A quick skim through the numbers illustrates what China claims to have accomplished. According to a BBC report, China had nearly 90 million below the poverty line in 2012, but that number was reduced to 7.2 million in 2016. President Xi’s ambitious goal of lifting 100 million people out of poverty when he assumed office in 2012, though slightly exaggerated, is in line with this sharp decline. Since 1990, China alone is responsible for eliminating more than 700 million out of poverty in 30 years, which accounts for over 60% of the global poverty population. 

The numbers sound convincing. However, as China Global Television Network (CGTN), the Chinese Communist Party’s state-owned international media network, stated in the article: “China’s fighting poverty, so why are the media so skeptical?,” the online debate surrounding China’s poverty fight is just as heated as its award ceremony.

One major critique states that China intentionally set the poverty bar too low. Critics argue that China’s adoption of the $2.30 per day threshold, which the Chinese government argues to be a modified version of the 2011 United Nations poverty line of $1.90 per day tailored to its current economic growth, is vastly outdated. China has been among the world’s fastest-growing economies and, according to the World Bank’s widely quoted phrase, is “the fastest sustained expansion by a major economy in history.” It should then adopt the $5.50 upper-middle-income poverty line for its data to be comparable. By intentionally adopting a poverty line that does not reflect the nation’s current status, according to international analysts, China is essentially politicizing poverty to use it as a propaganda mechanism.

The income gap, another point-of-attack by critics, complicates the situation further. This significant income gap, though slowly improving over the years, is partially because of China’s rapidly developing economy. While actors buy hundreds of millions of dollars worth of luxury air villa mansions, farmers can be found living in leaking houses made of “rain-weakened mud-brick walls” and muddy roof timbers before governmental relocations. Many argue that this artificial eradication of extreme poverty only means barely lifting them over the line. In a way, however, this explains the $2.30 poverty line. While individuals by no means can live on that amount in large cities like Shanghai, Beijing, or Guangdong, people in rural areas can start their own businesses through piggybacking on increased income, government loans and improved infrastructure.

There are many other criticisms related to these claims, such as arguments on how Chinese bureaucrats lie about data just to fulfill their goals, on how the central government essentially tosses out loans and grants, and on China’s inefficiency and unsustainability in the allocation of resources. However, what is more important is not what China announced to the world, but how and when China did it. These intentional choices gradually reveal how China is working to improve its reputation in the international arena and its ambitions of standing its own ground as equals to the United States.

China framed poverty alleviation to be a group effort under Chinese Community Party (CCP) tactics. Although government strategies are comprehensive and encompassing, China would not have been able to achieve this goal if not for team work. It focuses on the marriage of individual efforts of rural villagers who are experiencing poverty and urban cadres who are sent on the mission to alleviate that poverty. This internal cooperation between coastal Eastern China and sandy Western China is highlighted by mainstream CCP rhetoric, which states that poverty reduction follows the ancient proverb of “teach a man to fish and you feed him for a lifetime.” (授人以鱼不如授人以渔) Reports steer any attention on specific poverty alleviation tactics to the government’s focus on regionally-tailored business and the proliferation of e-commerce, and to selfless donations by major corporations to fund basic infrastructure and education. The spirit of collectivity and collaboration is bolded and underlined.

The time of announcement is also no coincidence as the government was particular in building up a major mass media presence. Min’Ning Town, a TV series from the new mandated genre of fupinjv (poverty alleviation dramas), finished on-set shooting on October 25, 2020. It tells the real-life story of villagers from Ningxia, Gansu, which is historically one of the poorest Chinese provinces, who migrated and built a prosperous Minning Town from scratch in the 1990s. As China declared victory on November 23, the series was forced to rush its post-production to meet the deadline. First aired on January 12, on major broadcasting channels in mainland China, the series concluded itself precisely a month before the national commencement meeting. The series proved an unlikely hit with viewers, domestic and international alike, as it did not sugar-coat challenges along the way of poverty alleviation. This rough timeline for just one TV series is evident for China’s efforts in trying to prequel its official announcement and awarding ceremony and to shape its poverty reduction methods through TV series and mass media.

