individual economic achievements and fair competition, or the right of equality towards all regardless of ethnicity, social status, or economic situations.

American Economic Policies

For the past 40 years, United States presidents have used such ideologies to push for a Neoliberal economic policy. Neoliberalism, which pushes for deregulation of the market, celebrated cosmopolitanism (the idea that all human beings are members of a single community), and pushed for globalization (Grestle, 2021). This closely relates back to the ideals that founded the United States: deregulation of the market allows more autonomy for the citizens, cosmopolitanism relates back to values that were present in the American Dream, such as the right to give everyone a chance to succeed, and globalism also allows more autonomy for the citizens, allowing for more choices for citizens to choose and trade from. After being kick-started by president Ronald Reagan, it has been the primary economic ideology of presidents in the United States. This, with most of the Neoliberal ideals matching
with traditional American ideologies mentioned in the previous section, makes its policies a prime source for identifying how Neoliberal policies are impacted by current American beliefs.

In recent times, the Trump administration, one of the most significant and controversial administrations, a man which 25% of the nation (as of 2021) still sees as the “true president” of the United States, has pushed out policies that are easily justifiable with traditional American ideals (Brown, 2021). To demonstrate, the Tax Cut and Job Act, which allowed “significant and permanent tax cuts to corporate profits, investment income, estate tax, and more” (Floyd, 2021). At the same time, personal tax bracket rates (percentage of tax based on income level) were also being lowered. According to Investopedia, the top bracket dropped from 39.6% to 37%, while the lowest bracket dropped from 15% to 12%. As seen in Figure 1, the tax percent of the total GDP for both individuals and corporations notably dropped after President Trump was elected into office.

This policy disallowed financial restrictions that the government could utilise against corporations and individuals, which could be argued that it also limited the government’s financial abilities, which could be related back to Americans’ uneasiness with governments which have more authority and resources. Additionally, the reforms towards welfare and medicare programs, which claimed to already drop five-million citizens from its food stamp program, have similar reasoning as the tax reforms (Tankersley, 2020). These welfare program reforms raise requirements that are needed to apply to medicare, food stamps, checks for the disabled, and utilities for households (Kogan 2019). These reforms, justified by the fact that some do not think these social welfare programs are effective at creating equal opportunities, but rather wasting tax money on freeloaders. By these means, it would be easy to spot why president Trump made more restrictions for applying to these programs, which tries to create an equal opportunity for those in need and to keep out those who just want to take advantage of the system

In the end, though it is generally hard to define certain policies with a single ideology, with the evidence and justification, it could be said that these policies are definitely motivated by Neoliberal ideologies. From the impactful tax and welfare policies, it has shown to be used to limit the government’s financial abilities and as well as create a more equal and just competitive market for individuals as well as corporations.

Conclusion

Overall, using contemporary and historical ideologies to try and define economic policies and their goals has created a distinct but reasonable logic for both countries. For China, the belief of working towards a common goal (and under CPC’s rule, this has gotten even more apparent), the stress of stability, and the distinction between the common citizens and government created policies that aimed to even out individuals who have gotten too
much capital, to eliminate private education, which was seen as a mean for the wealthy to try and gain an upper hand in life, and also trying to create “common prosperity agenda” for everyone. On the other hand, the United States, which pushes for a limited government, autonomy for citizens, and equality (though it is for social equality, while China strives for economic equality), pushed Neoliberalist principles onto its economic policies. With some of the biggest examples being the tax and welfare reforms, which tries to limit the government’s participation in the market and as well as creating unfair advantages for certain individuals. These policies push the agenda that aims to promote an individual’s entrepreneurial abilities instead of working collectively to pursue state set goals.

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About the author

Qitian Huang

Qitian is an 11th-grade student at The Houde Academy in Shenzhen, China. Having lived both in China and the United States, he has a unique insight into the daily life and cultural differences between both countries. Qitian has taken great interest in both politics and history, and is seeking to learn more about political and cultural differences around the world. When he is not pursuing his academic interests in politics and history he likes to indulge himself in classic horror movies.

The post Cultural Ties with Contemporary Economic Policies and Reform: A Case Study Comparing China and the U.S. appeared first on Exploratio Journal.

Educational inequality is an extremely crucial and complex problem due to the fact that there are actually various factors that might lead to the inequality of education in society such as a lack of educational resources in urban and rural areas as well as regional inequality. However, the most significant origin of the cause to the educational inequality in China is the feudal ideologies and policies from a thousand years ago. In 1978, undoubtedly, China achieved tremendous economic success due to its economic reform (Henan), but the educational inequality was hard to solve or eliminate since the radical Chinese culture had passed from the generation to generation. The feudal ideology really had an affect on unequal allocation of resources and opportunities for education. However, as time elapsed, the educational system also improved a lot compared to the previous ones. The essay will mainly focus on the changes of educational inequality in China caused by feudal ideology and the differences between rural and urban areas regarding making the better the educational system. 

Gender inequality

Gender inequality is definitely the reflection of both social and economic inequality in China. The radical ideology of gender inequality has already been present in China for a long time and gradually became the predetermined arrangement in society, which even appears in the system of language in Chinese culture. There are also many different phrases and sayings for the son and the daughter, for instance: wangzi cheng long (“Expect one’s son to have a bright future/ Expect one’s son to be a dragon”) ; shengge nǚer peiqianhuo (“The birth of a daughter means the loss of money)” (Ganzhi Di). According to the conventional thoughts that formed throughout history, in patriarchal world, there is a stereotypical assumption that men are more valuable than women that men are not only more powerful but intrinsically more worthwhile than women since only men can deserve power and privilege.

A vast majority of families still expect to rely on sons for old-age support, and are supported with by the traditional saying, “Sending girls to school is useless since they will get married and leave the home” (Hannum12). Compared to boys, girls face lower educational expectations, which measures commonly used to capture educational ambitions— specifically, they indicate the level of formal schooling that one would like to complete, and a greater likelihood of doing household chores due to social acceptance. Even though some girls outperform some boys in some academic areas, they still do not have the opportunity or chance to go school to attain advanced education. Consequently, most families only send the boys to school while the girls mainly stay at home learning how to do the housework due to the fact that most parents have higher expectations of boys than of girls that girls are unlikely to succeed in the labor market in the future. “In China, Li and Tsang (2005) suggest that, because a good marriage is more important than a good job for rural girls’ long-term welfare, some parents may think more about maximizing the chances of a good marriage than about investing in long-term career options”(Emily Hannum). These examples also suggest that the cultural norms in China have lead to the different socialization of boys and girls. 

The conventional ideology mainly exists in the rural areas in China since more children have to compete with more siblings within a family. Especially large gender gaps can be found in rural Jiangxi, Anhui, and Sichuan provinces. For instance, according to the study by Li and Tsang, in Gansu and Hebei provinces, there are 400 hundred households who revealed that they had lower educational expectations for girls than for boys (Li and Tsang). Thus, in these rural areas, most girls stay in the family to help their parents do some farm work and wait to marry a man in the future. Most educational opportunities will be given to their sons due to the cultural norms. Another case study of Gansu province shows that 84 percent of the poorest boys and 90 percent of all other boys in the survey were enrolled in school. About 81 percent of the poorest girls and 85 percent of all other girls were enrolled. Poor girls are the most disadvantaged because the boys practically absorb all the educational resources (Emily Hannum). 

As a result, men have a greater opportunity to attain educational resources due to the feudal ideology(traditional ideology in China: people favor boys over girls)in place, which absolutely affects the trend of the education since a lot of girls do not even have the chance to contribute to the society or pursue their dreams. Inevitably, families still apply the feudal ideology when making decisions on education, and girls’ dreams continue to be buried in their own hearts.

Educational inequality in urban and rural areas

Furthermore, educational inequality occurs obviously in the urban and rural areas due to the unequal allocation of resources and faculties. The hukou system has the direct relation to the separation of urban and rural areas. The hukou system was established in 1958, and was initially used by the Communist government as a means of separating rural and urban populations and restricting rural-to-urban movement (Solinger, 1999; Liang et al, 2007; Kwong, 2006). Consequently, the hukou system not only makes it difficult for rural populations to gain permanent status of residence in urban ares, but also it results in residents in rural areas starting to lack in sufficient state provisions (Henan Cheng). The rural Chinese had to be self-reliant and contribute to the society without any support from society. The migrated workers from rural areas to urban areas did not have rights to enjoy the same benefits as their urban counterparts (Qiang Ren and Qiang Fu), which caused the huge differences between urban and rural areas in China. 

The substantial urban-rural disparities are mainly due to disparities of the teaching resources and school facilities. According to the study by Wang,  in 2001,  40.9% of primary school teachers in urban areas had finished secondary education, while only 20.3% of their rural colleagues had done so; while 23.5% of middle-school teachers in urban areas had at least graduated from tertiary schools, only 9.4% of their counterparts in rural areas had achieved that level of education (Qiang Ren and Qiang Fu). The advanced human capital is actually limited and scarce in rural areas since most qualified human capitals are more incentivized to stay in the city to teach since they can earn higher income. In addition, the rural areas will mainly hire some Minban teachers(community sponsored teachers) who have lower levels of education due to the scarcity of qualified teachers. It shows the striking disparity of the levels of human capital in rural and urban areas, which indicates that students in rural areas cannot possibly attain the accessibility of the advanced resources of teaching. In rural areas, they do not have enough money to buy the teaching equipment, which also leads to the subordinate level of education to students. According to the China Human Development Report, the illiteracy rate was about 11.6 percent in rural areas, which was three times than the illiteracy rate in urban areas. From the evidence, people can clearly see that the illiteracy rate in rural areas is high due to an unequal allocation of resources and human capital. Consequently, it even drags the educational gap to become larger and larger. 

Educational inputs such as school financing or funding also cause the crucial inequalities. According to the study by Yuan,  “the average urban primary per-student expenditure was 1.86 times that of rural per-student expenditure in 2001. The urban-rural gap in educational finance was even greater at the secondary level: per-student expenditure of lower secondary education in urban areas was almost double that of per-student expenditure in rural areas” (Henan Cheng). The government policy of previous times in China also allocated disproportioned resources of education in two areas and neglected the special needs in rural areas such as textbooks, tables, etc. The rural areas during that time did not have enough wealth and because of the lack of support from the government, they could not even have the opportunity to improve the educational resources. Most students did not even have the chance to graduate under that poor educational system and even some families forced their children to quit school due to the fact that they could not continue to afford for their children to study in school. The low levels of resources also could not attract a lot of students in the rural areas to study and thus led to lower school enrollment. As a result, the disparity between rural and urban areas became even wider due to the huge inequalities of the teaching resources and human capital.

Better trend in education inequality

Obviously, the educational inequality was extremely hard to eliminate, but it gradually became better and better in China.

As time elapsed, political priorities and education policies dramatically shifted and changed throughout the history of the People’s Republic of China. The purpose during the China’s period was to emphasize economic development and social equality by implementing various policies in order to reduce the educational inequality. 

In 1949, the central government tried to arrange the new educational system within China, which was totally different from the previous one. Firstly, the system should would have the right political nature and be led by the Chinese Communist Party. Secondly, it would serve the needs of rapid economic development. Many universities were reduced due to the fact that, in this case, it helped the government ease burdens(Ouyang Kang). “In 1951, one-third of all primary and general secondary-school teachers were employed by Minban schools, which refer to the private educational institution. Adult-education programs also contributed substantially to the expansion of educational opportunities in rural areas. Winter schools and spare time literacy programs in the early and mid-1950s affected tens of millions of peasants; worker-peasant schools enrolled smaller numbers of students, but many of these students continued on to college. The effectiveness of these efforts in improving literacy among peasants is well documented” (Emily Hannum).  

In 1958, the Great Leap Forward movement created the new educational policy to motivate the equality of education. Many policies during the movement focused on basic education and many universities were moved into the rural areas. For instance, more work-study opportunities and part time-schools were opened in the rural areas in order to expand the opportunities for poorer people. Thus, the rural students had the chance to attain better educational resources. In 1977, the national standardized examination, called gaokao, was highlighted, something extremely meaningful for the the Chinese society. According to Wang and Ross (2010), the gaokao brings about opportunities for success and social mobility, which is especially attractive to the students in rural areas where opportunities to economically improve their well-being and lives are scarce. Every student in every area of China has the opportunity to sit the gaokao, no matter from the rural areas or urban areas, which can even be the turning point for rural students. There was a huge expansion in university students immediately after the change of political systems in education. “The number of university students increased from 89% in 2001; the percentage of those who could enter university increased from 9.8% in 1998 to 13.2% in 2003; Master’s degree students increased 93%; and Ph.D. students increased from 45,000 in 2001 to 77,000 in 2003, an increase of 71%. It is more meaningful if you think that all of these increases happened in three years and the numbers of university lecturers did not significantly increase. The proportion of university lecturers to university students changed from 1:8 before 2001 to 1:16 in 2003”(Ouyang Kang). Moreover, the government started paying more attention on the educational system and resources in the rural areas, and increasingly provided more funds in order to ensure the rural students’ sufficient resources. 

During 1985 to 1990, China started to promote the nine year compulsory education. The People’s Congress passed the decision of the new educational system and that “all the children at age of six should have the right for schooling regardless of gender, ethnicity, or race.” The law also requires that “the state, the community, schools, and families should guarantee the right of all children for schooling” (Zhao Tiedao). The ideology of “education for the people and by the people” promoted China to construct a fair society and let every child has the right to access education. Consequently, massive publicity campaigns raised funds to improve school facilities. Therefore, the proportion of dilapidated school building reduced from 17 percent to 2 percent, which meant that the conditions of schools were improving and provided solid groundwork for universalizing compulsory education in rural areas (Zhao Tiedao). A lot of institutions also raised funds and donated money to rural areas in order to help students in the impoverished areas get the balanced educational resources. From the 1996 to 2000, communities including some overseas contributors donated almost 31 billion RMB to support the rural compulsory education program. For instance, the Project of Hope raised 2 billion RMB for construction of 8,300 new schools in rural villages, which attracted 2.3 million dropout children back to school. Besides, 10,000 sets of library books were provided to rural schools and 2,300 rural teachers were trained. The Spring Bud Project, implemented by the All-China Women’s Federation, raised 500 million RMB which assisted getting 1.3 million girls from poor rural and ethnic families access to schooling”. (Zhao Tiedao). By changing the educational system into the nine year compulsory educational system, China reduced the illiteracy rate and more people could enjoy the equal rights of education. The situation of educational inequality became better and better. 

Furthermore, the feudal ideology of gender inequality was gradually eliminated in mind and practice, and women started to have more rights. In 1949, newly introduced marriage and labor laws improved the social statuses of women and peasants. It was the turning point to turn the situation for women. During the time of the cotton textile industry, women proved their power to earn a lot of income and changed the perception of women being less capable than men. “For women to earn high incomes in today’s world, however, it is not necessary to have identical conditions to those in Imperial China. With advances in technology and changes in institutions, economic opportunities favoring women provide a richer variety of ways for women to earn high incomes today” (Xue, Melanie Meng). Women also had the same strength to complete the tasks as the men. As more people get educated, the ideology of gender inequality started to get adjusted and alternated toward an equal and fair path. Although the cultural norms still exist nowadays, women have equal rights, and have the ability to express their thoughts, and can gain the same level of education. 

In China, educational inequality was an extremely serious problem due to the social norms of the ideology called gender inequality and unequal resources in rural and urban areas. However, after  the long term of changes, the educational inequality started to eliminated and everyone has the rights to attain the same level of education in China. 

Citations

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‌“Gender Inequality of Classical Chinese: A Study of Gender-Based Words – ProQuest.”

www.proquest.com, www.proquest.com/openview/eb1426c7b73fa36727c7f66616a90aa8/1?pq-origsite=gscholar&cbl=18750&diss=y. Accessed 20 Sept. 2021.

Qiang, Fu. Educational Inequality under China’s Rural ^ Urban Divide: The Hukou System and Return to Education. 2010.

‌Hannum, Emily, et al. Family Sources of Educational Gender Inequality in Rural China: A Critical Assessment. Elsevier, Sept. 2009.

‌book118.com. “《浅谈我国公民受教育机会不平等的原因及对策.Pdf》-支持高清全文免费浏览-Max文档.” Book118.com, 2015, max.book118.com/html/2015/0729/22212459.shtm. (Chinese)

‌“Study: Gender Inequality Serious in Rural Areas.” www.china.org.cn, www.china.org.cn/english/China/141286.htm. Accessed 20 Sept. 2021.

‌Wang D 2003, “China’s rural compulsory education: current situation, problems and policy alternatives”, WP 36, Institute of Population and Labor Economics, Chinese Academy of Social Sciences, Beijing, http://iple.cass.cn/file/36.pdf 

Hannum, Emily, and Yu Xie. Trends in Educational Gender Inequality in China: 1945-1985. 1994.

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About the author

Ana Mao

Ana is currently a Senior at the Shanghai High School, International Division.

The post The Changes in Chinese Education throughout History appeared first on Exploratio Journal.

Abstract

Over the past 20 years, China could be seen rising steadily to one of the world’s great powers. Politically, China has an active foreign policy, and actively engages in protecting territorial sovereignty and gaining international influence. Economically, by joining the WTO, China has since transformed into a world economy. Externally, these changes also result in a variety of economic and political counterattacks by the US. Internally, the Chinese Communist Party’s determination to consolidate its power has led the nation into increasingly centralized both economically and politically. This paper is going to argue that attempting to reconcile economic liberalization with authorization is not sustainable.

Challenges Faced by China amid Economic Liberalization

China’s economic rise in the past 20 years saw the nation emerge as a world superpower thanks to free-market reforms undertaken in the 1990s. Externally, it has been active in asserting control over a large share of territory in the Pacific and more generally, in exercising international influence; internally, it is focused on solidifying the CCP regime by more tightly controlling the country and its citizens. However, these changes are increasingly at odds with
economic liberalization; the benefits that come with opening the market cannot coexist with tighter control by the party. As a result, because it is not possible to reconcile authoritarianism with free markets and private property, the Chinese government’s current policy is not sustainable.

Literature Review

China’s economic rise to one of the world’s great powers is undeniable. But opinions differ on whether China will compete with the International order created by the US hegemony 3 and whether it has the ability to become the next hegemony. Some findings suggest that there are critical barriers China must cross in order to create a hegemony like the US.

In “China’s rise and US hegemony,” Rosemary Foot argues that despite China’s material resurgence, it is not able to become a true hegemon due to its inability to find a balance between protecting its own interests and reassuring its neighbors that it does not threaten their interests (Foot, 2019). China’s material resurgence in recent years is evidenced by increased exports, investments, and trade, a growing scientific, particularly space ambition, and having the world’s second-largest defense budget. China’s management strategy in East Asia, despite attempts to reassure its neighbors through creating international organizations, is characterized by its determination to protect its sovereign claims and engage in bilateral relationships such as in the BRI. As Foot argues, China would be at most a restricted constituency due to the leveraging of its economic and military power against seeking bilateral relationships which create normative order and stabilize the region.

Some findings suggest that China is beginning to compete with the US, and possibly create a new international order.

Mearsheimer uses the concept of offensive realism to argue US engagement policy with China is doomed to fail, and this paper takes this as the point of departure to argue that China’s expanding power to protect its interest is inevitable (Mearsheimer, 2001). In international anarchy, a world absent of a central and dominant authority, since states can never be sure of others’ intention, in order to maximize security, a state would always compete with each other. Mearsheimer uses this to predict that in order to achieve maximum security, China would want to create a regional hegemon, hence it would not settle with US possible containment policies.

