China Curbed Oligarchs, Made Education & Housing Cheaper for 90% — Meanwhile, In USA… – CleanTechnica

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I have a habit of picking up books on China as it’s the biggest country in the world that doesn’t tell everyone everything it’s doing all the time, unlike my southern neighbor, the United States. I’ve read books by Chinese authors, global diplomats, historians and youth influencers about the country. Recently I read a couple more, and the story they jointly tell is fascinating.

The books are The Split: Finding the Opportunities in China’s Economy in the New World Order and China’s World View: Demystifying China to Prevent Global Conflict. They have very similar themes, if different intents. I recommend them both, as I recommend Mahbubani’s Has China Won?, Yu Hua’s China in Ten Words, Dychtwald’s Young China, Jacques’ When China Rules the World, and Kissinger’s On China. The two most recent books however have a very clear value proposition in that they were written and published in the past couple of years. It’s very difficult to keep up with China from the outside and COVID changed quite a few things as well, so continual refreshing of knowledge and insights is required. Anyone basing their opinion on China from knowledge from 10 years ago or even five is out of date.

The Split is written by Shaun Rein, founder and managing director of the China Market Research Group, a participant in and regular commenter on China’s economy and business landscape. With over 25 years of experience in Shanghai, he advises Fortune 500 companies, private equity firms, and hedge funds on China strategy. In addition to the book in question, he wrote a previous book, The End of Cheap China. 

China’s World View, on the other hand, is written by David Daokui Li, a leading Chinese economist and the Mansfield Freeman Chair Professor at Tsinghua University’s School of Economics and Management, where he also directs the Academic Center for Chinese Economic Practice and Thinking. A Harvard Ph.D. graduate, Li has served on the Monetary Policy Committee of the People’s Bank of China and advised the International Monetary Fund. He’s frequently delivered guidance to China’s top leaders. His research focuses on economic development and China’s economic policies.

The intent of The Split is to help westerners understand that China is still open for business, that business conditions have changed somewhat, and how to look at different opportunities in the country in today’s economic and geopolitical climate. The intent of China’s World View is quite different, with Li focused on explaining how China’s political system actually works in straightforward language and what its priorities are. Rein is focused on business people and making profits, while Li is focused on helping western policy and opinion makers understand China and hence see it as an ally not a threat. While Rein is focused on what he explicity refers to as the split, Li is focused on articulating why there is no split. Remarkably for the different focuses, a few things came out clearly from both books.

The narrative in the west regarding China in the 2020s is not remotely aligned with the reality of China. This isn’t surprising as the USA spends hundreds of millions to attack China’s Belt & Road Initiative and other policies, in large part because the US political system needs external communists to attack, despite China not being a communist country any more. The USA and the UK have strong alignment on this, and their very influential media have been aligned on this for decades, so it’s a well-worn rut, one that leads away from reality.

A key priority of Xi Xingping and the Chinese government over the past 13 years has been enabling the economic rise of the 90%. Preceding decades, while extraordinary at bringing hundreds of millions out of poverty, had created a class of very wealthy people and significant income inequality. Further, the east coast was wealthy while the interior was poor. Everyone was better off but the 10% were radically and visibly better off than the 90%, a well understood challenge in governance that’s led to collapses in country after country globally. This was a mandate of heaven issue for the government of China.

That mandate is how they refer to the will of the people in the country. All rulers govern at the will of their people, and how it’s expressed varies considerably. The Chinese system means that historical emperors and current General Secretaries and the Politburo rule according to the governance system unless they make so many citizens actively angry about conditions that the government has to be replaced. The unevenly enforced and hanging on too long COVID restrictions were a mandate of heaven issue as well.

To the end of poverty concerns, the government has done a few things for the middle class. A big one is banning outside-of-schools prep courses for exams for children. The history of China is one in which the national exams were a key filter for finding the best scholars to take top positions in government. Now it’s a filter for getting into the top universities, a key requirement for a great deal of governmental and non-governmental employment. Private exam preparation organizations were charging high rates to prepare students to get the best possible results on exams, and the people that could afford that were the 10%, not the 90%. Parents were spending their life savings and going into debt to pay for this private and parallel education system, and children were often studying to midnight.