The framing and timing of this announcement delivers a message beyond China’s success in alleviating poverty; it is trying to offer an alternative to the U.S. hegemony. This argument is delivered in two folds.

China seeks to frame itself as collective and united while the United States becomes increasingly polarized. China’s mainstream rhetoric is juxtaposed with U.S. domestic issues. Ranging from the surge in hate crimes against Asian Americans, to increasing political polarization, to civil uproars demanding justice for victims of police violence, recent news marks a nation that is deeply divided. Therefore, China is deliberately trying to strike a contrast between its internal cooperation and the United States’ domestic problems by framing this success in alleviating poverty as the people’s group effort.

China’s ability to hold massive in-person gatherings is also indirectly mocking the U.S. incompetency in managing the pandemic. When the rest of the world is still struggling through the pandemic, China, hit first and hard by COVID, is able to solve the poverty crisis that has troubled the world for decades.

The World Bank concludes that “[they’re] pretty sure China’s eradication of absolute poverty in rural areas has been successful,” and, even as a first step, China has shown the world how serious it is when dealing with collective welfare of the country. But, undeniably, the alleviation of poverty is politicized and turned into a major propaganda campaign aimed directly at the U.S. political hegemony. It should come as no surprise that it is then perceived as a threat by the U.S. government since its economy is barely, if at all, recovering from the COVID hit.

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Japan was once an economic powerhouse. Japanese companies were purchasing assets globally at an astronomical rate. In 1989, the Nikkei Stock Average culminated at a record of almost $40,000. This booming economy was met with turmoil as Japan’s asset bubble maxed out, resulting in disastrously low property prices. A significant amount of work migrated abroad to escape Japan’s economic downturn. The 1990s became a dark time for eager graduates awaiting a coveted position at major companies. To cut costs and protect older workers, companies offered a scant amount of jobs, shutting recent graduates out of the workforce. The labor market entered an employment “ice age.” To this day, those shut out of Japan’s job market in the 1990s are still struggling. They make up what is known as the “Lost Generation”. 

The Lost Generation began as a large population of hikikomori, a Japanese term used to describe adolescents who withdraw from society and confine themselves to their bedrooms. Failure to find employment resulted in ⅓ of the now 40-year-old population becoming shut-ins, or hikikomori. Today, there are around 613,000 hikikomori, according to a government survey in March 2019. The Lost Generation also presents the “8050s Problem”, which entails middle-aged, reclusive and unemployed Japanese still dependent on their elderly parents for housing and financial assistance. Social worker Reiko Katsube identified the 8050s Problem and strives to cultivate connections among this community through the Toyonoka Council of Social Welfare. Katsube recognizes that shut-ins deserve acceptance and a place within society. Katsube began reaching out to this community after the 1995 Kobe earthquake that left hundreds of thousands of people displaced. “Since the quake, we have been striving to nurture connections in the community to prevent lonely deaths,” Katsube says. Hikikomori have endured societal isolation and a discouraging labor market for far too long. Unfortunately, the Covid-19 pandemic has exacerbated these issues. 

Prior to the pandemic, the Japanese government realized the Lost Generation was in dire need of assistance after a May 2019 knife attack. A middle-aged man who had been without a job and living with his parents committed this brutal attack, killing two, injuring 18 others and subsequently stabbing himself to death. Japanese media alluded that this man had been suffering from the 8050s Problem, indicating that shut-ins may be a “ticking time bomb.”

The 1990’s employment ice age had extended into multiple decades and its consequences prompted the government to finally take action. Former Prime Minister Shinzo Abe’s government announced plans to create over 300,000 jobs within three years. 

Government action, however, is untimely. Experts predict that another major employment ice age will occur due to the pandemic. 2020’s April to June quarter indicated a 28% dip in the Japanese economy – the most drastic during the postwar period. According to Recruit Works Institute’s statistics, the class of 2021’s ratio of jobs per graduate will drop from 1.83 to 1.53. In an employment system characterized by the saying, “The doors only open once,” graduates may face a futile job market. Japan’s Chamber of Commerce reports that 78% of small to midsize businesses will cut back the number of new hires because of the pandemic. How will the Japanese government save its Lost Generation while preventing another one? 