Findings from Cooley and Nexon further discuss China’s threat to US hegemony and suggest that China is beginning to compete with US hegemony and possibly create a new international order (). According to their paper, since 1997, China and Russia made it clear their goal was to promote a multi-polar world; they allied in the UN, tolerated each others’ international projects, and both created international institutions to gather more allies. China also routinely provides economic aid to other countries, with the goal of gaining allies in these international institutions. These countries, which before were either directly or indirectly a part of the US hegemonic project, now have a choice to join China. The post-Cold War liberal international order was also challenged by illiberal competitors in many areas. Far-right organizations in traditional western liberal countries have gained increasing international recognition and support from Beijing and Moscow; many countries such as China began to sponsor their own NGOs to compete with western ones; authoritarian countries began to believe liberal ideals are a threat to their security. These movements can be understood as evidence of China’s increasing power in the world.

Malkin takes on a different approach and argues that China has the potential to challenge the US structural power from the aspect of productive power (Malkin 2020). He argues that the recent Chinese policy MIC 2025 had allowed it to ascend in the global value chain. China is able to increase its influence by capturing more global intangible assets and raising its market share using favorable IP commercialization, standardization, and competition policies. This paper is going to evaluate China’s aggressive economic approaches like this.

China’s foreign strategy

Over the past 20 years, China’s foreign policy can be described as highly active. This paper will categorize its policy as both protection of territorial sovereignty and attempting to gain international influence.

Protecting territorial sovereignty has long been one of China’s biggest foreign policy goals. One of the most important strategic competitions China is involved in is over the South China Sea (SCS). With an estimated 11 billion barrels of untapped oil and 190 trillion cubic feet of natural gas, SCS, countries around the region such as China, Brunei, Indonesia, Malaysia, the Philippines, Taiwan, and Vietnam have been vying for control over the region (Territorial disputes in the South China Sea). Recently, China has been seen through satellite images working to increase the size or even build new islands in an attempt to gain more control. China’s strategy in SCS can be seen as an attempt to gradually shift the status quo in its favor without engaging in actual military conflicts. Some refer to this as a salami-slicing strategy where China slowly captures and sets up defenses around new territories to gradually wear its opponents down.

Another strategy China uses to create influence is by engaging with international alliances and organizations while also building regional institutions. For example, China’s power and influence in the UN are increasing significantly as it provides economic support to other countries. In a United Nations Human Rights Council in 2020, a total of 53 countries supported China’s new national security law, overwhelming the 27 members that were against it (Landslide support for Hk law at UNHRC). China has also been actively creating and joining regional economic institutions and signing trade agreements as a means to better connect with other countries in the regions such as Regional Comprehensive Economic Partnership, Comprehensive Agreement on Investment, Shanghai Cooperation Organization, and Asian Infrastructure Investment Bank.

Alongside this is the promotion of the Belt Road Initiative (BRI). BRI manifests China’s attempt to use its economic leverage to gain allies and influence their policies to oppose the US existing order. However, there are a few problems with this kind of foreign policy. First, using economic leverage to build relationships is not secure. It is likely that once China becomes unable to provide economic support, its allies will quickly turn away. Second, China’s showing off its military power, as in the case of SCS, undermines its credibility that it would be able to maintain safety and order in the region. Third, China’s activity is predatory: many countries China works with have low credit rankings. This slows BRI investment deals and raises concerns inside China regarding the implementation of BRI

US policy on China

American activity has largely been to engage with China economically, believing this would push China towards free-market principles. In 2001, the House of Representatives approved the US-China Relations Act of 2000, which essentially showed their support for China to join the WTO. Consisting of 164 members as of 2021, WTO encourages freer trade, fewer economic barriers, and better trade deals among its members. Then-president Bill Clinton hoped that by joining the WTO, China could accelerate the progress of opening up its economy to the rest of the world, and naturally move away from the communist political model and join the US-led liberal democratic order. Specifically, China would have to reduce tariffs, guarantee intellectual property rights. Politically, WTO and its members can serve as a check for the Chinese communist government. In reality, while China’s economy grew remarkably, its political transformation did not go as the US hoped it would. From 1990 to 2012, the number of people in China living in extreme poverty had fallen two-thirds of the population to under 0.5% ); China’s economy now is 11 times larger than it was in 2001 (China Poverty and Equity Brief). However, the CCP was able to use economic growth to legitimize its rule in China. During the past 20 years, it maintained tight control in Chinese private and public businesses, with an estimated 70% of about 1.86 million private companies having internal CCP-ties.

Clinton also hoped Americans would profit economically from China joining the WTO. In reality, while American consumers benefited from cheaper Chinese products and corporations took advantage of China’s large market, much American labor in the manufacturing industries lost jobs due to China’s competition. President Trump, during his 2016 presidential campaign, used this as rhetoric, saying “They’re using our country as a piggy bank to rebuild China,” Trump said. “We have to stop our jobs from being stolen from us.” A report by the Economic Policy Institute estimates the growing trade deficit with China has cost 3.7 million American jobs since China joined WTO in 2001. It is notable the report also found job losses from the trade deficit in the electronic and computer parts industry accounted for 36.2% of all job losses (Scott & Mokhiber, 2020). The US used to have a comparative advantage in advanced technology, but the fact that China now dominates manufacturing in this industry shows that the former took full advantage in using the opportunity to join the WTO to transform its industrial focus.

While the US economic policy on China at the start of the century was mainly concerned with helping it open up its market to the world, its policy has since changed rapidly in the last 5 years. The US began to pass tariffs and impose sanctions aimed to discourage China’s acquisition of America’s technological expertise. To the US, China’s use of industrial policies, subsidies, and regulatory authorities to acquire technological skills is aggressive. The Made in China 2025 policy, for example, was aimed to improve China’s competitiveness in technological industries by gaining expertise from the US firms. The US suspects IP theft and cyber espionage may be ways that China uses to achieve its goals.

In a 2018 report, the US trade representative found China engaged in (1) forced technology transfer, (2) cyber-enabled theft of U.S. IP and trade secrets, (3) discriminatory and non-market licensing practices, and (4) state-funded strategic acquisition of U.S. assets. Subsequently, the US Congress passed a tariff on Chinese imports worth approximately 250 billion dollars, while China countered with a tariff of about 110 billion. The US imports from China had fallen from 538 billion to 434 billion dollars from 2018 to 2020, just under 100 billion dollars in 2 years (United States Census Bureau).

Imposing tariffs, though significant, was not the only action taken by the US on China, however. The Trump Administration tightened technology exports to China’s Huawei and restricted the use of universal funds to buy the company’s equipment. The Administration also posed sanctions on certain entities and officials in Xinjiang due to the findings on crime against humanity and genocides. Reacting to the National Security Law in Hong Kong, the US passed a series of sanctions and began to eliminate Hong Kong’s special economic status in American trade law. Although the two countries signed a phase one agreement in January of 2020, easing the tensions from the trade war, the economic competition between the two countries is very much alive and has not de-escalated.

Cybersecurity is one of the aspects that intensified China-US relations. The US accused China of endorsing or supporting espionage attacks about a decade ago. On May 19, 2014, for example, the US indicted 5 Chinese military hackers suspected of cyber espionage against 6 US nationals in nuclear power, metals, and solar products industries (The US Department of Justice).

Since this was a hack carried out by members of the Chinese military, it represents the first charge by the US against a state actor in hacking. In July of 2021, the Biden administration accused China of cyberattacks, and according to their findings, China’s hacking has transformed into a far more sophisticated satellite network that perpetuates American companies and interests. The US position on Taiwan (ROC) also causes issues with China. Taiwan’s strait issue has long been the main focus of China’s foreign relations, and China strongly asserts sovereignty over Taiwan.

The US position on Taiwan can be seen as a strong indicator of the relationship between the two countries. While the US had ceased recognizing ROC since 1979, due to the Taiwan Relations Act in 1979, the US continues to provide military support to maintain Taiwan’s self-defense capability. The US policy on Taiwan had been purposely kept ambiguous, in order to stabilize cross-strait relations. However, during President Trump’s administration, US-Taiwan ties became significantly stronger following a series of new laws passed by the US. Following the Taiwan Travel Act in March of 2018, high-level diplomatic officials from two countries were encouraged to visit each other. In March of 2020, Trump passed the TAIPEI Act, which further increased the scope of their relationship. Additionally, the Trump Administration escalated arms sales, totaling 18,277.8 million dollars worth of arms to Taiwan in 4 years. In comparison, in 8 years as president, Obama sold only 14,070 million dollars worth of arms.

China has increasingly pressed the Taiwan issue. It has not held back from taking action. In fact, in 2020, a year where most countries were affected by the Covid-19 pandemic, China made a record 380 incursions into Taiwan’s air defense identification zone (China’s record entry of Taiwan Airspace, 2021). This may be in part because Taiwan’s ADIZ actually stretches into China’s mainland border as shown in Figure 1, so the incursions may not necessarily threaten Taiwan. However, these actions could be seen merely as a political choice by China directed at the US and its allies for their continuous support for Taiwan; most countries believe that a settlement should be reached on this issue.

Internal Issues

Doing business in China is not necessarily straightforward. It ranks well in the World Bank’s ease of doing business index. But there are some areas of weakness. For example, China is ranked 105 in the world for tax collection. Transactions were not adequately protected by laws and that the government reserves the right to make changes in favor of domestic firms. The ranking is measured by the number of payments, time, and the total tax rate of a case study firm, usually a foreign one. This shows that China imposes a lot of restrictions on foreign firms in order to protect the domestic ones, showing that China is very internally centralized, with a top-to-bottom system. China is ranked 80 in ease of getting credit, which, according to the World Bank “measures the legal rights of borrowers and lenders in secured transactions (or collateral) laws and bankruptcy laws to assess how well these laws facilitate lending.”

This spills over into other areas of business.

Most recently, through passing a series of laws aimed at limiting the expansion of big tech companies, the Chinese government shows its determination to prevent the tech titans from gaining too much political power and limit external, western influence. In April 2021, China imposed a series of restructuring on Jack Ma’s Ant Group, which not only undermined its values but also split the powerful tech firm into several independent businesses. With over 730 million monthly users per month, Ant’s Alipay has a huge amount of consumer data that not only gives it a big advantage in competition but also prompted the government to take action. Other major tech companies such as Tencent and Didi, also faced a crackdown. Since being fined for monopolistic behavior, their stock values had fallen 7% and 27% respectively (Grothau, 2021).

In 2018, the National People’s Congress passed a constitutional change that removes the presidential term limit and allows President Xi Jinping to serve as president for life. This change effectively centralized political power in China into the hands of a single man. Just 10 years ago, within the CCP, there were various factions and then-president Hu had to listen to different opinions. Now, Xi was able to elevate his status and ideology, which possibly meant a more centralized and authoritarian communist government that reduces market power.

According to the analysis by the World Bank, China’s rising inequality from 1990 to 2010 can be attributed to the rapid growth of income from the richer group, growing rural-urban difference, and income from private property, which in turn was a result of China’s opening up its market during the 1990s (Sicular, 2013). Xi’s policy of focusing on internal centralization of power over market growth had led to an improvement in China’s income inequality. According to the World Bank, China’s Gini coefficient data rose steadily from 1990 and peaked at 43.7 in 2010, as shown in Figure 2. Then declined sharply until 2016, the last year for which the World Bank has data.

The fact that the income of the richer group is growing faster than the poorer group is a reflection of a capitalistic market that China was gradually transforming into. While people who live in cities have access to a more modern and capitalistic market and experience rapid income growth, the income of rural households, though growing, is not increasing nearly as fast (China Poverty and Equity Brief from World Bank).

The trend changed in the 2010s. Besides the increasing number of SOEs and tech companies crackdown by the Chinese government, it also implemented a series of pro-farmer policies, personal income tax reform, and financial inclusions, which were aimed to reduce the rural-urban gap. With the “Grain for Green” program aimed to mitigate flooding and soil erosion, the Chinese government sent 124 million people from rural areas, mostly farmers, to transform farmland susceptible to soil erosion into forests. The program not only successfully grew its forest area from 16.74% to 22.5%, an amazing achievement, but it also helped improve the economic situation for millions of rural Chinese people, showing the government’s determination and ability to greatly influence the nation’s economy (How China brought its forests back to life in a decade).

The growth of SOE involvement in Chinese Economic life, instead of reform and reduction of state-owned enterprises (SOE) in China, is also an indicator of Xi’s relentless effort to increase the state’s involvement in the economy. In the 1990s, China went through a series of market reforms under Deng Xiaoping. As a result, state-owned enterprises began to adopt western governance structures and aimed to improve efficiency and productivity. In the 2000s, with the creation of new government bodies such as the State-owned Assets Supervision and Administration Commission of the State Council (SASAC), the central government began to exert more control over the SOEs.

The Xi Jinping era saw an even larger role played by the SOEs. Since 2003, central SOEs in China have grown from 96 to 189, according to the SASAC website. And, according to the World Bank, although it only accounted for around 25% of the economy, these SOEs were involved in key industries such as energy, aviation, finance, telecoms, and transportation (Zhang). CCP also uses these SOEs to implement its policies, such as the development of semiconductor industries and participation in projects related to the Belt Road Initiative. These actions undermine free-market principles.

Megamerger and global implication

The monopolistic position of these SOEs also gives them an advantage in competition against foreign firms. The government will bail out the troubling SOEs by either giving them lower interest rates or helping merge the companies in megamerger deals. Through these megamergers, China would be able to create large competitive firms that can compete on the global stage. This would undermine global competitiveness in certain sectors as these Chinese firms can offer products at much lower prices with support from the Chinese government.

Media Control

Another way that the CCP uses to gain internal control is through repression of ideas that threaten the legitimacy of the party. There are two forms of repression: media censorship and suppression of minority groups. The Chinese government had long kept control over traditional and new media by using firewalls, jailing up journalists, or targeting publications or websites. Chinese internet censorship is especially notorious for its strict censoring system, known as the Great Firewall. Western websites such as YouTube, Facebook, and some Google services are banned. For two consecutive years, Freedom House ranked China last out of 65 countries in media freedom.

This kind of repression by the Chinese government was not done without a reaction from the public. In more subtle ways, bloggers in sites like Weibo develop an extensive series of pubs, slangs, and memes to avoid censors and voice their own opinions. Some Chinese Internet users also use software programs such as Ultrasurf, Psiphon, and Freegate to get around the firewall. In fact, according to the US Congress, around 1 to 8 percent of Chinese Internet users use proxy servers or VPNs to get around the government’s censor (China, Internet Freedom, and U.S. Policy). Public dissent of government restrictions is rare, but not completely unseen in China. Nobel Peace Prize laureate Liu Xiaobo was a prominent activist who opposed the CCP’s oppressive regime and censorship in China. In short, despite CCP’s wide-reaching measures to impose restrictions on Chinese people, their actions are not completely accepted and there are voices of dissent in China.

China also suppresses minority groups that are culturally different from the Han ethnic group. A prominent example is the Uyghurs in Xinjiang. They are a mostly-Muslim ethnic group in the northwestern region of Xinjiang, and China has been accused of committing a crime against humanity and genocides. The Chinese build re-education camps that use Uyghurs as forced labor. They also create an extensive network of surveillance, including police, cameras, and checkpoints that scan and record individual faces. They actively target religious figures in the regions, in an attempt to eradicate Uyghurs culture.

Conclusion

On weighing up the evidence, we find that CCP is trying to walk a very tight line between authoritarianism and free-market principles, a difficult policy to achieve. Centering around territorial sovereignty protection and gaining international influences, China’s foreign policies are very active. Its activities in the SCS, involvement in international institutions such as the UN, and promotion of the BRI show its commitment to become a global power.

The USA’s relationship with China has intensified in the past 30 years as China swiftly grew to great power. Economically, China’s joining of the WTO has benefitted China significantly, as the former was able to maintain its authoritarian political structure while reaping the benefits from opening its international market. Therefore, the US has taken a variety of economic counterattacks, ranging from tariffs to sanctions on Chinese officials. The two countries also engaged heavily on other issues such as cybersecurity and cross-strait relations. Although a direct conflict is unlikely to happen between the two nations, they were actively opposing each other in a variety of ways.

Internally, under President Xi’s leadership, China is gradually heading towards a more authoritarian government, which will very likely be at the expense of its economic growth. China’s crackdown on tech companies, removal of Xi’s term limit, and policy addressing income inequality, and the number of SOEs can all be seen as evidence of Xi’s relentless effort to centralize the government’s control. As China’s internal repression begins to extend, the legitimacy of the ruling party will very likely be called into question.

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About the author

Cheng-Chieh Chiang

Cheng-Chieh is interested in political science, economics, and sociology and loves golfing

The post Challenges Faced by China amid Economic Liberalization appeared first on Exploratio Journal.

Abstract

This paper investigates why the mask compliance rates were significantly higher in Taiwan than in the United States during the COVID-19 pandemic. This distinction can primarily be represented by an individualist vs. collectivist mindset, associated with Western and Eastern countries, respectively. Mask wearing was influenced by collectivism; Taiwan’s proximity to the 2003 Severe Acute Respiratory Syndrome (SARS) epidemic and the subsequent policies implemented; cultural norms; psychological factors including higher risk attitude, sensitivity to social norms, and compliance with personal surveillance; and demographics including race, political ideology, and social class. Mask wearing is negatively associated with infection rates but is not fact based or logical: multiple psychological and cultural factors contribute to this compliance variability. Therefore, those that don’t comply are not purely defiant; individualists and collectivists just have a different belief system in what they value and how they behave. As a paper that explores reasons for noncompliance, from a public policy perspective, the message in compliance requests must be tailored to a specific belief system that serves an individual and group’s best interest while respecting personal values.

Keywords: COVID-19, mask-wearing, culture, individualist vs. collectivist, psychological factors

Why Mask Compliance Differed in the United States and Taiwan During the COVID-19 Pandemic: How Individualist vs. Collectivist Cultures Respond in Uncertain Times

COVID-19, a disease caused from SARS-CoV-2 virus, first detected in Wuhan, China, in December 2019, has been a test of responding to health regulations. Common symptoms include cough, fever, chills, loss of taste and smell, just to name a few. Most cases are mild, with symptoms persisting a few days, but some cases are very severe, requiring hospitalization. The virus has ravaged through borders and taken the lives of millions worldwide. Even though the severity of the pandemic varied by country and demographics, the COVID-19 pandemic was an experience that everyone dealt with. However, the responses, attitudes, and behaviors of the citizens of different countries shed light on how people deal during times of uncertainty. Two contrasting examples include the United States and Taiwan. These two countries have significant differences in mask wearing compliance, defined as wearing a mask when in close contact (within 6 feet) of non household members (Key, 2021).

In a literature search of studies on the mask compliance rates between Eastern and Western cultures, there were multiple studies on the compliance rates and reasoning behind this behavior in Western countries, but limited studies in Eastern countries. This would suggest that because the compliance rates are so high in Eastern countries, researchers aren’t conducting studies on why people complied or how to get people to comply, instead they’re more interested in why people DON’T comply.

According to a study conducted by the University of Southern California’s Dornsife Center for Economic and Social Research, approximately 83% of Americans agree that masks are an effective way to protect themselves from contracting Americans report actually wearing masks when in public places or in close contact with members not of the same household (Key, 2021). Another study found that 64% of Americans that report not wearing a mask responded, “It is my right as an American to not wear a mask” or “It is uncomfortable.” (Vargas & Sanchez, 2020).

