China’s Rose Garden

As we look to China to mount the global stage, take her place among leader nations helping to grapple with global hotspots, and as the developing world continues to idolize her centrally-directed economy in a single party system, China seems to be particularly uncomfortable in her newfound status. She has been brilliant in providing aid to those lesser nations, the ones the United States and the West seem to have forgotten, in marshaling raw materials, energy assets and commodities from all over the world, and in taking over a billion human beings out of abject poverty.

But rose gardens have thorns, and China’s hyper-growth has created levels of corruption and polarization that seem the antithesis of a “people’s republic.” Too many of her cities and their environs have been impaled on air, water and ground pollution that have exceeded our ability to measure the relevant toxic level, killing and sickening millions along the way. And as China’s growth slows, still pinning the needle by Western standards, she faces a plague that is anything but new to the rest of the world: unemployment among its newly-educated elite.

“A record seven million students will graduate from universities and colleges across China in the coming weeks, but their job prospects appear bleak — the latest sign of a troubled Chinese economy… Businesses say they are swamped with job applications but have few positions to offer as economic growth has begun to falter. Twitter-like microblogging sites in China are full of laments from graduates with dim prospects.

“The Chinese government is worried, saying that the problem could affect social stability, and it has ordered schools, government agencies and state-owned enterprises to hire more graduates at least temporarily to help relieve joblessness. ‘The only thing that worries them more than an unemployed low-skilled person is an unemployed educated person,’ said Shang-Jin Wei, a Columbia Business School economist…  Lu Mai, the secretary general of the elite, government-backed China Development Research Foundation, acknowledged in a speech this month that less than half of this year’s graduates had found jobs so far.” New York Times, June 16^th.

With staggering unemployment rates dragging down too many European nations, particularly the debtor nations, unemployment among the young – regardless of educational status – often rises to 40% or more of that demographic segment. Even in the United States, for those recent college grads lucky enough to find jobs, 55% of those are working at jobs that really do not require advanced education. Look at civil unrest in the Arab Spring and even at the new rise of rebellion in Turkey, and you will see that it is led by waves and waves of unemployed youth, many of them educated. New American social policies embraced by the rural-values-directed conservative political forces seem to foster an “every man for himself” (occasionally embracing women) philosophy without government safety nets, which contracts the spending that opens the door for new employment among the young, even as we massively cut the quality of the education available to all.

Has the planet elected to follow in this new and rather harsh direction, abandoning youth in favor of those older segments of society? Are we really forced to choose one or the other? Apparently, China’s leadership senses the danger of allowing a generation of disenfranchised youth to rise through society with bitterness and hopelessness: “China quadrupled the number of students enrolled in universities and colleges over the last decade. But its economy is still driven by manufacturing, with a preponderance of blue-collar jobs. Prime Minister Li Keqiang personally led the cabinet meeting, on May 16, that produced the directive for schools, government agencies and state-owned enterprises to hire more graduates, a strategy that has been used with increasing frequency in recent years to absorb jobless but educated youths.

“‘Any country with an expanding middle class and a rising number of unemployed graduates is in for trouble,’ said Gerard A. Postiglione, the director of the Wah Ching Center of Research on Education in China at Hong Kong University…  A national survey [in the PRC] released last winter found that in the age bracket of 21- to 25-year-olds, 16 percent of the men and women with college degrees were unemployed.” NY Times. Well, that cannot be relevant to the United States then, since the U.S. Census tells us that we don’t have a growing middle class… our middle is sinking and losing membership, a demographic trend never before experienced in American history.

With bad news echoing throughout the global stock markets from our own Federal Reserve, China’s banks seemed on the verge of precipitating a new credit crunch by not lending to each other. This has massive implications not just for the local Chinese job markets but for global economic stability. Stock markets around the world crashed and burned. “The interest rates that Chinese banks must pay to borrow money from each other overnight surged to a record high of 13.44 percent [on June 20^th], according to official daily rates set by the National Interbank Funding Center in Shanghai. That is up from 7.66 percent [just the day before] and less than 4 percent last month.” New York Times, June 19^th. Expect the government to step in and restore order. But if the next generation cannot secure meaningful employment, trust me, political heads will roll!

I’m Peter Dekom, and I remain amazed at how few lessons American politicians learn from either history or the world outside the United States.