Yi Zhang

Tiger, photographer and local government officials

by Yi Zhang on January 12, 2009

in Odds & Ends

From China Daily, a story about tiger, photographer and local government officials:

Recently, a photographer was sent to the jail because of a fake photo he provided last year. Southern tigers are widely believed to be extinct in the wild. Many experts believe it is the ancestor of all tigers. The photographer, Zhenglong Zhou claimed he photographed the endangered South China tiger with a digital camera on the afternoon of October 3, 2007. The Shan’xi Provincial Forestry Department rewarded him 20,000 Yuan ($2,915).

After he released those photos, some observers accused Zhou of making the images with digital software and the local government supporting Zhou just to bolster tourism. If the photo proved to be authentic, the local government stood to gain a 10-million-yuan fund from the Chinese government for their efforts in protecting endangered species. After a year-long investigation, police said the photo was fake and 13 local officials were punished for involvement in the scandal.

An important lesson to reflect on.  Governments world-over can encourage bad behavior through even the best of intentions.

China’s Economic “Boost”

by Yi Zhang on December 17, 2008

in International

Recently, the Chinese government released a plan to “boost” the Chinese money supply and stimulate the economy.

Unlike Americans, people in China actually save money. Most Chinese immediately deposit a large portion of their paycheck into the bank after they get paid.  This saving goes toward education, retirement, emergencies (when I lived there 3 years ago the insurance industry was highly underdeveloped), and simply a general feeling of security.

In fact, since ancient times, Chinese common wisdom has said the wisest way to get rich is by accumulating money (notice, this doesn’t say anything about investment, a very different thing).

Additionally, the Chinese credit card industry has had a hard time in the past.  Aversion to debt runs so deeply, that even Chinese students living in the US pay off their loans with surprising speed. A Chinese friend in the credit card industry told me “If all Americans used their credit cards the way the Chinese do, we couldn’t turn a profit!”

So, could the boost plan be effective? Maybe, but there are large cultural barriers working against this stimulus.

As written in my last blog post, there are lots of things that need to be done, like providing a better environment for private firms to develop.  Additionally, the government could privatize many state-owned assets, boosting the market while making it more open and transparent.

The boost plan is a good start, but the Chinese economy needs a more fundamental reform.

Forbes China’s 100 richest

by Yi Zhang on December 11, 2008 · 2 comments

in International

Each year, Forbes magazine produces a list of the 100 richest people in China. But no rich people would like to appear in it. Why? After several years, the people whose names appear in it would be sent to jail, almost unavoidably. It would likely become an index for the prosecutor to find out the people who didn’t pay their taxes, tried to bribe government officials or didn’t carry out other citizens’ obligations. Recently, Guangyu Huang, the richest person of 2004, disappeared and was sent to the jail.

Now, people are discussing what the Chinese government should do to recover from the financial crisis. As a country whose GDP is 40% export-based, China faces big challenges. To stimulate the economy, the Chinese government sent out a whole package for more than $586 billion to build railroads, airports and power grid and hope to play a bigger role to fight global financial crisis.

More needs to be done.

As Zhiwu Chen from Yale indicated, it’s a time for the Chinese government to “adopt fundamental reforms.” We can’t deny that the Chinese government has done a lot. 30 years ago, people could be sent to jail just for selling goods in competition with collective or state-owned firms.

But that’s not enough. Privatization reform is necessary to provide a good environment for small, private firms to grow. When the owner of a private firm becomes rich, they should be directed to carry out social responsibilities instead of being investigated and jailed.

An Old Joke

by Yi Zhang on December 9, 2008 · 1 comment

in International

But still a good and classic one.

In 1949, only Socialism could save China.
In 1979, only Capitalism could save China.
In 1989, only China could save Socialism.
In 2009, only China could save Capitalism.

China needs Capitalism and Capitalism, now, needs China too.