The Taiwanese government, on the other hand, instituted a mask mandate with a fine between $100-500 USD for noncompliance (Ministry of Health and Welfare, n.d.; Ministry of Health and Welfare, n.d.). However, there were some reports of non-compliance in some cities in Taiwan. For instance, 604 fines were given in Kaohsiung within 1.5 days (Zheng, 2021) and 848 fines given in Taichung within 2 months (Hong, T. & Lǚ, Z., 2021). Both cities have a population of around 2.7 million, so based on this statistic it can be speculated that the non-compliance rate in Kaohsiung and Taichung is about 0.02% which is still significantly lower than the approximately 50% noncompliance rate in the United States. This finding raises questions on why there is such a big disparity.

The United States has over 330 million people with diverse backgrounds, socioeconomic levels, and beliefs. When the pandemic hit, those outside of the United States saw how a high-income country like the United States dealt with unprecedented circumstances. As of October 2021, the US has over 43 million confirmed cases and 688,000 deaths (World Health Organization, 2021).

Conversely, Taiwan is a densely populated island off the coast of Mainland China with over 23 million people. Due to its proximity to China, where the virus originated, and constant air travel to and from, Taiwan was expected to have the 2nd highest number of cases. However, this was proved to be incorrect. Taiwan along with other countries like Singapore and New Zealand were able to implement policies and community-based preventative measures to slow the rate of transmission and infection rates. By April 2020, the local transmission was at zero (The Center for Systems Science and Engineering (CSSE) at Johns Hopkins University, 2021).It stayed that way for about a year. When comparing infection and mortality rates, as of October 2, 2021, the confirmed cases per million people in Taiwan and the United States is 680 and 131,020, respectively. The confirmed number of deaths per million people in Taiwan and the United States in 35 and 2,103, respectively (Ritchie et al., 2020). These statistics illustrate the significant contrast in the severity of the pandemic in these two countries with the US infection rate about 200 times that of Taiwan and the US mortality rate about 60 times that of Taiwan. Why is there such a major difference? How did this happen? What lessons can other countries learn and what do the actions by Taiwan tell us about their attitudes and cultural norms?

Specific factors that can explain why the Taiwanese and Americans responded differently to the pandemic lie mainly in cultural differences. These distinctions include Taiwan’s past experience with SARS, established social norms, different healthcare systems and access to resources, an individualist vs. collectivist mindset that serves as the foundation for psychological factors, and diversity in the population.

Past Experience with SARS: Proximal vs. Distal Threat

Taiwan had a greater proximal distance than the United States did to the SARS epidemic in 2003. General psychological principles suggest that first-hand experience has a greater impact on someone than watching from far away. From Taiwan’s experience with SARS, the government put policies in place for controlling another global health crisis, such as universal mask-wearing, quarantine requirements instituted in February 2020, closing down borders to foreigners in March 2020, and contact tracing systems after the first identified case in China (Taiwan Centers for Disease Control, 2020). However, Americans had no prior experience with a pandemic to this level. Given Taiwan’s past experience in dealing with a health care crisis, the Taiwanese were more familiar than Americans were with healthcare recommendations when these preventative measures were put in place to curb the spread of COVID-19. Additionally, in the beginning of the pandemic, Americans were not directly involved or affected by the pandemic because of its origin in China. This feeling was bolstered by Trump’s rhetoric calling COVID-19 the China virus, resulting in some Americans believing that they could not get the virus because they had limited a relationship with China. For instance, they weren’t Chinese or planning on visiting China soon.

Differences in the Governmental Leadership

Health Care Services

Another reason is the difference in access to health care services. In the United States, there is no universal health care. Universal health care ensures that all citizens have access to health care services when they need it without financial burden. About 8% of the US population is uninsured (Keisler-Starkey & Bunch, 2020). Given the dozens of insurance companies, including in the public and private sectors, Americans pay different fees, resulting in the fragmented health care system that provides them varying degrees of access to certain medical services. The average annual health insurance in the United States is $5,940. This number fluctuates given location and different insurance tiers. Some plans can reach an upward annual cost of $8000 (Price, 2021).

Taiwan, on the other hand, has the National Health Insurance (NHI) System which provides universal health care to 99% of the population. The NHI provides citizens with “SMART” cards, which store a patient’s medical history and records.

After the first confirmed COVID case was identified in China, Taiwan took strict actions to prevent the transmission to its island, given the frequent flights between Mainland China and Taiwan. Taiwan already had a public health agency, the Central Epidemic Command Center (CECC), instituted after Taiwan’s experience with SARS in 2003. The CECC responded to the COVID-19 outbreak and followed pre-established protocols to control a pandemic and had access to other data from various government agencies.

On January 20, 2020, when the CECC was activated, patients’ medical history from the “SMART” cards was integrated with their travel history and data. From there, a system categorized each citizen into high risk or low risk for contracting the virus. High-risk individuals were those who had traveled to high-risk areas, such as Wuhan, and low-risk individuals included those who had not traveled abroad and had no preexisting health condition. After this integrated information was stored on a citizen’s “SMART” card, low-risk individuals were ordered to buy a week’s worth of masks and could live normal lives. High-risk individuals, on the other hand, were sent into a two-week quarantine after which they could join everyone else (Wang et al., 2020; Vox, 2021). Quarantines as such were effective because it controlled the spread and didn’t rely on quarantining only symptomatic individuals, as asymptomatic individuals have a high chance of transmitting the virus before developing symptoms, if they develop symptoms (Summers et al, 2020).

Taiwan also banned foreigners from entering and in March 2020, the CECC categorized everyone flying into Taiwan to be considered high risk so they all had to undergo isolation quarantine. To make sure no citizens left their quarantine facility, the CECC tracked people’s location using cell phone data. There were also daily phone call check-ins to monitor any possible symptoms as well as occasional in-person check-ins (Vox, 2021).Taiwan also instituted a fine between NT $200,000 and NT $1,000,000 (approximately $7000 USD and $36,0000 USD) for breaking quarantine rules (Ministry of Health and Welfare, 2020).

However, studies have shown that only relying on case-based preventative measures such as quarantine and contact tracing wouldn’t have been sufficient for controlling the pandemic. Instead, population-based measures, such as wearing masks and social distancing, were useful in the initial containment of the virus (Ng et al., 2020). Taiwanese attitudes towards wearing masks and having a collectivist mindset, discussed later in the paper, also helped enforce these measures. Additionally, the then Vice President of Taiwan, epidemiologist Chen Chein-Jen, had broadcast announcements to assist citizens in population based measures such as mask wearing, frequent hand washing, and preventing mask hoarding. Similarly, the CECC set a fixed price for masks and used funds and the military to increase mask production. By January 20, 2020, when the CECC was activated, the government had 44 million surgical masks and 1.9 million N95 masks (Wang et al., 2020).With an integrated health insurance system, quarantine requirements, and resource allocation for mask production, Taiwan was organized and prepared to contain the virus.

U.S. Response to COVID-19

Compared to Taiwan’s approach, the United States’ response to the pandemic was completely different. To start off, the federal government put the responsibility of controlling the pandemic onto the state and local governments. This led to a divided nation, with different states instituting different policies, resulting largely from political ideology (Lewis, 2021).

Additionally, during the beginning of the pandemic, there was limited testing and even so, testing criteria was too high, mainly for symptomatic individuals admitted to hospitals, likely to have COVID-19 (Lewis, 2021). The Centers for Disease Control and Prevention (CDC) also released a flawed test, reporting that it could fail 33% of the time (Temple-Raston, 2020). Furthermore, the CDC reported that the spread of COVID-19 likely started in January/February 2020. However, the surveillance systems for detecting the virus and reports of flu-like symptoms were insufficient allowing the virus to spread undetected for more than a month (Jorden et al., 2020).

There was also mixed information from then-President Trump, government agencies including the CDC and the World Health Organization (WHO), and the behaviors from local officials. Examples include Trump’s denial of the seriousness of the virus as well as government agencies changing their message for mask guidance in part due to medical supply shortages for hospitals and health care workers (Molteni & Rogers, 2020; World Health Organization, 2020). The mask guidance during the beginning of the pandemic sent confusing messages for further encouragement of mask-wearing. Until April 2020 for the CDC and June 2020 for the WHO, these agencies only recommended masks for those experiencing symptoms, but it has now been established that the virus can also spread from asymptomatic individuals. Consequently, it creates confusing mask guidance as well as making it hard to know who and which government agency to trust.

Lastly, the US had insufficient contact tracing and quarantine policies put in place, which seen from other countries, such as Taiwan and New Zealand, had a role in attenuating the transmission (Lewis, 2021).

Individualist vs. Collectivist

One way to further understand the striking difference between these two countries is by looking at contrasting social and cultural norms. These perspectives can differ broadly and are learned distinctions in behavior imposed by cultures, through family, friends, classmates, and more. Psychologists that study cultural differences have found a distinction between Eastern and Western culture which provides insight into the difference in pandemic responses. This distinction can be represented by an individualist vs. collectivist mindset, ideas put forth by Markus and Kitayama. An individualist mindset, associated with many Western countries, puts the individual or self above the group. These individuals value and have personal independence. Collectivists, on the other hand, associated with many Eastern countries, have strong social ties and a sense of belonging to their group. Collectivists are more likely to agree that they are willing to sacrifice their own self-interests for the well-being of the group and that their happiness depends largely on the happiness of those around them. Individualists are more likely to agree that they often do their own thing and that whatever happens to them is their own doing, emphasizing the responsibility for personal well-being (Lu et al., 2021).

To illustrate the prevalence of individualist vs. collectivist cultures, in collectivist cultures, it’s more normal to see families of multiple generations living together. In the United States, a record-breaking 64 million Americans live in multi-generational households, including sizable immigrant collectivist populations. Asian and Hispanic populations, many of which are considered collectivist countries, are rapidly increasing in the US. Asians and Hispanics are more likely than whites to live in a multi-generational household, with approximately 29% of Asians and 27% of Hispanics doing so (Cohn & Passel, 2018). This sense of belonging and community from collectivist beliefs, carried over into the United States, include taking care of elderly and 1 putting others’ interests before theirs, such as potentially sacrificing personal health, commitments, or time to help out. Research suggests that collectivists are more likely to care for elderly family members as a means to strengthen family ties whereas individualists are more likely to limit caregiving and use formal social services as a means of support (Pyke & Bengtson, 1996).

This individualist and collectivist mindset can be used to understand how individual and group rights and responsibilities influenced behavior during the pandemic. For example, individual rights include the personal freedom of choosing whether or not to wear a mask and take the vaccine. To further illustrate, an individualist is more likely to say that they don’t want to wear a mask because it’s uncomfortable whereas a collectivist is more likely to agree that discomfort is not a valid excuse for going against group norms. Individual responsibility entails taking care of one’s health, through social distancing and wearing a mask. For instance, an individual wearing a mask for their personal health and not contracting COVID.

Group rights mean that being part of a collective gives access to specific privileges: a right to health care and access to masks and vaccines. Being a member of a group also implies specific behavior expectations. This can include taking the vaccine and following policies such as travel restrictions, quarantine, social distancing, mask mandates, to prevent others from possibly contracting the virus. These important distinctions highlight the different reasons individuals give in mask behavior, with individualists more likely to put themselves before the group and collectivists prioritizing group needs.

Cultural Norms

Even before policies for stopping the spread of the virus were implemented, Taiwan and many other Eastern countries had a norm for wearing surgical masks when experiencing the common cold or similar viruses to protect others and for taking care of the elderly or groups that were at higher risk (Jennings, 2021). So during a pandemic, it seemed normal if not obvious to be wearing masks in public places, on public transportation, and walking around. This mindset and behavior echoes a collectivist mindset present in many Eastern cultures.

For Americans, on the other hand, the preventative measures seemed unusual and unprecedented, since they’ve never experienced a global health crisis to this scale before. Consequently, the pandemic was an anxiety-provoking experience with changes in daily routine, with economic, financial, and health threats, as well as immense uncertainty: lots of unknowns from long-term COVID-19 effects, how to deal with variants, and confusing guidance on preventative measures from government officials and agencies. As a result, the link between behavior and curbing COVID-19 transmission might not have been as straightforward for Americans as it was for the Taiwanese based on different experiences and how the pandemic was handled. Along with the diverse backgrounds of its citizens, the United States found itself divided. As policies such as mask mandates and isolation requirements slowly rolled in, some Americans refused to follow these rules.

Collectivism Predicts Mask-Wearing

It has been well established that masks are an effective way to slow the transmission of COVID-19. Studies have also shown that there is a negative correlation between mask wearing and infection rates. As stated earlier, a USC study reported an approximate 50% mask noncompliance rate in the United States and reports of noncompliance in Taiwan predict an approximate 0.02% noncompliance rate (Key, 2021; Zheng, 2021; Hong, T. & Lǚ, Z., 2021).

Furthermore, studies have also shown that collectivism is positively correlated with mask-wearing. This holds true not only to illustrate the Taiwan vs. United States distinction, but also amongst many individualist and collectivist countries. Countries that scored higher on a reserve-coded scale of Hofstede’s individualism index (represented as a collectivism scale) such as the Philippines, Indonesia, and Thailand, had higher mask compliance rates than individualist countries that scored lower on the scale such as Sweden, The Netherlands, and Finland. These results are after controlling for other factors (e.g., political affiliation and government stringency) (Lu et al., 2021).

This is true not only when comparing the United States to other countries but stays consistent in the United States, with people in more collectivist regions (states and counties) more likely to wear a mask. For instance, states such as New Jersey, California, and Maryland scored higher on the state-level collectivism scale sourced from Vandello and Cohen (1999) and in mask compliance compared to states such as Arizona, Ohio, and Wisconsin, which scored lower on both the state-level collectivism scale and in mask compliance (Lu et al., 2021).

Masks can create physical inconvenience and be uncomfortable. As said earlier, one study found that 64% of Americans that report not wearing a mask responded, “It is my right as an American to not wear a mask” or “It is uncomfortable.” (Vargas & Sanchez, 2020). These actions follow an individualist mindset of protecting personal choice and freedom, but disregard that their actions can affect others (Stewart, 2020). Conversely, collectivists are more willing to put aside their personal inconvenience for the collective welfare and well-being (Biddlestone et al., 2020).

As mentioned previously, there is a $100-500 USD fine for not complying with mask mandates in Taiwan, along with limited reports of noncompliance (Ministry of Health and Welfare, n.d.; Ministry of Health and Welfare, n.d.). In collectivist cultures, the rules are more strict, with hefty consequences for non compliance, because the norm is an expectation to follow the policies implemented. In individualist cultures, on the other hand, the mandates are less strict and more complex and ambiguous because individualists are less likely to comply with rules that sacrifice personal freedom for the well-being and welfare of others. Cultural and personal beliefs can influence how rules are put into place and how people respond.

Additionally, in the US, there is a large divide between democrats and republicans based on their political ideology. Republicans can be seen as more individualist because they value personal freedom and limited government interference in daily personal matters whereas democrats can be seen as more collectivist because they value greater government intervention in economics affairs and a balance between orderly society and liberty. When looking at the difference between mask compliance in democrats and republicans, a striking difference is revealed. Democratically leaning Americans, aligned with collectivist values, have a higher mask-compliance rate than republican leaning counterparts, aligned with more individualist values, have a lower rate of mask compliance (Xu & Cheng, 2020).

To conclude, it is crucial to note that lower mask compliance rates in the United States is not because of Americans being defiant against preventative behaviors, but because of contrasting belief systems and pandemic unpredictability. These findings do not suggest that Americans are associated with various personality traits but instead shed light on the distinct cultural norms affecting behavior.

Psychological Factors

Personal Freedom and Surveillance

Psychological factors, supported by an individualist and collectivist mindset, can also influence mask wearing behavior. The first factor is the idea of personal surveillance. Collectivists are more likely to agree that groups can intrude on an individual’s privacy, especially if it’s for the greater good, since collectivists are more likely to sacrifice their personal freedom for the collective (Bellman et al., 2004). Individualist cultures are more likely to put themselves before the collective to protect their personal freedom, a value that the nation was founded on. This can be seen through the reactions that Americans had towards tracking devices. Before the pandemic, tech companies shared consumer location data with the government to make it easier to track the location of Americans. According to results from a survey in December 2020 conducted on American adults, 42% of the men who responded and 52% of women who responded were very uncomfortable with this (Johnson, 2020). During the pandemic, other companies, such as Google and Apple, used consumer data to track potential exposure to COVID-19. Over 60% of US adults found this COVID-19 exposure tracking tool to be very or somewhat concerning for their privacy (Johnson, 2020).

In South Korea, a collectivist country, government surveillance and tracking has been implemented even before the pandemic. For example, the government has access to credit and bank transaction records to prevent fraud. This system was then repurposed during the pandemic to track where people went, from restaurants to subways. Additionally, because 95% of adults own a smartphone, data location, which was originally used in criminal investigations, is now used for contact tracing. Surveillance footage utilized for investigative purposes and can now provide real time, to the minute, tracking of someone’s location. Koreans can also get sent text messages for outbreak updates. The use of South Korea’s established government surveillance network made it easier to ensure public health safety. Even though there was some talk about privacy concerns, there are limited reports on noncompliance, emphasizing the collectivist tendency to allow personal surveillance for public health purposes (Fendos, 2020).

Risk Attitude

Risk attitude is another psychological factor that affects mask wearing and can be explained through the individualist vs. collectivist mindset. Recent studies show that risk aversion, defined as less likely to engage in risky behaviors, was correlated with compliance to engage in protective behaviors during the pandemic. This was not only true in a pandemic setting but in general, with individuals that have higher levels of risk aversion less likely to smoke or engage in heavy drinking. (Xu & Cheng, 2021).

During a study conducted on Italians, results revealed that emerging adults were more concerned with their relatives and other individuals/community members contracting COVID-19, potentially through them being an asymptomatic carrier, than testing positive for COVID-19 themselves. This collectivist mindset was correlated with a higher perceived risk of infection (Germani et al., 2020). This perceived risk was positively associated with engaging in protective behaviors such as mask wearing and social distancing, a US study found (Duong et al., 2021).

Mask-wearing behavior has similarly been observed and studied in many Asian countries, including Taiwan’s long-standing cultural norm of wearing surgical masks when experiencing symptoms, such as a sore throat and runny nose, as a means to protect others, mentioned earlier (Jennings, 2021).The collectivist mindset and risk perception associated with mask-wearing in different regions can help to support the reasoning behind the Taiwanese mask compliance.

Additionally, as said earlier, amongst the Americans that report not wearing masks, 64% of those Americans said that they didn’t wear a mask because it was uncomfortable or that it’s their right as an American to choose not to wear a mask (Vargas & Sanchez, 2020). An individualist mindset provides reason for these attitudes and behaviors present in some individuals.

Sensitivity Towards Social Norms

The Taiwanese have strong responsiveness to social norms. There is a sense of pressure for wearing masks in subways and public areas. The community will also shame those for non-compliance. For instance, this mentality towards social norms is epitomized in what one Taiwanese said in a CNBC article, “We have this phrase in Taiwan that roughly translates to, ‘This is your country, and it’s up to you to save it’” (Farr, 2020).The government policies also add to this, with hefty fines, up to $500, for non-compliance (Ministry of Health and Welfare, n.d.; Ministry of Health and Welfare, n.d.).