Banning the exam preparation tutoring companies meant a lot of unhappy investors and educational company executives, but it’s leveled the playing field for the 90%, enabling them to balance their budgets and have hopes that their children can thrive.

Another file where there was and is a significant affordability crisis is housing. The country has a history of people getting very rich off of real estate speculation since the 1980s. Subsequently, in the big and affluent cities in the east, there are now restrictions of ownership of apartments. Chinese families can only buy two condos. Foreign residents have to live in a Chinese city and pay taxes for five years before they are able to buy a single condo. Speculation on residential properties is mostly wiped out in the more affluent cities. That said, there’s still a lot of speculation in the west of the country, where real estate remains more affordable and those constraints have not been applied.

To assist China’s workers, the country’s labor policies have evolved to balance economic growth with social equity, focusing on worker protections and job stability. The 2008 Labor Contract Law, amended in 2013, strengthened employee rights by mandating formal contracts and regulating labor dispatch practices. To address unemployment, the government has implemented insurance schemes, vocational training, and reemployment programs. In response to an aging population, China plans to gradually raise the retirement age starting in 2025, aiming to ensure the sustainability of pension funds. These are all policies aimed at the 90%.

And then there’s healthcare. China’s reforms in recent years have focused on expanding access, improving quality, and reducing costs. Key initiatives include the expansion of the public health insurance system, which now covers over 95% of the population, and efforts to reduce out-of-pocket expenses for medical services. The government has introduced price controls on essential drugs, promoted the development of private healthcare facilities, and invested in digital health technologies to enhance service efficiency. Additionally, reforms have aimed to address regional disparities by improving healthcare infrastructure in smaller cities and rural areas.

The visible 10% has at the same time been curtailed through two policies. The first is a corruption crackdown. Since taking power in 2012, Chinese President Xi Jinping has made anti-corruption a cornerstone of his leadership, launching a sweeping campaign targeting both high-ranking officials, known as tigers, and lower-level bureaucrats, or flies. The crackdown has led to the investigation and punishment of numerous senior officials, including military leaders, with recent cases such as the suspension of Central Military Commission member Miao Hua for alleged misconduct. Xi’s approach blends strict discipline with policies encouraging leniency for honest mistakes, aiming to restore confidence among officials while maintaining control. It’s worth noting that critics, mostly western, argue the campaign serves as a tool to eliminate political rivals and consolidate power.

Second has been a clear anti-monopoly drive that dethroned an oligarch. China’s regulatory crackdown on digital retail monopolies has led to significant changes for major players like Alibaba and JD.com. In December 2023, the Beijing High People’s Court ruled against Alibaba, ordering it to pay 1 billion yuan ($140 million) in damages to JD.com for engaging in monopolistic practices, specifically its “choose one out of two” policy, which forced merchants to sell exclusively on its platforms. This follows a record 18 billion yuan fine imposed on Alibaba in 2021 for similar anti-competitive behavior. As part of broader reforms, Alibaba has begun integrating Tencent’s WeChat Pay into its platforms, signaling an end to the walled gardens that previously restricted competition in China’s digital economy. These actions highlight China’s commitment to fostering a fairer market and curbing the influence of its tech giants in the e-commerce sector, and indeed the online tech sector has flourished without the monopolistic stranglehold of the two majors.

Jack Ma stepped down as Alibaba’s executive chairman in 2019 but remains a significant figure in China’s tech industry. His outspoken remarks on financial regulation led to increased government scrutiny, including the suspension of Ant Group’s IPO in 2020 and the broader crackdown on China’s tech sector. That’s often been characterized in the west in a very negative way, but through an economic lens is clearly the government cracking down on monopolies to provide greater profits for manufacturers selling online and more choice of channels. In China, online media and retail giants don’t tell the government what to do, but are merely among the long list of representatives to a 2,300 member group which is consulted on governmental policy and legislation in its development.

Addressing China’s lower economic development in the west has been an ongoing effort. China’s economic development strategy for its western provinces began before Xi Jinping’s leadership with the launch of the Western Development Strategy in 1999. This initiative aimed to bridge the economic gap between the underdeveloped western regions and the prosperous east through infrastructure investments, such as highways and railways, and the creation of economic zones like the West Triangle Economic Zone. Efforts were focused on urbanization and improving local economies by attracting investments and alleviating poverty.