These distinctions can again be supported by an individualist vs. collectivist mindset, in terms of emotional reactions. For example, one study conducted by Matsumoto, Kudoh, Scherer, and Wallbott (1988) found that Americans and Japanese experienced similar emotional reactions but Americans experienced emotions longer, with greater intensity and more bodily symptoms such as verbal reactions, lumps in the throat, breath changes. To conclude the study, more Japanese agreed that acting on these events when coping with these emotional situations was unnecessary, showing a weaker association between emotion and behavior (Scherer, Matsumoto, Wallbot, & Kudoh, 1988). The findings can be expanded out and offer an explanation to how individualists vs. collectivists in the US and Taiwan behaved in mask compliance. The Taiwanese held each other accountable and were less likely to act on their emotions if they didn’t fully agree/want to wear a mask. Americans were more likely to act and go against these mandates, as can be seen through countless protests across many states, even if they had felt similar levels of emotion towards masks as some Taiwanese did.

One of the possible explanations for this is that many of the emotions experienced are ego-focused emotions, meaning they mainly concern the individual’s internal attributes or characteristics. Some examples include anger, frustration, and pride. Therefore, it is logical that individualists are more likely to attend to and act on these emotions than collectivists are, say if they feel their personal freedom is being violated, because these ego-focused emotions are at the heart of an independent self (Markus & Kitayama, 1991). Through the exploration of how psychological factors influenced mask compliance, the prevalence of an individualist vs. collectivist mindset underscores the application to attitudes and behaviors.

Differences in Diversity among Populations

The United States has great diversity with Americans having their own distinct identity, from various demographics, gender, race, ethnicity, and social groups. The United States is rapidly becoming more complex, with data estimates from the US Census Bureau showing that nearly 4 of 10 Americans identify with a race or ethnic group other than white (Frey, 2020; US Census Bureau, 2021). Some Americans then form subgroups with those of similar demographic identities, and base social behavior off of their beliefs and backgrounds.

One way of measuring ethnic diversity is based on an analysis of ethnic fractionalization, the probability that two random individuals from the same country are not from the same group (race, ethnicity, or other criteria). This can be done through Fearon’s analysis in which ethnic fractionalization is on a scale from 0 to 1, with 1 being the most ethnically diverse. When comparing the numbers on Fearon’s analysis, the United States is 0.49 and Taiwan is 0.274 (Alesina et al., 2002; Fisher, 2019).

Diversity is a descriptive factor in the individualist vs. collectivist mindset, with individualism associated with more heterogeneous cultures and collectivism associated with more homogeneous cultures. This diversity in mindset can explain why some states have higher mask compliance rates, as mentioned in the “Collectivism Predicts Mask Wearing” section (Lu et al., 2021).

]From a racial perspective, in a study conducted by USC, the group that was least likely to consistently wear a mask when in close contact with non-household members were whites, with a compliance rate of 46%. Compared to whites, other races including latinos, blacks, and others had higher compliance rates with 63%, 67%, and 65%, respectively (Key, 2021). Diversity in all demographics, from race, locale, and ethnicity, had significant contributions the way individualists and collectivists engaged in mask wearing. This emphasizes the dynamic intricacies of various societies in which no single factor can predict mask wearing.

Conclusion

Culture is an important factor in behavior that has intrigued me as someone who is mixed and spends time with those of various ethnicities, races, and social groups. When the pandemic hit, I spoke to many family and friends that had completely different views on how the virus affected them and what appropriate measures they believed should be taken. At times it was overwhelming and I sought to understand if there was an underlying cultural factor at the root of different attitudes and behaviors. I found that my relatives in Taiwan had one of the most striking contrasts compared to my relatives in the United States in the way they viewed how the government and our societies should be responding.

Since the onset of the pandemic, the infection and mortality rates have been significantly higher in the United States: the US infection rate is about 200 times that of Taiwan and the US mortality rate is about 60 times that of Taiwan (Ritchie et al., 2020). I chose mask wearing as my control factor because it is a universal way to lower the rate of transmission. From talking with my family and friends, I observed that mask-wearing was one of the most heavily debated topics.

The mask compliance rates are significantly higher in Taiwan than in the United States. Through my literature search, I found multiple demographic, cultural, and psychological factors, influenced by an individualist vs. collectivist mindset, that predicted mask wearing. Taiwan’s proximal distance to SARS in 2003 resulted in public health regulations that gave public health agencies access to patient medical and travel records for contact tracing and testing. Along with this, Eastern countries have norms for wearing masks to protect others. Race, locale, and political ideology was associated with mask wearing. Psychological factors involving higher risk attitude, sensitivity to social norms, and personal surveillance compliance were affected by a collectivist mindset. As a caveat, individualism tends to be correlated with Western countries but there is still a large percentage of Americans that do not associate with an individualist mindset. This results in greater diversity within the United States and Americans having differing views of cultural beliefs. Further, Taiwan’s cultural norms and policy preparedness proved to be significant in Taiwanese compliance with preventative measures.

At the heart of a collectivist is having compassion and taking in another perspective by wearing a mask to protect others. On the other hand, a reason individualists are not complying with mask mandates is not because of pure defiance but because they have a different belief system. For instance, for some individualists, it may be harder to conceptualize that they’re part of a collective and that their individual behavior is affecting the group.

These findings are important because it provides insights into how people react to governmental health regulations during times of uncertainty. Neither individualists nor collectivists are “better” than the other. There are specific attributes of each that may better serve during specific circumstances, such as a global health crisis, but I am not stereotyping individualists or collectivists with specific personality traits. I am not here to convince anyone to change their belief system but in global health crises it may be useful to adopt more collectivist actions while also taking steps to protect themselves. This can be achieved without taking away key components of identity and protecting personal values. One big question is how can we get people to comply without making them change their belief systems?

This paper explores the reasons behind noncompliance, so we can get insight into how to frame compliance requests for individualists and collectivists in different manners with the goal of showing that mask-wearing benefits the health of the public. For collectivists, explaining how mask-wearing benefits the group. Ironically, individualists that are not complying with mask mandates are presenting potential health risks to themselves and the group; these individuals are more likely valuing personal freedom over health. When framing compliance requests for individualists, it may help to emphasize that wearing masks acts in their own interests as well as establish the link between individual behavior and group health. These changes in reframing requests appeal to the individualist and collectivist belief systems while respecting personal values.

It is also important to note that extreme collectivism and extreme individualism can also harm self-interest. To further illustrate, extreme collectivism is primarily not taking into account individual needs and extreme individualism is solely focused on personal desires. Neither of these extremes act in one’s best interest because it fails to take into account other perspectives and people.

To conclude, in everyday experiences, it’s good to find some common ground. That way different perspectives can be acknowledged to create a more informed and dynamic view of the world. Sometimes it’s better to be an individual, sometimes it’s better to be a collectivist. In general, it’s hard to change belief systems to adopt other views but being able to empathize and understand why people are the way they are is beneficial not only in a pandemic, but in daily life.

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About the author

Alena Powell

Alena is a senior at Avenues: The World School in NYC. She is passionate about the social sciences, public policy, and global/cultural studies. Her academic interests are interdisciplinary and experiential as she hopes to continue immersion in different cultures, learning about various economic and government systems, and explore pathways to apply her knowledge through social impact.

The post Why Mask Compliance Differed in the United States and Taiwan During the COVID-19 Pandemic: How Individualist vs. Collectivist Cultures Respond in Uncertain Times appeared first on Exploratio Journal.

Abstract

Chinese herbal medicine (CHM) has been used in ancient China for over 2500 years, with its prevalence continuing to grow ever since. In recent years, traditional Chinese medicine (TCM) methods such as acupuncture, tai chi, and herbal medications have gained a global presence. However, its basis has not been proven scientifically, and anecdotes or observations of successful treatments have led to the foundations of CHM. Thus, believers of CHM and TCM practitioners have not encouraged the publication of many clinical studies on the efficacy and safety of herbal medications. Some experimental studies have led to promising results, but more research needs to take place to confirm such effects and any adverse effects medications may bring. The purpose of this paper is to examine the basis and research behind CHM as well as the risks of ingesting CHM.

Introduction

Rooted in Chinese culture, TCM has become a staple for the holistic treatment of illnesses. Although China’s healthcare system has embraced western medicine (WM) for the treatment of some illnesses in recent years, the prevalence of TCM is nonetheless prevalent across the nation’s citizens. According to the China Health Statistics Yearbook 2018, there were a total of 2,641 million visits to TCM practitioners, making up 32.3% of all clinical visits in 2017 (Liu et al.).

Many patients with chronic illnesses look to natural treatments such as TCM after WM has been unsuccessful. Moreover, when illnesses can only be treated with symptom relievers such as the common cold, TCM has been able to fill a gap by claiming to address the root cause (Marshall, 2020). With a growing number of patients utilizing TCM and success stories beginning to rise, it has begun to gain worldwide acceptance, with the World Health Organization adding a chapter regarding TCM in the International Classification of Diseases (Nature, 2019).
Essential components of TCM such as acupuncture and Tai Chi are deemed by the National Institutes of Health to be relatively safe due to their non-invasiveness (Hopp & Shurtleff, 2019).

Although these practices are often scrutinized due to their lack of scientific basis, there are generally fewer risks in participating in acupuncture or Tai Chi than ingesting CHM. However, the effects of acupuncture or Tai Chi are often credited to placebo effects due to their lack of scientific explanations. CHM seems to be the main concern, due to its lack of research into its adverse effects and long-term use by patients of all ages (Liang et al., 2018). The concern behind CHM is attributed to its extensive usage, especially in children and older adults, as well as the lack of randomized clinical trials required to validate claims of efficacy or safety.

Basis Behind Chinese Medicine

TCM is a medical system based on the Chinese belief of balance, where the equilibrium between Yin and Yang can ensure the health of a person (National Cancer Institute). Yin and Yang represent opposite elements that coexist to create a steady cycle between all entities. If an entity has an imbalance, it is deemed as unhealthy and may require a method of TCM to resolve the imbalance. Furthermore, the Chinese believe that among the balance exists ‘Qi,’ a vital source of energy that circulates the body. Based on this belief, traditional Chinese practices focus on the circulation of Qi and restoring the flow of Qi within the body by working to clear the path of the Meridians, channels that Qi flows through. This is a practice that has been passed down in Chinese society for thousands of years. The creation of Chinese herbal medicine is often attributed to Emperor Shen Nong, who sampled more than 100 herbs where he later introduced them to his subjects (Ergil et al., 2002). Illnesses and diseases are caused by disturbances in the balance of Yin and Yang and the flow of Qi within one’s body. Thus, TCM practitioners aim to reinstate the natural balance and flow in order to heal a patient. CHM supporters claim herbal remedies utilize a slow healing method that can eliminate the root of a problem and achieve a balance between one’s emotional, physical, and spiritual health.

In contrast to the western approach on fast responding medication that can suppress symptoms as well as a standard methodology to treat diseases and symptoms, CHM judges a patient as a whole and utilizes the syndrome differentiation theory. This theory analyzes the harmonic pattern inside a patient’s body based on the core beliefs of Qi to make a diagnosis of the illness (Jiang et al., 2012). As such, most CHM has not been clinically tested due to their belief that isolating a symptom and targeting it is an incorrect way of treating a patient which would only temporarily fix the problem.

Although the beliefs surrounding the Chinese medical system have been utilized for over 2500 years, it is important to note that all aforementioned beliefs are not defended by clinical research or trials and cannot be deemed reliable.

Dosage and Usage of TCM

In China, the Chinese Pharmacopoeia outlines stipulated dosages of CHM as a guideline for Chinese practitioners. However, a 2014 study found that practitioners often overlook the guidelines and prescribed quantities far greater than stipulated dosages. The study concluded that guidelines in the Chinese Pharmacopoeia are not comprehensive enough for clinical usage to match with stipulated dosages (Ni et al., 2014).

The majority of CHM is often primarily based on the experience of the TCM practitioner due to unspecified guidelines in the pharmacopoeia. Furthermore, there is no dosage guideline for pediatric patients, nor patients who are overweight (Marshall, 2020). This may lead to overdosing or underdosing of the medication. In contrast to WM which is set on a predetermined dosage, including medications used by children, there are no dosage guidelines for the pediatric use of CHM. Practitioners may use either their own clinical experience or the estimated body weight and age of the patient.

Among TCM practitioner visits, respiratory illnesses and symptoms were the most common reason for treatment. Respiratory symptoms are especially common in children. In a study based in Taiwan, 63.2% of children were found to have been treated with CHM at least once (Liang et al., 2018). However, due to the lack of dosage guidelines for pediatric patients, the usage of CHM may pose dangers.

Development and Research behind Medications

Chinese herbal medicine has been in clinical application for thousands of years and has also been under continuous and extensive research in hope of developing new formulas. As previously stated, the discovery of CHM is attributed to the Chinese belief in Qi as the vital life force, as well as the balance between Yin and Yang; however, while that may be true, Chinese herbal medicine is a collection of theories that have been altered based on years of experiments, observations, and anecdotes. According to Doctor Chen-Pien Li, herbal medicine was slowly developed by ancient scholars and governmental institutions, creating remedies and formulas that have since been passed down (Li, 1974). However, questions regarding its scientific basis and reliability have continued to grow with the development of modern science. In fact, many claim that certain CHM can be harmful to the human body.

However, it should be noted that some CHM has been the foundation of some WM. For instance, the calming effects of chamomile tea can be attributed to discoveries by Chinese herbal medicine in the Tang Dynasty. It was said to act as a healing coolant against the fire and heat within one’s body in the Ming Dynasty (Yang et al., 2014). Researchers are now conducting studies with regards to the concepts of TCM to see if tea plants can act as preventive medication. Furthermore, many current researchers aim to further develop CHM. Professor Si-Yuan Pan of the University of Beijing stated that researchers have been exploring ancient remedies and modernizing them. Studies now aim to modernize the method of consumption as well as some formulas (Pan et al., 2011). Researchers have been attempting to alter the method of consumption partly by extracting key ingredients from herbs and increasing the concentration, which then enables the possibility of forming it into granule pills.

Nevertheless, the modernization of formulas is essential. Some risks regarding the ingredients used in CHM have been identified by Chinese scholars, which are now under research and analysis. According to Dr. Gao RanRan of the Institute of Medicinal Plant Development, many scholars have been undergoing research involving the careful inspection of the quality and safety of the products (Gao et al., 2019). Therefore it is important to acknowledge that although TCM is one of the oldest forms of medical practice that still exists today, the medicine was slowly acquired through a collection of experiences. Since not all herbal medicines have been carefully and thoroughly inspected, patients should be cautious and always refer to a physician before ingesting CHM.

Adverse Effects of Chinese Herbal Medication

The lack of clinical trials and sufficient research into adverse effects in TCM has called its use in question. Natural remedies such as TCM often advertise as side-effect free and fail to record complications such medication can result in. Users of TCM may be unaware of adverse effects and may be unaware of complications from TCM. There are currently few regulations regarding herbal medications and the lack of strict oversight of TCM can lead to overlooked ill-effects (Chua et al., 2015). Thus, complications and contributions to illness or death from TCM are unable to be determined. Although few clinical studies have been conducted in China, other countries have begun to research adverse effects some herbs and traditional medication can result. For example, an Australian journal noted that because the contents and preparation methodology of herbal medications is not tightly controlled, products may contain illegal or harmful ingredients (Byard et al., 2017). Concentrations and ingredients may also be labeled incorrectly, which could lead to users ingesting the incorrect dosage.

According to the National Center for Complementary and Integrative Health, there have been documented cases of TCM containing traces of unapproved animal or plant products. Furthermore, some herbal medications contain drugs such as arsenic, lead, and pesticides. Combined, such ingredients can result in serious injury or death, especially in younger children (Hopp & Shurtleff, 2019).

Another possible complication is the possibility of drug interactions when treatment is utilized by both WM and TCM. When WM is used as a primary drug and TCM is added as a supplement, herbal medications may potentiate or antagonize the properties of WM, resulting in under absorption and possible ineffectiveness of WM. For example, one known interaction is between Danshen and Warfarin (used for blood-thinning properties). A case report found that the interaction between Danshen and Warfarin resulted in significant anticoagulation in patients (Chua et al., 2015). Danshen has also been reported to increase the concentration of warfarin by inhibiting hydroxylation. However, sufficient clinical research has not been conducted between the two medications, and patients are encouraged to avoid Danshen while taking Warfarin.

Conclusion

Although a handful of research studies have already been conducted on CHM and TCM, more clinical studies are needed in order to confirm the safety and efficacy of many herbs and treatments. While some research has shown that TCM does correlate to modern science, other studies have shown adverse effects instead. Therefore, it would be critical for the public to be educated on the risks and to be cautious of the consumption of CHM, especially for younger children and older adults.

Furthermore, the increased consumption of TCM worldwide should encourage further extensive research on treatments that address the complications and possible interferences of taking both TCM and WC. Steps should also be taken by both western and traditional Chinese physicians to inform the patients of the risks of a combination of WM and TCM.

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About the author

Nicole Zhou, Tsu-Yi Zoe Lee

Nicole and Zoe are aspiring physicians with interests in subjects regarding Biology, Chemistry, and Health Studies.

The post An evaluation of the methods and research surrounding the usage of Chinese Herbal Medicine appeared first on Exploratio Journal.

This paper explores labor unrest in China. The analysis examines the country’s rapid rise in global manufacturing and its implications for workers, along with its harmful ramifications and possible resolutions.

Industrialization & Labor Market

The Industrial Revolution of the late 18th century witnessed the decline of feudalism and gave rise to industrial capitalism in western countries. At the time, coal, an essentially unlimited energy source, substituted for the inherently limited source of wood. Subsequently, the application of this new energy source to steam-powered machinery fostered the factory system (Bannister 2016), in which the means of production, raw materials, powerful machines and factories, became concentrated in a group of select individuals. These profit-driven capitalists controlled capital, built factories, and employed a massive workforce. As Marx and Engels wrote in the Communist Manifesto in 1848, capitalism “has created more massive and more colossal productive forces than have all preceding generations together.” (Frieden 2013)

Before the Industrial Revolution, workers entailed craft skills to produce goods that were consumed domestically and locally. Agricultural activity remained the main domain of work. However, as the Industrial Revolution spread, workers increasingly crowded into cities where factories, transportation, and infrastructure were located. Workers began to work fixed-hours under rigid conditions that were set by factory owners. Meanwhile, because of technology change, the mass production of goods first became possible in the early nineteenth century. The manufacturing process was broken down into segments. Workers followed routinized instructions and were required to repeat one specific task as a part of the whole manufacturing process. This is known as the division of labor. Adam Smith, who witnessed the beginning of the Industrial revolution, noted that the increasing division of labor must inevitably be associated with a simplification of the tasks to be performed by each individual worker (Brugger 2018). Skilled artisans, who manually crafted items, became displaced by the streamlined production process in factories. Moreover, with the spread of Taylorism and Fordism later on in the twentieth century, owners maximized output with forms of mass production like assembly lines.

While several European countries succeeded in following the path of England’s Industrial Revolution, China, on the other hand, didn’t industrialize until 150 years later. There are various explanations for why the Industrial Revolution failed to occur in China at that time. As Wen-yuan Qian and others argue, it was China’s imperial and ideological unification that prohibited the growth of modern science and impeded the country’s industrialization process (Lin 1995). Nevertheless, in the past few decades, China has experienced fast industrialization;  in 2012, China accounted for 19.8% of the entire world‘s manufacturing output (Li 2014).

Workers in China

1. Economic development & labor force

China’s labor market is one of the most important factors contributing to its fast growing economy in recent decades. From 2000 to 2005, manufacturing accounted for 32% of China’s GDP and 89% of its merchandise exports (Robertson 2008). The share of the population employed in the secondary industry to the total population also increased from 7% to 30% between 1952 and 2012 (National Bureau of Statistics, 2013). Foreign factories favor China for the abundance of cheap labor it offers. Even as the working population has shrunk in recent years and as many international companies turn to other countries in Southern Asia, China maintains the largest manufacturing labor market in the world.

  2. Migrant Workers

a. Definition

         A key component of the Chinese labour force is rural-urban migrant workers, accounting for 72 percent of China’s urban workforce (347 million) (Lee 2016). Migrant labor’s contribution to the GDP was estimated at about 30% and 31% of GDP of Beijing and Shanghai in 2007 (Caijing, 2009a). While “migrant workers” in the U.S. usually refers to workers who immigrate from other parts of the world, in China, migrant workers refers to people who left their original, rural homeland in China to seek work within Chinese cities. In 1958, the hukou (household registration) system, divided into agricultural (rural) hukou and non-agricultural( urban) hukou, was adopted to control rural-urban migration and labor mobility. For people holding rural hukou, they are considered rural residents entitled only to social benefits provided by their places of origin even if they live and work in urban cities. Chinese migrant workers, who hold rural hukou but work in urban China, are thus not considered urban residents. Thus, for migrant workers, they cannot access social welfare in their working places, such as education, healthcare and pensions, which are only eligible to local urban hukou holders. Moreover, most migrant workers are incapable to meet the requirements to change a rural hukou to an urban one. Migrant workers often suffer from social exclusion in big cities. They are mostly staffed in manufacturing sector and other low-end services that urban residents rejected. A 2004 national survey indicated that migrants accounted for 68% of the manufacturing sector’s workforce (Wei 2006).

b. First & Second generation migrant workers

         The distinction between the old and new generation of migrant workers is vague, usually workers born after 1980s are considered the new generation. According to a national survey from 2013, the total number of new generation migrants has exceeded 100 million, which is about 60 % of the total rural migrants in China. The Second generation migrants are usually depicted in literatures as having better education, more connected to urban life, and more actively engaged in defending their rights compared with first generation migrants. Comparisons between the social integration of first and second generation migrant workers have constantly received wide research attention. The comparisons become important indicators of improvements in migrant workers’ living and working conditions.

c. Dispatched Workers

         China’s Labor Contract Law in 2008 demands companies to provide labor contracts only to direct employed workers. As a result, companies see “dispatch workers” that are paid and employed by subcontracting agencies a way to cut cost. Dispatched workers tend to receive less pay compared with their directly employed counterparts and endure partial or delayed payment of wage as most subcontracting agencies are not supervised under strict regulation. In 2014, an International Labour Organization study revealed that against rising costs in a slowing economy, there was systemic usage of subcontracted labor in the Chinese manufacturing, construction, and services sectors (Liu 2014). By 2011, there were 37 million dispatched employees, accounting for 13 percent of total employees in China. And a little over half (52%) of the sampled dispatch workers were rural migrants(Chan 2019).

d. Student Intern

         Students at technical schools are required to do internship at factories in order to get a graduate diploma. Since students normally lack leverage and legal channel to secure their rights, factories and schools together exploit the cheap labor of students. 

Chinese worker empowerment

1. Mistreatment of Migrant Workers

Rural migrant workers are the equivalent of cheap migrant labour in Lewis’s (1954) model of unlimited surplus labour supply. Their ‘temporary’ legal status and permanent ineligibility for local citizenship make them vulnerable to mistreatment and easily expendable (Chan 2010). Many migrants suffered inferior working conditions including long hours in dirty, noisy workshops and frequent wage delay and defaulting (Chen 2009). Workers sometimes even desire overtime working because their basic wage is too low to meet local living standards. The Chinese Household Income Project Survey of 2002 show that over 80% of migrants worked seven days per week, and only 7% workers’ working time was in accordance with what law regulated (Shi 2008). Migrant workers make up 80% of the deaths in mining, construction, and chemical factories. And about 90% of those suffering from work-related diseases are migrant workers (Zheng 2005). The 2002 CHIPS data also indicates that only 5 per cent of migrant workers were covered by a pension scheme, less than 2 per cent by unemployment insurance, 3 per cent by medical insurance and that less than 10 per cent were living in public housing (Shi 2008). In Hengyang Foxconn, survey showed student interns are required to work 10 hours a day, six days a week. For interns who refuse to work overtime and night shifts, teachers threaten them with graduate diploma and carried out physical violence. These teachers were in turn provided a 3000 RMB ($425) “subsidy” from the factory (China Labour Watch 2019). At the same time, in one documented case concerning a dispatch worker in the steel industry, the dispatch worker’s claim for “equal work equal pay” was rejected as the court’s verdict read: “…Equal work refers not just to the same kind of work, but also to equal labor ability, skill, and equal results and so on. Those issues are not within the capacity of the court to determine.” (Chan 2019).

2. Labor Unrest in China

Labor unrests in China are mostly localized and usually characterized as “defensive”. Workers demand most often for immediate wage rise. A research analysis of 308 strike cases verdict indicates that from 2008 to 2014 more than a half of strikes argues for a rise in salary. Yet, cases of strikes in China are scattered among pieces of news report without any official data collection. China Labour Bulletin 2011 estimated that roughly 30,000 strikes and protests by workers occurred in 2009 alone (Elfstrom 2014). A recent peak in labor unrest was in 2010, when labor disputes and strikes concentratedly took place. Among the incidents are the well-known cases of employee suicides at Taiwan-owned enterprise Foxconn and a series of strikes in Honda. After hundreds of workers walked off the job at a Honda plant for two weeks, Honda was forced to increase workers’ pay by up to 32 percent. Similarly, Foxconn announced a 70 percent pay rise after worker suicides raised questions about working conditions at the factory (Ward 2010). In addition, during the “summer strike wave” in 2010, the Shanghai- and Suzhou-centred Yangtze River Delta, the Pearl River Delta and the Dalian-centred Liaoning region all experienced interest-based strike actions that called for the increase of wages and benefits (Chang 2015).The database of the Supreme People’s Court shows a marked increase in lawsuits over “dispatch work” in basic-level courts: from 59 cases in 2012 to 1255 cases in 2014 (Chan 2019).

  3. Literary Works & Chinese Worker Empowerment

a. Positive Attitude

Optimistic attitudes about worker’s empowerment persist in works analyzing the new-generation migrant workers. C. Cindy Fan and Chen Chen (2013) wrote that new-generation tend to pursue migrant work not only for economic return but also self-improvement and urban experience. They are less tolerant of low pay and poor working conditions and are more ready to express their frustration, including resorting to protest and even suicides (Fan 2013). Elfstrom (2014) also affirmed that due to labor shortage and media openness, workers are gaining more leverage and are becoming more assertive in their demands arguing for higher wages, better working conditions and more respect in their working environment. Data from the research supported the claim by suggesting a steadily increasing trend in strikes, from 3.6 actions per month in 2008 to 32.1 actions per month in 2012. Cheng (2014) noted that with the suicides at Foxconn, the new-generation migrants demonstrated strong will when they held strikes, undertook collective bargaining, and achieved impressive outcomes. Cheng pointed out that the strategies used in the Honda strike in 2010 and 2011 were unprevailing among the first-generation migrants.

b. Pessimistic Attitude

         Nevertheless, Ching Kwan Lee (2016) reveals that the soaring cost of living in bigger cities already outweighs the minor increase in salaries and that the second generation consumes more but earns less – their demands also fail to go beyond rising wages. Discussing strikes, Ching Kwan Lee  acknowledges that once set in a longer time period, the amount of strikes is actually decreasing and the corporations are more able to respond to strikes by firing the organizers or by “reinstating its own management staff” as head of labor unions. He and Wang(2016) indicated that urban lives of the new generation suffer from the same level of precarity as their predecessors, sometimes even worse because the rigid hukou system and fiercer competition among migrant workers. Friedman and Lee (2010) argued that Chinese strikes are largely localized, with workers demanding for change only specific to their factories. “Strikes are fundamentally cellular in the sense that the cells are not combining to form tissues.’’ Even if workers successfully had a wage rise, it is still unlikely that a durable system of adequate workplace representation will be created. 

Moreover, Li (2014) suggested that older migrants showed better mental health status than younger migrants. According to Leng (2020) the new-generation migrants have a significant weaker sense of rural identity than first-generation migrants, while they show no significant stronger sense of urban identity. Instead of integrating better into the urban society, their social identity is in fact “stalled”.

Ethnicity & Labor

1. Ethnic minority groups in China

Ethnicity discrimination seems a minor issue in China, where people rarely stand out in the crowd because of skin color or ethnic dress code. With efforts of homogenization of ethnic minorities made by the Chinese government, ethnic identity of individuals is gradually ignored and we intuitively categorize Chinese people we meet as people of the Han ethnic group. As a result, minority groups in China become increasingly marginalized as their needs and demands are disregarded. The Han ethnic group makes up 92 per cent of the 1.2 billion population, while minority groups which include Tibetans, Mongolians, Uighurs, Koreans and Tujia make up around 109 million people (2001). The Uigur, Kazakh and Kirgiz nationalities, who concentrated in the region of Xinjiang, speak Turkic languages and regard Chinese as a foreign language. Furthermore, their Muslim traditions bear little resemblance to the Han cultural traditions. Tibetans, at least half of whom live in the Tibet Autonomous Region display a high degree of cultural homogeneity which is religious-based, Tibetan Buddhism, and also linguistic: fewer than one in three Tibetans can write Chinese (Isabelle 2000).

The fact is that ethnicity conflict continues to be a persistent issue in China.In the manufacturing and textile city of Ningbo ethnic minorities are sometimes blamed in the media for rising crime rates, perpetuating inter-ethnic tensions and negative stereotypes (Tyson 2018). In an ethnic riot in 2009, at least 150 people have been killed and thousands more have been injured or arrested in Urumqi, Xinjiang (Lipscomb 2016). Researchers recorded 213 ethnic violent events between 1990 and 2005 in the Ethnic Violence in China database (Cao 2018). News reporting abuses and conflicts in ethnic minorities are filtered before reaching the public. Chinese government feel compelled to minimize the impact of ethnicity tensions in an attempt to maintain national stability. At a UN Committee on the Elimination of Racial Discrimination hearing to consider a Chinese government report on minority rights recently, China was accused of having a superiority mentality, especially in its reference to Tibetans and other minorities as “backward” (The Irish Times 2001). 

2. Exploitation of labor force of minority groups

In Xinjiang and Tibet regions, government has been taking radical measures to repress minority groups with the excuse of combating extremists. News reports on the subject was rarely heard of, never making their way up to Chinese online platforms. Nonetheless, as the Australian Strategic Policy Institute estimates, between 2017 and 2019, more than 80,000 Uighurs were transferred out of the far western Xinjiang autonomous region to work in factories across China through schemes under central government policy known as Xinjiang Aid. At the factories, the Uighurs were forced to have Mandarin lessons and “ideological training” outside of working hours, subjected to constant surveillance and banned from observing religious practices. Furthermore, it was “extremely difficult” for Uighurs to refuse or escape the work assignments with the threat of “arbitrary detention” (BBC News 2020) Villagers from Muslim minorities, targeting mostly Uighurs and Kazakhsare, were compelled to work with order from Chinese officials. The labor bureau of Qapqal ordered that villagers should undergo military-style training to convert them into obedient workers, loyal to employers and the ruling Communist Party. Under pressure from the authorities, poor farmers, small traders and idle villagers of working age attend training and indoctrination courses for weeks or months, and are then assigned to stitch clothes, make shoes, sweep streets or fill other jobs. The government maintains that the Uighur and Kazakh villagers are an underemployed population that threatens social stability. “Turn around their ingrained lazy, lax, slow, sloppy, freewheeling, individualistic ways so they obey company rules,” the directive said (Buckley 2019). Such acts of coercion towards ethnic minorities in China again poses heavy suspicion whether Chinese laborers are actually enjoying the rights they are entitled to.

Chinese Governmental Infringement

Labor unions, a common tool workers turn to when defending their rights in workplace, operate differently in China than that in western countries. After the massive worker protest at Tiananme in 1989 that caused heavy injuries and multiple deaths, independent labor unions were prohibited in China. The All China Federation of Trade Unions (ACFTU) became the only labor union admitted by the government, which can establish its branches at local levels. Chinese labor unions are highly integrated with political institutions. ACFTU, in its essence, is an organ of Chinese Communist Party. The main objective of the organization is thus to help ensure central government policies are carried out swiftly instead of answering petitions of grassroots labor. In 2006, ACFTU Chairman Zhao Wangguo affirmed, “All trade union organizations must consciously accept the leadership of the Party, resolutely implement the Party’s line and directives and also comply with all decisions and plans adopted by the Party Central Committee.” (Bai 2011) As China fosters rapid economic development in recent years, the trade union sides more often with capital than with labor. 

One recent attempt the Chinese government made to ensure fair employment for migrant workers is the Labor Contract Law in 2008. The law clarifies regulations related to the content of labor contracts and imposes penalties for companies failing to provide written contracts to employees (Bai 2011). It also aims at improving processes of labor grievances through mediation, arbitration, and litigation in order to avert collective actions of labor protests(Remington 2015). The 2008 law is no doubt a milestone for labor rights in China. However, enforcement of the law is still largely overlooked at local levels. While the central government focuses on reinforcing its authoritarian role, it is the local government that in reality enforces specific terms and laws. As Lee (2008) stated, local government aims at the “accumulation of revenue and resources rather than legal reform”. Local government usually aligns with large corporations, but stands opposite from the exploited workers. As a result, workers right are not strictly protected and judicial cases at local levels are loosely tried. Chinese and International NGOs become workers’ main support for their power of leverage, taking labor right cases over for civic and obligation causes.

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About the author

Xiaolin (Cathy) Lu

Cathy is a junior at the Shanghai Foreign Language School Affiliated to SISU

The post Labor Unrest in China appeared first on Exploratio Journal.

Abstract

The COVID-19 epidemic has been spreading at a speed which is 1,000 times faster than SARS, covering the world. Since the first infection of the COVID-19 was confirmed in China on December 31 of 2019, the total number of global cases has exceeded 1 million as of early April 2020 and surpassed 4 million a month later. 

To prevent the spread of COVID-19, most nations implemented lockdown measures including border closings, movement restrictions, stay at home orders, closing schools, and business restrictions and prohibitions. This has led to unprecedented social and economic impact on the global community. 

As a neighboring country of China, South Korea has experienced the spread of COVID-19 in  a particularly intense way and earlier than most other countries, reached a peak from February to April. However, Korea has contained COVID-19 effectively without a lockdown and movement restriction measures, maintaining the normal life pattern and business operation, which was backed by taking active steps including massive testing on a large scale, public disclosure of the relevant information, and social distancing campaign. These efforts consequently have made South Korea evaluated as a successful case in response to COVID-19.

South Korea is particularly sensitive to severe economic blows, since it has a high dependency on exports and is deeply engaged in the global supply chain. Due to factory closings and lockdown measures in many trading nations, the production and supply of goods has been hit severely, while the sales of corporations have been drastically diminished due to movement restrictions and reducing purchasing powers caused by sharp rise of unemployment in the global markets. South Korean economy suffering was from both supply and demand

Besides, since South Korea has a very high percentage of self-employed business among the OECD member nations, the economic impact resulting from collapsing self-employed business had an enormous negative influence on the overall economy of Korean society. The lack of resilience or self sufficiency among self-employed businesses in South Korea caused this phenomenon, whose economy in scale is relatively lower than other OECD nations.  

Based on these structural characteristics of South Korean economy, the research is to look into the impact given to the overall Korean economy-mainly manufacturing, aviation business as key industry, self-employed business, and start-ups from February to April when COVID-19 hit Korea the hardest, and contemplate the direction which the South Korean government and enterprises should move toward to tide over the difficulties of the post-COVID-19 era.

Introduction

As the coronavirus (hereinafter called as “COVID-19”) has been spreading at a speed, 1,000 times faster than SARS to cover all over the world including Europe & US within only two months after the outbreak in China, the WHO finally came to declare COVID-19 a pandemic. As of April 30, the total number of the infected patients confirmed reached to more than 3,000,000. It took only 4 months to infect 1 million people all over the world after its first outbreak in China. 

A total of 151 countries and territories have imposed bans on people coming from South Korea, which has had a significant impact to the South Korean Economy. Since the first patient of the COVID-19 was confirmed on January 20th 2020, South Korea’s total infections turned out around 10,700 as of April 30, which was the 35^th rank, following US, Spain, Italy, France, Germany, UK, Turkey, Iran, Russia, China, Brazil, Canada, Belgium, Netherlands, India, Switzerland, Peru, Portugal, Ecuador, Ireland, Sweden, Saudi Arabia, Israel, Austria, Mexico, Singapore, Pakistan, Chile, Japan, Poland, Romania, Belarus, Qatar, and UAE. To prevent the spread of the COVID-19, most nations implemented lockdown measures including border closings, movement restrictions, stay at home orders, closing the school, and business restriction and prohibitions, which has eventually given unprecedented social and economic impacts to the global community. 

All prominent political and economic leaders have characterized the current economic crisis by COVID-19 with one voice as follows:

• It’s not limited to a regional crisis but has developed to be a worldwide crisis. 

• It brings significant challenges to both the real economy and financial economy.

• It is expected that the usual monetary and fiscal measures have a limited effect on economic recovery.

 • Putting an end to this pandemic quickly is the key to getting back to normal. 

UNCTAD estimated that the shock of COVID-19 might trigger a recession in some countries and a deceleration of global annual growth to below 2.5 per cent – often taken as the recessionary threshold of the global economy, while OECD projected global growth could fall to 1.5% in 2020, almost half the 2.9% rate it had forecasted before the outbreak.

It’s somewhat undeniable the world is on the brink of the deep global recession, which has never been experienced. In this regard, Morgan Stanley lowered its first-quarter US GDP forecast to -3.4% from -2.4% and its second-quarter US GDP forecast to -38% from -30%. 

Fitch, the credit rating agency, expected world economic activity to decline by 1.9%, eurozone GDP to fall by 4.2% and the U.K.’s GDP to decline 3.9% this year. It is viewed that the South Korean economy heavily depends on trade due to the small domestic market. According to OECD data, Korea’s dependency on exports was 41.6% of GDP in 2019, which was the second highest dependency ratio followed by 46.9% of Germany among G20 countries. Such a heavy dependency on overseas markets tends to make the national economy more easily exposed to risk, whenever overseas markets have any economic turbulence. 

Especially, leading industries of the South Korean economy such as automobile and electronics have exquisite global supply chains from China as well as other countries. As the Korean economy has intricately connected with other global partners, the current epidemic issue greatly imposed impact on Korean markets. 

Another feature of the South Korean economy is the high ratio of self-employed business like restaurant, cafe and grocery, which is 25.1%. It’s much higher than other OECD member countries. Since movement restrictions and fear of infection at places like restaurant, café, and small shops make people stop visiting them to buy goods,  it is assumed that the current situation is causing fatal damage to these self-employed business owners.

Additionally, the South Korean government has adopted a fiscal policy of increasing spending on social welfare since 2018, which inevitably increased the burden on government expenditure. Furthermore, the current economic crisis struck by the outbreak of COVID-19 is bringing up additional public expenditure on a large scale to prevent the national economy from plunging, which would give a negative impact on the South Korean government’s financial soundness. The Korean government’s budget was 475 trillion won (US$387 billion) in 2019, and is projected to be dramatically increased up to around 560 trillion won(US$456 billion) in 2020 with revised supplementary budget on several occasions due to COVID-19. 