Under Xi, the focus has expanded with significant investments in logistics infrastructure, including the development of international aviation hubs in cities like Chengdu, Chongqing, and Urumqi. Xi’s policies emphasize sustainable development through clean energy projects and environmental protection measures. Despite these efforts, economic disparities persist, and the success of Xi’s initiatives will depend on sustained investment and policy effectiveness.

What these policies have meant for Xi however is that the people across the country are very happy with him. They are no longer subject to regular demands for bribes, can start businesses without kickbacks, aren’t paying through the nose for private schooling for their children, can afford more housing, have healthcare, have employment protection, are seeing increased income equity and aren’t having their noses rubbed in the lifestyles of the rich and powerful to the same extent.

To the point of the environmental protection measures, they are in the top five priorities for the country. China’s 14th Five-Year Plan (2021–2025) places a strong emphasis on green development, prioritizing the transition to a low-carbon economy, improving energy efficiency, and addressing ecological challenges to combat climate change. Alongside environmental sustainability, the plan focuses on innovation-driven development, aiming to achieve technological self-reliance and strengthen the country’s science and technology capabilities. Economic modernization is another key priority, with efforts to advance industrial systems, boost strategic emerging industries, and enhance economic resilience. The government is also pursuing a “dual circulation” strategy, seeking to stimulate domestic consumption while integrating with global markets to ensure economic stability. Additionally, the plan underscores rural revitalization and urbanization, aiming to reduce the urban-rural divide and promote balanced regional growth.

As an example of that, Beijing is encircled by six ring roads, ranging from the 2nd to the 7th, with the 1st Ring Road existing only in concept. The 2nd Ring Road, built in the 1980s, follows the path of the old city wall, while the outer ring roads were developed progressively to accommodate the city’s rapid expansion. In recent years, Beijing has undertaken extensive afforestation efforts to create green belts around these roads, aimed at improving air quality and providing recreational spaces. Outside the 6th Ring Road, new forest belts are at least 1,000 meters wide, while those inside the 6th Ring Road exceed 500 meters. Additionally, green corridors along major roads, railways, and rivers are more than 200 meters wide, forming a comprehensive network of urban greenery to enhance the city’s environmental sustainability.

China’s afforestation efforts have dramatically expanded forested areas over the past few decades, with significant progress made both before and during Xi Jinping’s leadership. Prior to Xi’s tenure, initiatives such as the Three-North Shelterbelt Forest Program, launched in 1978, aimed to combat desertification by planting vast forest belts across northern China. By 2024, this program had contributed to a forest coverage increase from 8.6% in 1949 to over 24%, adding approximately 32 million hectares of forest.

Under Xi, afforestation efforts have intensified, with more than 22 million hectares added in the past decade alone. As of 2023, China’s total forest area reached approximately 220 million hectares—an expanse bigger than all of Indonesia and 3.4 times the size of France—accounting for about 5.4% of the world’s total forest cover. These large-scale afforestation projects, which now emphasize quality over quantity, reflect China’s commitment to improving air quality, combating desertification, and enhancing biodiversity.

As part of these policies, China has significantly expanded its renewable energy sector, both domestically and through exports. In 2024, the country’s installed solar power capacity surged by 45.2%, reaching 890 million kilowatts, while wind power capacity increased by 18%, totaling 520 million kilowatts. This growth contributed to a total installed power generation capacity of 3.35 billion kilowatts, marking a 14.6% year-on-year increase. On the export front, China shipped 114 gigawatts of solar panels worldwide in the first half of 2023, a 34% increase from the same period in the previous year. Notably, 58% of these exports were destined for Europe, while major non-Western markets, including India, Brazil, and Southeast Asian nations, have also emerged as key recipients of Chinese wind and solar technologies.

China’s electric vehicle industry has seen rapid expansion both domestically and internationally. Domestically, EV sales continue to surge, with 50% of sales expected to have plugs in 2025, ten years ahead of plan. Government incentives, extensive charging infrastructure, and advancements in battery technology have driven widespread adoption across major cities. On the export front, Chinese automakers such as BYD and SAIC have significantly increased their presence in key markets, including Europe, Southeast Asia, and Latin America.