Therefore, this research will review the impact and damage on the South Korean economy by COVID-19 during the last three months, from February to April, in relative economic sectors. It will also provide a base to consider the risk by a pandemic as a critical variable, which is expected to occur more frequently in the future, especially in planning the company strategy as well as adopting the measures for national finance soundness.

1. The growth of Korean economy wrecked by COVID-19

Comparing this crisis with the previous economic crisis that South Korea has experienced, the current situation has quite different and much more serious characteristics. The Asian Financial Crisis in 1998 was limited to a few Asian nations, and in South Korea the economy recovered quite fast, helped by a jump in exports; while the financial crisis in 2008 South Korea was relatively unaffected. When Severe Acute Respiratory Syndrome (SARS) occurred in 2003 and the Middle East Respiratory Syndrome (MERS) did in 2015, those diseases spread into South Korea and resulted in local market slowdown and temporary stagnation of the domestic economy. But in both cases, the economic impacts remained relatively short. Such a ‘V-shaped’ economic recovery, which has been shown in past contagious disease cases, won’t be easily applied this time.

The economic crisis struck by COVID-19, in which the financial and real economy is collapsing simultaneously, has led to a deeper and more serious crisis. Korea will suffer both a supply and a demand crisis. As the lockdown in overseas markets including US and Europe is resulting in the sharp rise of unemployment, it naturally leads to a reduction in the purchasing power; accordingly the demand is radically decreasing all over the world, which  badly impacts South Korean exports. 

Experts such as the IMF and EIU (Economist Intelligence Unit), view the global economy as having stepped into a recession already. If the vicious circle-“breakdown of supply chains and diminishing consumption ⇒ decrease in sales ⇒ bankruptcy of company ⇒ restructuring ⇒ job loss ⇒ decline of demand and consumption”-occurs, global consumption declines could develop into longer structural problems from temporary phenomenon. Furthermore, economic activities in both US & EU occupying 50% of the world consumption has been paralyzed, which leads to a drastic shrinkage of demand in the global market. 

The real economy is usually based on traffic and transaction, which was destroyed by the fear of COVID-19 infection in a short time. The South Korea Customs Service announced total exports from April 1 to April 20 amounted to US$21.7 billion, which is a 26.9% reduction from the same period of last year. The daily average export ended up at US$1.5 billion, which is 16.8% reduction from the same period of last year.

COVID-19 first hit China, Korea, Japan and then went over to the US and Europe. Infectious disease naturally makes the regional economy in a downturn, which eventually shrinks the export of that region.  The more Korean economy depends on other countries, the worse Korean economic situation is getting because the diminished market demand of those countries results in lessening the volume of export from South Korea.Those regions are the major trading partners of South Korea. According to the South Korea International Trade Association, last year the Korean exports to US, China, Japan and Europe were US$307.13 billion, accounting for 56.6% of total exports, US$542.23billion. Especially, the exports to China, the epicenter of the COVID-19, were US$136.22billion, a quarter of total South Korean exports. 

Regarding the supply crisis, the damage from the Chinese supply chain gave the biggest shock to the world. Chinese factories which cover one-third of the world’s manufacturing, stopped for several months and the supply chain has been struck heavily. Enterprises in other countries regret they have heavily depended on China for intermediate production, the origin of COVID-19. Hubei Province, where Wuhan city is located, has played a major role as factories of automobiles, electronics and pharmaceuticals. Until the outbreak, 60% of the top 500 global companies in terms of annual revenue, operated the manufacturing facilities in Hubei Province.   

Until now most major multinational enterprises have grown up by producing their goods in China or by exporting the intermediate inputs to Chinese companies. This recently unprecedented disruption, however, has proven the more dependent a company is on Chinese markets, the more risks a company has. Apple, the largest company in the world in terms of aggregate value of listed stock, reduced its production in China by 50% as COVID-19 crisis accelerated.

The United Nations Conference on Trade and Development (UNCTAD) explained the impact made by the Chinese supply chain as: “A reduction in Chinese supply of intermediate inputs can affect the productive capacity and therefore the exports of any given country depending on how reliant its industries are on Chinese suppliers. For example, some European auto manufacturers may face the shortage of critical components for their operations, companies in Japan may find it difficult to obtain parts necessary for the assembly of digital cameras, and so on. For many companies, the limited use of inventories brought by a lean and just-in-time manufacturing process would result in shortages that will impact their production capabilities and overall exports. Overall, the most impacted economies will be the European Union (machinery, automotive, and chemicals), the United States (machinery, automotive, and precision instruments), Japan (machinery and automotive), the Republic of Korea (machinery and communication equipment), Taiwan Province of China (communication equipment and office machinery) and Viet Nam (communication equipment)”.

Besides China, the South Korean factories in other countries including the US, Europe, and India have had to stop to prevent the spread of COVID-19, and given the impact to supply of goods. In 2019, South Korea has barely managed to maintain 2% of growth rate mainly initiated by government expenditures, and its real economy has been in vulnerable status. Under such an economically poor situation, South Korea has been directly attacked by the COVID-19 outbreak. 

According to Chinese National Bureau of Statistics, this year China’s first-quarter GDP shrank by 6.8 % from a year ago, the first decline since 1992, when official quarterly GDP records started. Industrial production also fell by 1.1% in March, after a 13.5% decline over January and February. As Korean economy heavily depends on China, the simultaneous recession between two economies can’t be avoided. 

The International Monetary Fund (IMF) predicted that Chinese growth rate this year could be at around 1.2% and also revised South Korean growth rate from 2.2% to -1.2% because given South Korea’s high dependency on trading, the growth forecast is constrained by very weak external demand. Meanwhile, Korea Economic Research Institute (KERI) forecasted that the annual Korean economic growth this year would be -2.3%, the lowest level since the IMF financial crisis. It was the first time this institution forecasted negative growth. If the forecast on the growth of Korean Economy turns out to be correct, South Korea will experience the negative growth for the first time since the 2^nd oil crisis (-1.6%) in 1980 and the Asian Financial crisis (-5.1%) in 1998.

To prevent the world economy from plunging infinitely, each nation has unveiled unprecedented fiscal policies. On March 24, the South Korean government doubled the rescue package to 100 trillion won ($80 billion) from the previous package of 50 trillion won. The new package provides a safety net for conglomerates as well as support for small and medium-sized enterprises and self-employed business. In addition to this, on April 22, the Korean government revealed plans for an additional 85 trillion won (US$68.8 billion). A fund of 40 trillion won will be given as aid to key industries, including the airline, auto, shipping, shipbuilding, machinery, telecommunications, and power industries. And 35 trillion won is to be used as financial support for small businesses as well as buying more corporate bonds, and 10 trillion won is to increase job security. It is unclear if this ‘Helicopter Money’ can save the economy. However, it is quite obvious government financial assistance to the withering corporates as well individuals are the only solution to help them survive till COVID 19 comes to a halt.

2. Manufactures hurt by the broken supply chain 

As COVID-19 has shrunk the global demand and supply dramatically, South Korea is one the most vulnerable countries, given its heavy dependence on trade. Korea has grown to be a leading export-driven country with global supply chains, from one which had been dependent mainly on its domestic production lines.  According to the South Korea International Trade Association, the ratio of Korean offshore production facilities have been expanded in the fields of smartphones, automobiles and consumer electronics, while the ratio of overseas manufacturing of American and Japanese firms has decreased since 2016 due to the reshoring policies, mainly driven by tax breaks and operation subsidies.

Since the first patient of COVID-19 was confirmed last January in China, a large number of factories have been closed for three months but reopened as the spread of COVID-19 slowed down. During the shutdown periods in China, Korean Conglomerates such as LG Chem, SK Innovation, Hanwha Q CELLS that operated in China naturally closed their plants. Only a semiconductor factory of Samsung Electronics located in Xian held its production around 100% in January and February even when COVID-19 spread rapidly. As COVID-19 spread actively in Europe and the U.S. in March, Korean factories in those areas faced the shutdown of their plants, which eventually gave the significant blows to Korean leading industries such as electronics, automobiles, and chemicals.    

As soon as Eastern European countries joined the European Union in 2004, Korean companies set up the business models that goods are produced in Eastern European countries mostly to be sold in Western European countries. Since the Eastern European nations are geographically close to Western ones and access freely there, it leads naturally to lower the production and transportation cost. According to the Korea Trade Investment Promotion Agency, around 160 out of 210 South Korean production sites in Europe are concentrated in four Eastern European countries.

Samsung and LG faced “production cliffs,” which resulted from the current crisis in all manufacturing factories except South Korea and China in March and April. As the production shortfall in Indian factories followed by the production termination in the U.S. and Europe was experienced, South Korean automobile manufacturers faced severe difficulties both in production and sales. IHS Markit, a global market research institute predicted global auto production could fall by 1.4 million vehicles this year due to the “shutdown of factories“ in Europe and the U.S. In this regard, Korean leading auto companies, Hyundai Motor Company and KIA Motors, which together account for the world’s fifth biggest carmaker by sales, are experiencing severe turmoil, resulting in making the component manufacturers get into difficulties at the same time.

In addition to “the production cliffs,” the sales have a tendency of decline too. It is worried that Hyundai Motor Company, Samsung Electronics, LG Electronics, more than 50% of whose revenues come from Europe and the U.S., will have a fatal blow in their sales. In particular, Hyundai Motor Company, which sold 1.27 million autos, of which 710,000 were in the U.S. and 560,000 in Europe respectively, accounting for 51% of its total revenue. It is expected the administrative orders of governments for closing stores in Europe such as France and Italy will decrease the possibilities of auto sales due to the rapid reduction of national incomes in the European Nations. 

Moreover, the sales of Hyundai Motor Company in China, where the official dealers temporarily closed their business due to COVID-19, declined to 1,007,000 cars which was a 97.4% drop from last year’s result, 38,017,000 cars. According to the Korea Automobile Manufacturers Association (KAMA), the exported automobiles in February were at the lowest levels since August 2003 with a 26.9% drop compared to the same period in 2019. It is one third of the highest sales record (304,774 cars) in December 2014.   

Korean electronics producers such as Samsung Electronics, LG Electronics in major markets including North America and Europe were blocked to seek the viable niche. It was regrettable that the biggest electronics retailer such as Best Buy in the U.S. and MediaMarkt in Germany have closed their offline stores. Samsung Electronics and LG Electronics whose sales of consumer electronics in the U.S. and Europe contribute to almost 50% of their whole revenue of consumer electronics, faced the difficult situation that they could not sell goods even if they were eager to.  Best Buy, which runs 1,009 stores nationwide in the U.S has shortened business hours and restricted the entrance of customers, which actually moved into the stage of practical closure. More than 50% of consumer electronics sales of Samsung Electronics and LG Electronics in the U.S. and Canada were generated through Best Buy in the field of offline market. 

Samsung Electronics and LG Electronics in European markets have enhanced the offline sales networks through MediaMarkt alongside with the online sales networks such as Amazon to increase the European market shares. However, MediaMarkt has closed 850 stores in major European countries such as Germany, Spain, and Italy from the middle of March, and this did plenty of damage to these two Korean companies. Meanwhile, according to the Counterpoint Research, a global market research institute, sales of smartphones in February declined 14% compared to the same period of previous year, though the global drop of smartphone sales was less than expected. Perhaps in a sign of things to come, however, sales of smartphones in China, an origin country of outbreak, have declined almost 38%.  

The reason for the sales dropping less than expected is the demand in the offline market has been switched to the online market, which made the sales in the online market grow steadily. Samsung Electronics which took the first place in the global market shares(21.9%) last February is relatively less impacted by COVID-19 than other competitors because the production lines are diversified to Vietnam, India and Korea, and the demand of Samsung smartphones had not been as high in China even before the outbreak. On the contrary, Apple which ranked 2^nd place (14.4%) in global market shares faced the difficulty in global sales for almost two weeks in February due to the production and supply disruptions in China. 

The semiconductor industry, a major leading export industry of Korea, seems to be impacted relatively less compared to other industries. The total export of Korean semiconductors in 2018 was US$126.7 billion, which broke through US$100 billion for the first time and occupied 20.9% of total Korean exports. The Korean Custom Service has recently released statistics of Korean import & export. According to it, the export of semiconductors has increased 20.3% from March 1 to March 20 compared to the same period of previous year, but the export results from April 1 to April 20 turned out to decrease 14.9% from the same period of last year. In 2019 the total export of semiconductors recorded US$93.9 billion, still occupying 17.3% of total Korean exports. It is clearly proven that semiconductors are an industry with considerable magnitude in South Korean exports. It shows, however, the sales of semiconductors increased slightly in March and gradually came to decline in April compared to the same period of last year.

Timing is important. If the spread of COVID-19 in the global community slowed down in two months, the world economy could be on track for recovery, which would continuously spur the demand of semiconductors. But if the pandemic continued into the summer, a totally different scenario should be taken into account. Semiconductors would be eventually damaged by the reduction of demand for electronic devices such as smartphones and PCs by COVID-19. The International Data Corporation (IDC), a global provider of market intelligence, has recently published a report that global semiconductor sales this year would decline more than 12% at the worst, compared to previous year. In that case, the semiconductor industry, working as a prop of Korean economy, would be seriously damaged unlike the current status to eventually bring up the risk of Korean economy to be heavily shaken from the bottom.     

For the post-COVID-19 measures, South Korean cooperates are expected comprehensively to review the supply chain strategy, which heavily depends on the suppliers abroad. After experiencing that more than 151 nations banned or restricted people coming from Korea and a large number of factories abroad were shut down by the local authorities, the enterprises have inevitably started to consider this constraint- that pandemic will rise more frequently in the future-in designing the future business strategy.

3. Aviation: the most impacted industry

Global aviation companies have reduced or terminated the major long distance lines. Simply speaking, Qantas Airways of Australia, announced a reduction of 90% of international flights as well as 60% of domestic flights. Consequently, the Qantas Airways explained almost 30,000 jobs would be challenged  On March 16, CAPA, the Aviation Research Company in Australia, issued a statement that most airlines in the world would go bankrupt by the end of May without coordinated government and industry intervention. The total size of the international aviation industry is US$2.7 trillion with 65.5 million related jobs. The size of Korean aviation industry is US$47.6 billion occupying 3.4% GDP to create 838 thousand related Jobs. 

Moreover, the Airlines for America, whose members are American Airlines, United Airlines, Delta Air Lines, Southwest Airlines, anticipated that major airline companies could run out of money between June 30 and the end of the year. In this regard, this organization has asked the American government for financial support as much as US$50 billion and the tax reduction of tens of billions of USD. While the international aviation industries have been experiencing the devastating blow by the movement restrictions, the International Air Transport Association (IATA) forecasted passenger revenues would shrink 44% compared to 2019 to bring the damage of US$252 billion to the global aviation industry.

Nine South Korean airlines have their backs up against the wall due to the extremely serious demand difficulties related to COVID-19. As of April 20 a total of 151 countries and territories have imposed bans on people coming from Korea, which almost eliminates international flights for Korean aviation companies. Meanwhile, on April 2^nd the Korean National Assembly Research Service released the report of “The Current Status of Financial Supports and Further Assignments for the Aviation Industry related to COVID-19.” This report explains on the basis of third week of March that passengers of international flights decreased 93.5% compared to last year and daily passengers in the Incheon International Airport shrunk 91.6% from 190 thousand people on March 16, 2019 to 16 thousand people on March 16, 2020. Korea Civil Aviation Association (KCA) announced the number of air passengers stood at 1.74 million in March. This is the first time that the figure has fallen below 2 million since such statistics began to be recorded from 1997. Additionally, this report states that until June 2020 the sales of Korean Aviation companies are estimated to drop around US$5.25 billion, and expresses the concern that eventually the companies could go bankrupt and the International Aviation Networks could collapse eventually, if this pandemic situation continues.      

Due to the features of the aviation industry, the portion of fixed costs in the operation expense occupies 35% to 40%, which naturally makes the majority of the aviation industry manage to hold their business by wasting the cash reserves. Considering the operation expense and interest costs, South Korea’s leading air carriers-Korean Air Lines and Asiana Airlines are assumed to have monthly outflows of cash amounting to US$667 million and US$408 million respectively. At the same time, Jeju Air, a representative low cost carrier (hereinafter called as “ LCC”) has been experiencing the outflow of cash amounting to US$83 million monthly. These outflows are unsustainable without eventual revenue improvements and could lead to the collapse of the firms.            

As the risk of collapse of global aviation industries are apparent, governments of developed countries have initiated emergency financial support on a massive scale. On the contrary, in February, Korean government announced to allow the national banks to lend the loans only to the LCC up to US$250 million, which is far from enough to revive the domestic aviation industry. As huge losses in the second quarter was expected for the aviation industry, the South Korean government was asked by the Korea Civil Aviation Association to roll out an upgraded support measure for air carriers.

On April 6, the Federation of Korean Industries published the research “The current status of diminishing cargos in aviation transportation and its implication.”, and pointed out that the production plants have been shutting down and aviation of passengers and cargoes have been decreased due to COVID-19. In this regard, this research states that Korean exporting companies are entirely bearing the damages from the increasing transportation costs and the delay of the shipments. Especially, since the high valued products mainly depend on the aviation transportation, it consequently brings out the critical consequence to the exports. For resolving the chaos of Korean exports and normalizing the aviation transportation networks, it is highly required to remove the entry restriction and provide the financial support for the aviation industries which might be in the bankruptcies in a chain.           

Currently, Korean relief programs for the aviation industry have been criticized by relevant stakeholders such as the industry, the National Assembly, and experts in regard to the fact that that program could lower the financial burden of the aviation industry but the magnitude of the assistance is relatively low. On April 3, Korea Civil Aviation Association repeatedly asked for additional financial support by sending a petition to the Ministry of Transport and Construction, the Ministry of Economy and Finance, and other related government organizations, mentioning that the aviation industry could not survive solely on its own measures without wide-scale assistance from the governments. The aviation industry is the national strategic industry, which clearly has significant gravity to influence our economy and other industries. Therefore, it is strongly required that the government immediately takes more progressive and effective measures to relieve the aviation industry before it’s too late.   

4. Withering self-employed business 

Due the spread of the COVID-19, “shut-down” and “stay inside” policies in the cities and countries all over the world have eventually put a halt to the business related to so called “human contact industries” such as restaurants, bars, grocery and small shops, and resulted in enormous economic impact on self-employed business or shopkeepers.

Meanwhile, South Korea has introduced the “Social Distancing Policy,” which restrains people from going out and gathering due to COVID-19 since March. And it has caused critical damage to the self-employed business in South Korea as other countries. Especially the ratio of self-employed businesses in South Korea is 25.1%, almost 4 times as high as that in America, 6.3%. In terms of self-employed business’s ratio, Korea ranked 5^th in the OECD member countries. Therefore, the economic impact on the self-employed business is disseminating negative effects in overall Korean society. According to the Market Research Data published by the Korea Federation of Micro Enterprise on March 16, the moving population has decreased 80% in major domestic commercial districts, while the total sales declines of the self-employed business in Seoul were assumed to be US$ 250 million on a daily basis.

South Korea is the country where COVID-19 has started relatively earlier than other countries. It made the customers for businesses drastically drop since February, which consequently decreased 145 thousands of the entrepreneurs having employees such as restaurants, and on the contrary increased 149 thousands of the entrepreneurs having no employees to manage the business by themselves. It shows the entrepreneurs struggled to survive by minimizing or eliminating employment.

In February, the total cases filed up in the national courts including the Seoul Insolvency Court increased by 19.2% for individuals and 12.6% for the corporations as the restaurant business, lodging business, retail business, and small business owners were pushed to the limit due to the financial difficulties. The South Korean government announced the rescue package to cope with COVID-19, including programs for self-employed businesses. According to the aid plan, the size of support for small and medium-sized enterprises and self-employed business people was expanded to 58.3 trillion won.

The aid package included financial support for them to 12 trillion won, which would allow them to borrow money at the interest rate of around 1.5 percent from every financial institution in South Korea. A 5.5 trillion-won special loan guarantee program was also introduced and the rollover of debts could be done at all registered financial institutions. The amendment bill to the Restriction of Special Taxation Act has been passed to lower value added tax for the self-employed, whose annual revenue is from 66 million won to 88 million won. The number of beneficiaries is supposed to be around 1.16 million. Furthermore, the self-employed, whose annual revenue is below 48 million won, are exempt from VAT. To make the financial aids including loans and guarantees activate for self-employed businesses damaged by the COVID-19, it is urgently required to provide sufficient funds to those quickly. 

5. Latent power of IT/Bio start-ups showing presence in the crisis

South Korea has now been recognized worldwide as a best practice of response system against COVID-19 with its leading testing abilities and innovative use of technology. The main reason South Korea has successfully coped with COVID-19 is contributed from the development and production of the test kits of COVID-19 in shortest manners and the “The Epidemiological Survey System of COVID-19”, which finds the movement of infected individuals to share the relevant information including the traces of patients, and prevents the transmission of infectious disease. 

Once the society experiences the tremendous crisis, the new business opportunity can be created through discovering the potential capacity in exploring the solution to overcome the difficulties. South Korea has peeked into the new possibilities in emerging business sectors such as Bio and IT, while experiencing the significant damages by COVID-19 in various industries. 

[Leading Testing Capacities]

South Korea has established the daily test capacity of COVID-19 up to 20,000 cases, and conducted aggressive disease diagnosis to effectively prevent the diffusion of the COVID-19. In establishing successfully such a biggest detection capacity of COVID-19 in the world, the development of the test kits using the RT-PCR technology which shortens the test time from one day to six hours and fast introduction of the mass production system are crucial. In introducing the test kits on right time, the biotech start-ups deserve the credits for it. The biotech start-ups such as KogeneBiotech, Seegene, SolGent, PCL, LabGenomics, Cancerrop and SD Biosensor participated swiftly into the development and production of test kits. Kogene Biotech instantly kicked off to develop the test kits on January 10 as soon as the information of the infected was reflected on the GISAIS, which stores the virus information collected by the WHO, and that reaction was 10 days earlier than the first patient was diagnosed on January 20 in Korea. Solgent also started to develop the test kit on January 17.

Without the innovator’s spirit of the start-ups, the situation South Korea is facing now would be totally different. Moreover, experts in the Korea Centers for Disease Control and Prevention have played an important role: they granted the use of new test kits to the start-ups within a week. It was four days before the first patient was diagnosed in Korea. An artificial intelligence-based big data system Seegene had in-house has enabled it to quickly develop a test kit in 2 weeks to timely respond to the spread of COVID-19. Without an in-house AI system, it would have taken more than 2 months to develop the test kit. When COVID-19 just broke out in China, Seegene predicted in mid-January an enormous volume of test kits would be needed, and entered upon development. As of April 13, 7.7 million units of Korean test kits have been exported to more than 100 countries in the world. Considering the total number of tests done for South Korean people was about 500,000 since the outbreak of COVID-19, the exported kits are more than 15 times of the units which have been used in Korea. South Korea has also introduced a “drive-through” testing system initiated by a Korean doctor for the first time in the world, which many countries benchmarked and eventually adopted.

At “drive-through” testing facilities, officials in white hazmat take fluid samples from the driver and passengers. It takes only 10 minutes and results are texted to the patient, usually. Meanwhile, a “walk-through” testing booth has been firstly applied in the airport. The Korean Intellectual Property Office supported to complete the process for the Korean patent of walk-through testing booth, and carried out the consultation for international patent application.  

[Innovative Use of Technology]

South Korea has been operating a system to support epidemiological investigation of people infected with COVID-19. Additionally, individual companies created websites and cell phone applications which plot the locations where people have been infected by COVID-19, to make them avoid these areas easily. A warning notification is pushed to a user’s cell phone if they come within 100 meters of a place where a person infected by the virus has stayed. The system helps health authorities to immediately check various data such as surveillance camera footage and credit card transactions of confirmed COVID-19 patients to trace their movements. It has been developed on the basis of various “Smart City” technologies in cooperation with the Ministry of Science and ICT, the Ministry of Land, Infrastructure and Transport and the Korea Centers for Disease Control and Prevention.

As stated above, while there are startups finding new business opportunities amid the COVID-19 crisis, it is true there are also many startups or ventures facing financial difficulties like blockage of bank loans due to the weak financial guarantee and small revenue figures or failure of raising funds from investors. To resolve these problems, the Ministry of SMEs and Startups introduced the support programs for 8,400 start-ups and ventures on April 8. If successfully implemented, US$1.83 billion would be provided for the start-ups and ventures by the end of this year.

Meanwhile, IT technology companies in Silicon Valley in the US having Artificial Intelligence and remote technology are seeking out creating the business opportunities in resolving the current issues caused by the COVID-19 crisis.        

Innovation is also happening in other areas. The users of  Google Classroom has almost doubled in a month to 100 million from 50 million in the beginning of March as all the school shut down due to the COVID-19. And the number of users of the “Zoom” service, an American communications technology company, has increased 20 times from 10 million at the end of 2019 to 200 million last March. The “Untact business”, which has been operated partially in the education and some sectors, is expanding to all businesses as COVID-19 has spread out fast. The demands on online shopping have explosively increased and the real estates, recruitment, banking and exhibition business are also stepping into the new “Untact” era. For example, South Korean construction companies are considering applying more advanced technologies such as Artificial Reality and Virtual Reality to the cyber model house.           

South Korea is viewed as being in a better position than following the IMF crisis in the end of 1990s. Even though South Korea has been significantly damaged economically due the COVID-19, it also found out that the new potentials for the growth such as COVID-19 test kits, the fusion of Biotechs & Information technology, and the transformation into Untact business are increasing. If the crisis of COVID-19 settles down soon, the key elements whether Korean companies including the start-ups could seize the tremendous opportunities or not will rely on the success of transformation into the new environment. Therefore, it is absolutely required for the companies to transform shortly to survive, and achieve the growth.

Conclusion

As COVID-19 is still in progress it is not easy to forecast the exact impacts on the global economy. However, based on the statistics so far, it seems that there are some similarities with the case of the Spanish flu. The COVID-19 Pandemic is giving significant impacts to the global community as the Spanish flu did 100 years ago. According to the analysis by Robert J. Barro, a professor of Economics at Harvard University, the Spanish flu eventually caused the death of 39 million people, 2% of the 1.8 billion global population heavily striking the whole world during 1918-1920. It is assumed that the global GDP at that time being composed of 43 major countries dropped 6%, while private consumption did 8% during that period.  Asian Development Bank estimated that the global cost of COVID-19 might be as high as US$4.1 trillion or 4.8% of global GDP if COVID -19 keeps spreading longer.

According to the International Labor Organization (ILO), the COVID-19 crisis is expected to wipe out 6.7 percent of working hours globally in the second quarter of 2020 – equivalent to 195 million full-time workers. The Korean government should react to this risk with aggressive fiscal and financial policies to prevent the companies, small business owners, and self-employed business from getting into bankruptcy, in addition to supporting the wages for maintaining the employment. Being cautious of the financial soundness, it is critical to provide the maximum financial support in order to make the economy recover fast with resilience after the COVID-19 is over. The national debt ratio to the GDP in South Korea was around 10% until the mid of 1990, but now exceeds 40%. It is strongly required to focus all the assets in overcoming the crisis, while radically reducing the unnecessary spending as the financial soundness is essential to maintain the national credibility.  

In an addition to the financial support, the South Korean government, which has so far given too much importance to pro-labor policies and introduced compulsive regulations excessively, should deregulate the anti-market policies and encourage the corporate investments by reforming the labor market and tax system. Furthermore, the government should refrain itself from intervening into the private sectors. Without these measures, enterprises could not revive even if the financial support from the government is provided. If COVID-19 calms down and it naturally leads to resolving the anxiety of people, the consumption and investment will be somewhat encouraged, which is expected to make the domestic markets stable. But, it is difficult to assure that South Korean economy, which has a high dependency on overseas markets and exports, could recover soon.        

COVID-19 will not be able to stop globalization. Even though it will give meaningful change to the mainstream. Therefore, enterprises have only one choice to adopt themselves to the post COVID-19 environments if they want to survive. Korea should also lessen its over-dependence on Chinese economy, and look to make sweeping strategy changes including the reshoring policy of the high-tech industries which can utilize automated facilities. As evidence of such a move, we are already seeing that the new terminology “Untact” is talked about as an alternative business way in the COVID-19 era. From now on, breakthrough innovations beyond “Untact” would be needed continuously to respond to the pandemic era which is expected to ever last.

Mentor: Dr. Eric Golson, University Of Surrey

About the author

Hyunyeob (Ian) Yun

The post Economic Turmoil in South Korea as a result of COVID-19 appeared first on Exploratio Journal.

Introduction

Chinese economic reforms, which have been underway for three decades, have more than doubled China’s economic growth, from an average of 4.4 percent annually before 1978 to an average of 9.5 percent after 1978. It has resulted in spectacular growth and poverty reduction, transforming China from the world’s poorest country into a major economic power. Nowadays, China is the largest producer and consumer of industrial staples and a hub of international trade. Statistically, the current size of the Chinese economy, in terms of GDP, is larger than the sum of eighty-three countries in Eastern Europe, the CIS, and all of Africa. 

With a booming economy, nevertheless, China’s potential has not fully developed. Looking at its current situation, there are obvious deficiencies which are hindering its development in the areas of schooling, high-tech innovations and inequality. Each of these need to be tackled for China to move to the next level of economic growth.

China is suffering from a gaping chasm in the school system. Superficially, the standard test system performs well as an equalizer in China’s education. Indeed, it merely contributes to a fairly equal access to education in urban areas, namely developed cities such as Shanghai and Beijing. As a counterpart to urban cities, rural areas are still afflicted by uneven distribution of education. Living in remote villages, villagers share an average education attainment of primary school due to the lack of financial growth and limited education awareness. Obtaining a low education level, many talents in rural areas are stifled and hindered from shining their potentials. 

Moreover, China is facing a scarcity regarding to its high-tech innovations. Though putting a huge stock in developing technology, compared with other developed countries, China is still fallen behind. To name an example, China has struggled to develop “self-sufficiency” in cutting-edge semiconductors. Originally outsourced to foreign investments and innovations, China is in great demand of new technology inventions. Consequently, a lack of domestic innovations have negatively impacted China’s productivity. 

As the result of more than two decades of rapid economic growth in China, millions have been lifted out of poverty, resulting in an impressive decline in the poverty headcount ratio. However, economic growth has not benefited all segments of the population equally or at the same pace, causing some income disparities to grow, resulting in a large increase in income inequality. This widening inequality has weakened the support for growth-enhancing economic reforms and may spur Chinese governments to adopt populist policies and weaken reform prospects. 

The majority of previous studies focused on China’s spectacular performance in the area of poverty alleviation and economic reforms. To expand public opinions and reveal potential dangers, this study will analyze the current Chinese deficiencies behind its thriving economy. The null hypothesis is that despite its current achievements, China’s development is impeded by its education disparity, income inequality, and limited high-tech innovations. 

Literature Review

The existing literature on this topic has generally been complementary of China’s rise, but pointing to the normal weaknesses of a developing state. In The Fundamental Institutions of China’s Reforms and Development by Chenggang Xu, China’s economic reforms has performed a spectacular job during the last twenty years, reducing poverty at an unprecedented scale. However, from the viewpoint of standard wisdom, China’s institutions and policy are notoriously weak. Conventionally, countries should protect private property rights and refrain itself completely from interfering business. Nevertheless, China’s government is deeply involved in domestic business, which would incur serious corruption and is believed to be ill-suited for development. The regionally decentralized authoritarian (RDA) system ensures China’s market can function well. The RDA system is characterized by highly centralized political and personnel controls, and, a diametrically opposed, decentralized regional administration and economic system This could be reformed so subnational governments can control their own business and offering them incentives, government could promote the economics growth, alluring each local government to compete in quantifiable targets. 

According to Brandt, Ma and Rawski’s From Divergence to Convergence: Reevaluating the History Behind China’s Economic Boom China’s modern economic growth was incurred firstly by the outbreak of WWI, which weakened competitive pressure from European imports, spurred the expansion of domestic manufacturing in the absence of tariff autonomy. Attracting vast amount of foreign investment, China’s domestic investment was increased, leading to an economic expansion. Another factor is the improvement of transportation is that in China completion of railways between cities hugely reduced time needed to ship goods, thus expediting manufacture. There was also a sweeping transformation in banking and finance: hard currency such as silvers were substituted by banknotes, contributing greatly to the convenience of trading. These authors also argue China’s economy growth was also rested on many important political changes through 2013. The revival of household farming, named Household Responsibility System, elicited an explosive growth in food output. Along with the agriculture shifts, China also embraced a decentralizing fiscal policy. Instead of the central government implementing every single order, subnational institutions were endowed with rights to directly appoint tax and revenues. 

Education in rural areas remains a problem. In Yongqing Dong’s paper Intergenerational transmission of education: The case of rural China, it is argued that in rural areas there is less formalized education, with an intergenerational transmission of education. According to the data, proper education could bring enormous benefits to rural individuals: providing access to off-farm employment opportunities, improving health status and productivity. As the outcome suggests, the government has the necessity to enhance rural people’s education attainment, since raising education bar of one generation historically leads to significant educations gains for the next. Moreover, government should consider programs which release rural students from intense financial restrictions so these individuals can gain college or high school level education. generation. The popularizing of education would have long-term effect for accumulation of educational attainment in these areas and lead to more scientific gains and domestic ingenuity. As a result, by taking advantage of the natural effect of the intergenerational transmission of education government may ensure long-term fortitude among its rural people

Analysis

Turning to data for the arguments for this paper, normally, Illiterate population refers to the proportion of the population aged 15 and older who are unable to read or have difficulty in reading. In China through the education reform, the number of illiterate people is hugely decreased; moreover, since 2015, mandatory free primary school education has helped to virtually eradicated illiteracy. People have recognized literacy as an indispensable quality that it poses the basis for all other forms of education. Additionally, literacy skills are essential for the promotion of sustainable development, both in terms of economic progress and social advance. Though China has took a large leap forward in eliminating illiterate population, regional disparities in illiteracy rate still persist in China. Illiteracy in developed regions, with prosperous economy and advanced education, tends to be lower than in rural and undeveloped areas. 

In figure 1, the illiteracy rate in Tibet has been at a staggering 43.95%, meaning roughly half of its population are unable to read and write, and thus are not able to receive any education. In comparison with China’s average rate of 7.52%, it is approximately 36 percent higher, attesting to an extraordinary inequality in education attainment across regions. Contrasting Tibet against Liaoning, a prosperous city in northern China, which has only 2.12 percent illiteracy there is a range of 42%, signifying current severe discrepancy in the regional illiteracy rate. While citizens in developed cities enjoy their fulfilled life with illiteracy rate practically eliminated, people in poor and remote regions are still afflicted by high illiteracy rate, let alone more diversely advanced education or technology improvement. 

Intriguingly, as a financial center, transportation hub, and technology leader of China, Shanghai has a rather mediocre illiteracy rate of 7.26%, which is largely deviated from public expectation. According to the graph, this number is only 0.3 percent lower than the average, much higher than it supposed to be for a city whose economy ranks the highest in China. This suggests there are significant differences in educational inequality. Possessing 2,195 universities and 30 million graduates, Shanghai’s education level is unquestioned. Nevertheless, its booming economy has triggered an almost outrageous tuition for even primary school. Consequently, the price for attending school poses a huge hurdle for reducing illiteracy rate. The inequal distribution of wealth hinder many children to receive necessary education. That, in turn, is hindering Shanghai from further improving its citizens’ education attainment. 

China is still recognized by some critics as a country that cannot innovate. There are various reasons for that: Chinese students are taught rote learning and do not know how to think for themselves. China is too far behind the leaders to ever catch up. Weak IP laws and enforcement mean China has been a copier of technology. In 2017, China’s investment in R&D was $370.6 billion in 2017, second to the $476.5 billion of the USA. These funds are crucial to augmenting technology transfer and expediting the acquisition of technological capability. With the unprecedented financial support, Chinese technology has achieved outstanding break through. However, it is undeniable China is still in a phase where it cannot innovate new technology independently. 

The graph presented in figure 2 explains the reason for the lag in high-tech innovation. In the figure about number of patents applied by every 10,000 people, Beijing with its prosperous economy has 111.2 patents every 10,000 residents. The number decreased drastically, and for ChongQing only 9.1 patents were applied for every 100,000 people. Such disparity in patent applications indicates a staggering inequality in the resources and economy between regions. Children in under-developed regions cannot gain high-level education and do not have technology related experiences. Consequently, Chinese youngsters’ intelligence are not fully tapped. Technology innovation, which requires a tremendous talent has definitely fallen behind in China. 

China has experienced rapid economic growth over the past two decades and is on the brink of eradicating poverty. However, income inequality increased sharply from the early 1980s and has rendered China among the most unequal countries in the world. Instead of dealing with this problem this inequality is likely to expand further in the future, leading to an increasingly severe gap in developed and undeveloped cities. 

In figure 3 it is seen that households in Shanghai earn the highest average income of 50,000RMB, while Xizang has the lowest income of merely 10,000RMB. Simple calculation presents a 40,000RMB discrepancy, which is four times the average income for Xizang residents. As this gap embeds into China’s economy, all forms of development are impeded: individuals are hindered from showing their talents, due to the lack of job opportunities and education attainment in relatively poorer areas. With a limited income of 10,000RMB, it is impossible for Xizang to achieve economic growth and technology innovations. Family are forced to give up children’s education attainment, in exchange for labor force and revenue. 

Additionally, the whole graph is clearly skewed to the left, as cities get further remote and inland, their average income decreases along the way. The pattern indicates the current development difference between coastal cities and inland cities in China. Cities with access to the Pacific Ocean inherently possess an advantage: Shanghai, Jiangsu, Tianjin provinces are all classic examples of developed coastal cities with access to trade, respectively earning income of 50,000RMB, 30,000RMB, and 31,000RMB. In contrast, most inland cities such as Xizang (10,000RMB) and Gansu (11,000RMB), due to their distance from ocean, maintain low average incomes. This uneven distribution of income caused by geographic traits further attest to the inequality of regional disposable income. With this unequal distribution, China’s development is hindered due to those poor cities are lagging, rendering developed cities’ boost in economy futile. 

Conclusions and Policy Recommendations

Based on the analysis above, we can determine China’s economic development is impeded by its lagging quality of innovation, education disparity, and income inequality. 