Of course, China was an early signatory of the Paris Agreement, signing the accord on April 22, 2016, during the opening ceremony at the United Nations Headquarters in New York. The country formally ratified the agreement on September 3, 2016, ahead of the G20 summit in Hangzhou, in a joint announcement with the United States. As the world’s largest emitter of greenhouse gases, China’s early commitment was seen as a crucial step in global climate efforts. Since then, the country has set ambitious climate targets, including reaching peak carbon emissions before 2030 and achieving carbon neutrality by 2060. It’s remained in the Paris Agreement since, and has being hitting targets for renewables and EV sales six to ten years ahead of plan.

The books deal with some sensitive issues. Rein leans into the question of China using slave labor and cultural genocide against a Muslim minority. Xinjiang is home to the majority of China’s Uyghur ethnic minority, a Turkic-speaking, predominantly Muslim group. He’s traveled to the region multiple times with and without anyone accompanying him, and his book is rife with the stories of Uyghurs who own businesses, make money and live freely, Uyghurs who happily talked with him. He’s worked hard to get to the bottom of western narratives from people like Adrian Zenz, a commonly cited figure in western media, and found that they were baseless. No concentration camps to be found.

When I looked into Zenz I didn’t find a remotely credible narrator. He is a fundamentalist Christian whose primary employment has been with strictly anti-communist think tanks and hasn’t been to China in decades despite claims to being fluent in Chinese. China’s efforts to ensure no religion is damaging to the people or the government is galling to conservative western Christians, and Zenz is no different. When approached by the BBC to provide evidence on the treatment of Uyghurs, Zenz first declined, saying that there was no way he could do so. Then they offered him a lot of money and remarkably he found a lot of evidence. These are his words on Xitter, by the way. Rein has traveled through Xinjiang, and wasn’t alone. Indonesia, a majority Muslim state sent an investigative team in 2019 and officially was fine with what they saw, although there were reports of Chinese control of the itinerary and some changes prior to the team’s arrival.

On another topic that received some western attention, Li spoke about term and age limits for politicians. Term limits for senior Chinese officials were introduced in 1982 as part of a series of constitutional reforms aimed at preventing a return to the era of lifelong rule and political turmoil seen under Mao Zedong. Following Mao’s death in 1976 and the chaotic years of the Cultural Revolution, Deng Xiaoping led efforts to modernize China’s political system by institutionalizing leadership succession and curbing the concentration of power. The 1982 Constitution established a two-term, five-year limit for the positions of President, Vice President, and Premier, ensuring a maximum of ten years in office. These limits were designed to promote political stability, encourage generational leadership renewal, and avoid the risks of authoritarian rule. The reforms contributed to a more predictable governance structure, with leaders such as Jiang Zemin and Hu Jintao stepping down after their two-term tenures.

However, in 2018, the National People’s Congress approved a constitutional amendment removing the presidential term limit, paving the way for Xi Jinping to remain in power indefinitely, signaling a departure from the leadership norms established under Deng’s reforms. Being a close observer of China, this is the only place where I saw any self or other censorship on Li’s part in China’s World View. While he wrote openly about the consensus that the worst excesses of Mao’s leadership might have been avoided if he’d retired earlier, he was silent on Xi’s rollback of the term limits on his own role. As a note, I looked into western term limits and found remarkably few examples of them, along with quite a few gerontocracies.

However, Li’s discussions of governance make it clear that China has its own checks and balances, and further that they are effective. The governance model isn’t the same as the western model, nor is the culture the same, but there is nonetheless widespread consultation with experts and citizens up and down the socioeconomic scale in the creation of their policies and legislation. When policies and legislation prove to be problematic, they adjust them. There are mechanisms for removing leaders.

So this is the net of the two books. China is open for business, but the opportunities have changed. The horrors of modern China include more affordable housing, education and healthcare. Workers have more rights. The country is greening rapidly and selling necessary cleantech products globally. Rich oligarchs have been prevented from taking over the government and their monopolies broken up. Much of the narratives of western media regarding China don’t stand up to scrutiny.

I’ll leave it to the reader to consider how this contrasts with the United States, which just transitioned power away from a government focused on the middle class, a thriving domestic economy, reducing inequity and environmental action. Further, a country in which prisoners were shipped to Los Angeles to fight climate-change exacerbated and dangerous wildfires for $10 per day, something legal under the 13th Amendment.