Education Disparity

The analysis has proven the negative implications of the chasm in regional education attainment. Children in poorly developed regions, especially those in inland rural areas, are excluded from mandatory free primary school education. This leads to a staggering discrepancy in terms of literacy rate. Armed with these facts, the Chinese government should allocate more subsidies to local governments, in the prospect of pervading rural areas with free primary school policy. By popularizing the basic education, China could tap into its talents’ potential, helping to hurdle development obstacles. 

Income Inequality Tax

China’s overall economy is growing fast, but it is not growing evenly. Abysmal inequality in average disposable income is impeding China from developing further. Some Regions with only one third average income than others would produce inefficiently and developed in a low speed. As the gap augments annually, China’s economy would become unstable, facing serious internal economic inequalities. Tax and internal transfer systems play a key role in lowering overall income inequality. Through taxing residents with higher salary, China could effectively redistribute income from wealthy to those with lower incomes. While corruption is severe in China and could impede the collection of taxes, China could deploy stricter regulations regarding to corruption to eradicate its hazard. 

High-Tech Innovation

China’s high-tech innovation is still behind compared to other developed countries, with fewer patents registered per capita. This largely caused by the disparity in education where talented individuals in rural areas cannot access advanced education and thus cannot contribute to technology improvement. Moreover, lower incomes also thwart their enthusiasm for innovation. To solve this impediment, China should allow individuals in rural areas high levels of education and allow them to tap into rural people’s talents. Additionally, China could enforce more policy to protect intellectual property, thus rewarding innovation and the development of new technologies.  

References

Mentor: Dr. Eric Golson, University Of Surrey

Education in China – Statistics & Facts Published by C. Textor, Apr 7, 2020 https://www.statista.com/topics/2090/education-in-china/

Income and Living Standards across China- Monday January 8, 2018 By Yi Wen, Assistant Vice President and Economist, and Brian Reinbold, Research Associate

https://www.stlouisfed.org/on-the-economy/2018/january/income-living-standards-china

China IP Office released major IP statistics of 2018- Tian Lu Monday, January 28, 2019 

http://ipkitten.blogspot.com/2019/01/china-ip-office-released-major-ip.html

About the author

Carter Chen

The post How China’s Economic Growth Could be Impeded by Inequality appeared first on Exploratio Journal.

Introduction

Decision making has always been an important role in human life, especially in economics. In the market of oligopoly competition, a few companies set the price interdependent from each other, competing using the game theory. Each decision they make on the price determines their gains and losses. In economics, people serve as rational agents who make decisions that maximize their utility; however, this is not normally the case. Individuals’ decisions are affected by various factors (e.g. personality, educational background and also psychological state characteristics such as mood), and people do not always choose the profit-maximizing decision. The present study examines the relationship between personality and economic decision making. 

Personality is closely associated with behaviors, cognition, and emotions. Assessing personality can be used to predict behavior tendencies. One way to measure personality is by using the Big Five personality test. The Big Five personality traits includes conscientiousness (disorganized / impulse vs. careful / disciplined), agreeableness (ruthless / suspicious vs. soft-hearting / trusting), neuroticism (calm / secure / self-satisfied vs. anxious / insecure / self-pitying), openness (practical / conforming vs. imaginative / independent), and extraversion (retiring / reserved vs. sociable / affectionate) (McCrae & Costa, 2008). The Big Five personality factors are relatively stable in adulthood and appear to be present in every culture. It also clearly depicts the whole picture of individual’s traits and as a result, studies mostly apply the Big Five personality test for predicting behaviors. 

The present study employed the Dark Triad personality measure as a form of personality assessment. The Dark Triad is a measure of malevolent personality developed by Paulhus and Williams (2002). People who score high on the Dark triad are more likely to commit crime and cause social distress. The three dimensions of the dark triad are Machiavellianism, Narcissism, and Psychopathy. Narcissism stands for strong ego, greediness, and a sense of superiority and dominance. Machiavellianism stands for the manipulative, calculating, and amoral personality and people with high levels of Machiavellianism typically focus on self-interest and self-gain. Psychopathy, on the other hand, is marked by cruelness, impulsivity, and anti-social behaviors. The Dark triad, in general, is related to antisocial behaviors, such as aggression and violence, and emotional deficit, such as a lack of empathy and theory of mind (Paulhus & Williams, 2002). It is also related to poor well-being such as loneliness and anxiety. People who score high on the Dark triad are more likely to score low on agreeableness in the Big 5 personality. 

Personality has been linked with cognitive functioning, such as attention, reaction time, but also decision making. One study found that personality measured using the Big 5 questionnaire influences decision-making during the Ultimatum Game, which measures the willingness to share (Fiori et al., 2013). In the Ultimatum Game, the first participant was asked to divide 10 dollars with the second participant. If the second participant rejects, then neither can get the money. According to the theory of rational agent, the proposer will always offer the smallest amount, and the receiver will always accept. However, the experiment findings do not agree with the prediction. It was found that participants who scored higher on conscientiousness and lower on extroversion were more likely to accept the offer in the game (Fiori et al., 2013). Individuals with high neuroticism seem to have decreased willingness to take risk. In another study, participants were asked to choose between a lottery and a certain amount, six times. The lottery is always the same but the fixed payment varies in each choice. The task was repeated four times. For the first two times, the lottery is positive, and the lottery can incur a loss of $1 for the third time and $5 for the last time. The researchers would record the number of times participants choose the lottery over a fixed payment and associated these with the person’s personality (Anderson et al., 2011). In the experiment of sequential prisoner’s Dilemma, two players each had $5, and the first player decided whether to send $5 or $0 to the second player. The amount would double after the transfer. Then the second player decides to transfer back a number between $0 and $5. The researchers recorded the money transfers and found that agreeableness increases the fraction of first moves transferring $5 and increases also the average amount transferring back. Cognitive skills and IQ also influenced the result (Anderson et al., 2011). Another study found that individuals with Dark Triad personality traits were more likely to engage in opportunistic decision-making, which is the actions assessed toward an immediate circumstance in favor of the individual or company (D’Souza & Lima, 2015). In business, people with Narcissism are visionary; they seek superior position to influence over others and make decisions that are beneficial to their reputation. On the other hand, narcissistic people are also innovative with prominent leadership with the ability to lead their company to glory. Evidence has shown that most managers and people in executive positions in a corporation score low in Psychopathy; they are not self-centered, cruel, or cynical, but can contribute to the longevity and gains of the companies. People with high levels of Machiavellianism seek management and leadership positions, which allow them to manage, control and manipulate people inferior to them. They focus on their personal power and can easily influence others (D’Souza & Lima, 2015). 

Most previous research has been done on the Big 5 personality measure in relation to decision-making, including willingness to share and take risks and the game theory, while the relationship between the Dark Triad and various decision-making games has not been assessed in detail. Moreover, previous research mostly focuses on adults rather than younger population groups. The present study aims to explore the relationship between the Dark Triad personality and economic decision-making, specifically, the wiliness to take risk, in a female sample of high school students. It was hypothesised that the Dark Triad personality traits would be associated with high school students’ decision in risks-taking contexts. 

Method

Participants and sampling

Participants in the present study were female students from an all-girl high school in Virginia (US), with the age range from 14 to 20. Convenience sampling method was used: the questionnaire was sent to the school email, so every student in the high school had access to the questionnaire and could fill it out voluntarily. It was attempted to obtain a homogenous sample, with all participants being females with similar age range and similar education level. 

Design

This study was based on a non-experimental cross-sectional design. The dependent variable was decision-making/ risks-taking and the independent variable was personality based on the Dark Triad. 

Measures

Personality was measured by the short Dark Triad questionnaire (Jones & Paulhus, 2014). It contains 27 questions: 9 questions measured Machiavellianism (e.g. “I like to use clever manipulation to get my way”), 9 questions measured narcissism (e.g. “People see me as a natural leader”), and 9 questions measured psychopathy (e.g. “I like to get revenge on authorities”). Each item was rated on a 5-point Likert-type scale (strongly disagree-strongly agree; Jones & Paulhus, 2014). Sum scores for each of the sub-scales and the overall global scales were computed and higher scores indicated higher attributes of the respective trait.

Decision-making was measured by Iowa Gambling Task on the online simulation on Psytoolkit (Stoet, 2010; Stoet, 2017). Participants would be given $2,000 at the start and asked to choose from one of the four card decks (A, B, C, and D) for 50 trials. Deck A and B yield $100 each time and deck C and D yield $50. Each time a participant chooses a deck of card, there is a 50% chance to get a penalty. The penalty is $250 for choosing deck A and/or B and $50 for choosing deck C and/or D. Participants need to gain as much money as possible. Without knowing how much each deck of card yields and the amount of penalty it incurs, participants would have to make a decision each time. The online experiment recorded participants’ reaction times (used to determine cognitive skills), their choice, whether there was a penalty and money they gained and lost. This study focused on how many times participants chose deck A/B versus deck C/D to determine the willingness to take risk: the more deck A/B was chosen, the more willing the individual to take risk. An index was calculated to determine decision-making based on A/B choices divided by C/D choices and values >1 indicate risk taking and <1 indicate risk aversion.

Further, math ability was assessed with rating from 1 to 5 (very low – very high); math liking was assessed as 3 ratings (Yes/No/Neutral). Students reported whether they have studied Psychology or Economics (Yes/No) and also gave their mood ratings on a 3-scale (Low or negative mood/Neutral mood/High or positive mood).

Statistical analyses

All data analyses were performed on SPSS (IBM, version 25). Normality tests were performed on the outcome measure and revealed that decision-making was highly positively skewed (Skewness: 4.00 and Kurtosis: 17.70) and the Shapiro-Wilk test (p<.001) suggested violation of normality. Log-transformation (ln method) was applied and normalised the distribution (Skewness: 0.03 and Kurtosis: 2.70; Shapiro-Wilk test, p=.080) and hence the log-transformed data was used with parametric testing. Robustness checks were conducted prior to analyses. To explore whether individuals who dropped out prior to the DM task differed in personality from individuals who completed the survey three independent-sample t-tests were conducted. Findings showed that the three sub-scales Machiavellianism, Narcissism and Psychopathy were not statistically significantly different between the non-completers and the completers (all p’s >.410), suggesting that the final sample seems to be representative of the whole sample that took part. 

Results

Descriptive 

Table 1 depicts the characteristics of the sample. The sample was aged on average 16.12 years (SD=1.30). The average maths ability was 3.31 (SD=0.84). Most students had not studied Economics (80.8%) or Psychology (80.8%). 

From the personality traits, the average score on Machiavellianism was 3.27 (SD=0.59); the average score on Narcissism was 2.77 (SD=0.60) and the average score on psychopathy was 2.15 (SD=0.70). The global score of the three traits was 8.19 (SD=0.87). 

The mean score of decision-making after applying log-transformation was 0.09 (SD=0.87), suggesting that participants on average were more risk-taking.

The effect of personality on decision making

Bivariate Pearson’s correlation analyses were conducted and showed that Machiavellianism was not correlated with DM, r=.217, p=.286. Narcissism was also not related to DM, r=-.214, p=.293. Psychopathy was also not related to DM, r=.082, p=.690. Further, the global score was also not related to DM, r=.035, p=.865. This suggests that the three personality traits were not related to DM. The other study variables, i.e. maths levels, maths liking and mood did not associate with DM either (all p’s >.392).

A multiple linear regression model was run to explore whether there is an effect of personality on DM, when controlling for the other potential confounding variables (i.e. maths levels, maths liking and mood) and the findings revealed that none of the variables predicted DM, F(6,19)=.507, p=.796. 

Table 1. Study variables for the full sample.

Discussion 

The present study aimed to explore the relationship between personality and decision-making in the context of risk taking. The study employed young females as a sample. It was hypothesised that Dark Triad personality traits (Machiavellianism, Narcissism, and Psychopathy) would influence decision-making on risk taking. Decision making was measured with the Iowa Gambling task which assesses the risk taking vs the risk aversive behaviour in terms of gaining financial rewards and paying penalties for wrong decisions. The findings revealed that there were no relationships between Dark Triad personality traits and risky decision-making in the present sample. 

The results are different from previous findings, which have consistently found that the Dark Triad personality traits are influencing decision-making. One previous study indicates that people with the Dark Triad personality traits (indicating higher levels of Machiavellianism, higher levels of Narcissism, and higher levels of Psychopathy) are more likely to make decisions that are in favour of themselves (D’Souza & Lima, 2015). However, the present study shows no relationship between these personality traits and decisions that make them better off (i.e. gaining more money and paying lower penalties). One explanation for the null findings is that the sample had relatively low scores within each of the personality sub-scales and low variability in the sample in those personality traits reduces statistical power and hence impedes potential findings. 

Previous studies focus on adults, while the present study has been conducted using high school students, a sample in which potentially financial risk taking behaviour is rather low (as they experience these risk taking behaviour in daily life to a smaller extent). A previous study had shown that personality influences acceptors’ decisions in the Ultimate Game but not proposers’ decisions, and more honest people gained more and more introverted people accepted more often. The study was conducted on a sample aged 18 – 44 (Fiori et al., 2013), suggesting that these relationships might occur in a wider age range, including adults but not in younger samples. One study of 91 undergraduate students (aged 18-28) from Ohio University consisting of 90% Caucasian explored the Iowa Decision-making Task and found a relationship between personality and deck selection, however, personality traits and mood have been shown to impact the performance of the participants (Buelow & Suhr, 2013). The BIS/BAS scale was used for measuring personality and also mood measurements were implemented. The results show that participants with high level of drive and impulsivity tend to focus on short-run gain by choosing more from deck A and B. It also found that individuals with high negative mood selected more Deck B than Deck C (Buelow & Suhr, 2013). However, the present study showed no impact of mood on decision making, which might attribute to the low variability in mood. 

One limitation of the study was the sample. The sample was small and only included female students. If the study included both females and males, the result might have been different. The sampling was done in only one high school due to inaccessibility to other high schools in other locations. This led to sample bias as the sample of female students could not represent the whole population of this age group. Moreover, the sampling method might have led to a sample bias; the questionnaire was sent through the school email, and might have neglected those who do not frequently check their email. 

Second, the presentation of the Iowa Decision Making Task in the questionnaire is a limitation of the study. The data collected showed that some students randomly choose the card decks (A, B, C, D) or choose them in a pattern, which might be attributed to their misunderstanding of the Iowa Decision Making Task or to their impatience in the whole study data collection period. The study was observational and could not control for many confounding variables including the participants’ environment that might influence their performance in the task. Some students might perceive the whole decision-making game as too long so they randomly choose the deck instead of trying to gain more money. The introduction of the game might not be conspicuous or clear enough for some students to pay close attention to and understand the game. The Iowa Decision Making Task was not the first choice for measuring decision-making and the initial intention was to measure economic decision-making. However, due to inaccessibility of online simulation for other economic games and time limitation, the Iowa Decision Making Task was chosen. The task could not measure specifically economic decision making and is largely used to investigate participants’ cognitive skills and mental health (Bechara et al., 1994). The 50%-chance payment on deck A and B is $250 while money gained is $100 and payment on deck C and D is $50 while money gained is $50, so clearly the better way to ensure gaining money is to always choose deck C and D. Moreover, the participants were untold about the amount of payment, so they needed to figure this out by themselves from the first few trials they engaged in (Bechara et al., 1994). As a result, the Iowa Decision Making task might not be the best measurement for risk-taking in this context. One cross-section study has shown that as age increases, people are more likely to choose deck C and D to ensure money gained. Childred and adolescents are more likely to choose risky deck A and B (Buelow & Suhr, 2009). The present study agrees with these findings as the study showed that young participants are more willing to take risk. Some previous studies have used different versions of the Iowa Decision Making task specifically adapted to a younger adult sample, which might be more useful to explore their decision making behaviour (Buelow & Suhr, 2009).

Future research should aim to explore the Dark Triad personality traits in relation to economic decision-making. Economic decision-making would be measured for example with the prisoner’s dilemma or the Ultimatum game, which were tasks used in various previous research regarding decision-making, and these studies found correlations between the Big Five personality traits and economic decision-making (with e.g. higher levels of neuroticism relating to lower risk taking). If risk-taking is to be measured, the study could apply the lottery game utilized in the previous study (Anderson et al., 2011). The lottery game is designed to incur gains or losses in different trials, with the amount of incurred losses varying in different trials, which makes it a better for measuring risk-taking as it considers more aspects (Anderson et al., 2011), while the Iowa Decision Making Task only incurs fixed losses. The sample should include both female and male high school students in a larger range of locations and also a wider age width. The study could take place physically instead of providing questionnaires/ tasks online, in order to control some external factors that might influence participants’ performance. 

The study investigated the relationship between personality and decision making. The study was conducted in high school female students with the use of an online questionnaire and a decision making task. Personality was measured by the Dark Triad personality test by Paulhus and Williams (2002) and decision-making in a risk-taking context was measured with the online simulation Iowa Decision Making Task (Stoet, 2010; Stoet, 2017). The results showed no relationships between the Dark Triad personality traits (Machiavellianism, Narcissism, and Psychopathy) and decision making in female high school students, which provides no support for the present hypothesis that Dark Triad personality traits would influence decision-making. Other variables that were assessed in the present study included math-liking, math-ability, previous knowledge, and mood also no relationships emerged between these and decision-making. The study is subject to several limitations, which include the sample and the choice of the decision-making task. Future research should apply different economic games (e.g. the prisoner’s dilemma or the Ultimatum Game) and should be physically conducted on a larger sample in order to provide more reliable findings. 

References

Mentor: Dr. Bianca Serwinski, Northeastern University

Anderson, J., Burks, S., DeYoung, C., & Rustichini, A. (2011, January). Toward the integration of personality theory and decision theory in the explanation of economic behavior. In Unpublished manuscript. Presented at the IZA workshop: Cognitive and non-cognitive skills. 

Bechara, A., Damasio A.R., Damasio H., Anderson S.W. (1994). Insensitivity to future consequences following damage to human prefrontal cortex. Cognition, 50, 7-15.

Buelow, M. T., & Suhr, J. A. (2009). Construct validity of the Iowa gambling task. Neuropsychology review, 19(1), 102-114.

Buelow, M. T., & Suhr, J. A. (2013). Personality characteristics and state mood influence individual deck selections on the Iowa Gambling Task. Personality and Individual Differences, 54(5), 593-597. 

D’Souza, M., & Lima, G. A. S. F. D. (2015). The dark side of power: the dark triad in opportunistic decision-making. Advances in Scientific and Applied Accounting, São Paulo, 8(2), 135-156. 

Fiori, M., Lintas, A., Mesrobian, S., & Villa, A. E. (2013). Effect of emotion and personality on deviation from purely rational decision-making. In Decision making and imperfection (pp. 129-161). Springer, Berlin, Heidelberg. 

Jones, D. N., & Paulhus, D. L. (2014). Introducing the Short Dark Triad (SD3): A brief measure of dark personality traits. Assessment, 21, 28-41.

McCrae, R. R., & Costa, P. T., Jr. (2008). The Five-Factor Theory of personality. In O. P. John, R. W., Robins, & L. A. Pervin (eds.), Handbook of personality: Theory and research (3rd. ed.). New York: Guilford.

Stoet, G. (2010). PsyToolkit – A software package for programming psychological experiments using Linux. Behavior Research Methods, 42(4), 1096-1104.

Stoet, G. (2017). PsyToolkit: A novel web-based method for running online questionnaires and reaction-time experiments. Teaching of Psychology, 44(1), 24-31.

About the author

Sijia Dong

The post The Relationship Between the Dark Triad Personality Traits and Decision Making appeared first on Exploratio Journal.