Government intervention should include not only job creation but also psychological assistance. The government largely ignored psychological disorders until 2004, when a law was passed to support those with developmental disabilities. Many shut-ins struggle with hypersensitivity, compulsive tendencies, and lack of social awareness. If the government had addressed these disabilities earlier on, then the 8050s Problem would not be as pervasive today. Many elderly parents of these middle-aged shut-ins regret treating their children terribly because they were unaware of the psychological inflictions from long-term unemployment. Japan’s social welfare system must pursue efforts towards creating communities for shut-ins to share their experiences and network for employment opportunities, even if the pandemic limits connection to an online platform.  

Approximately 1 million Japanese in their mid-30s to mid-40s are experiencing long-term unemployment. Boosting incomes while meeting the domestic demand for labor requires significant cooperation among local and national governments and companies. Former Prime Minister Abe’s cabinet expressed willingness to use flexible macroeconomic policies, hoping to raise the minimum wage to 1,000  ¥ ($9.20) and create over 300,000 jobs. However, these measures entail real sacrifices. Securing economic stimulus funds requires serious social security reforms, including increasing revenue from wealthier older people and raising the age to receive public pension from 65 to 70yearsold. The new Prime Minister Yoshihide Suga is fairly popular among Japanese citizens. In a recent interview with Japan Forward, Abe describes Suga as a “results-oriented politician” who will continue the policies of the previous administration. 

Thousands of people apply for a national public service job, knowing that it provides a steady income. Not just any unemployed Japanese person can be granted a government-created job. To be hired as national public servants, the “ice age” generation must first pass government exams. Those who pass the exam must then undergo interviews. Out of the most recent 5,634 applicants who took the exam, only 157 will be offered a position, signifying a competition rate of 35.9 applicants to one job. This system seems much more cutthroat than the 1990s post-graduate job search, which may not resolve the problem. 

Japan’s ambitious plans for economic revival may flounder given the current circumstances. Emphasis on a flexible macroeconomic policy has entrenched Japan in a debt-to-GDP ratio of 200%. Experts worry that government safety nets will hinder structural reforms from advancing economic development, causing companies to lose profit in the long-term. In order to escape and prevent another employment ice age, Japan must shift its focus to reducing trade barriers, attracting more foreign direct investment, and expanding the labor market. 

As the workforce dwindles due to the aging population, the Lost Generation deserves a second chance to establish a career for themselves and repair Japan’s stagnant economy. 

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Japan has the only constitution in the world that denounces the use of or threat of force in all cases but self-defense in its own territory. The provision that outlines this, Article 9, has caused controversy since the American occupational government included it in the postwar constitution. On July 1, 2014, current Prime Minister Shinzo Abe decided to break from the traditionally strict interpretation of this provision and declare that Article 9 did allow for collective self-defense. This marks a shift in the Japanese constitutional narrative that has spurred endless controversy amongst neighbors and global onlookers alike.

Although many have interpreted this move as militarism, this shift is a far cry from the nationalist resurgence of expansionist Japan. Abe is not a sudden war hawk rising up to match a growing China; nor is he a pawn of the United States. Rather, Abe is the heir of a post-war ruling elite who used Article 9 for their own convenience in maneuvering Japan’s stance in international politics. Article 9 is no longer convenient – and so Abe changed it.

Article 9’s Roots in the Cold War

Article 9 can only be understood in the context of the era that conceived it. The United States’ occupational government under General McCarthy wrote Article 9 to strip its former enemy of military capability in 1947 in order to prevent any future belligerence in the region. After fierce domestic debate, the Japanese government accepted. Then, in 1950, the Korean War started.

Fearing the domino effect would spread communism throughout the region and expand the Soviet sphere, the US sent Ambassador John Foster Dulles to Japan in 1950 to ask the Japanese government to amend their constitution to eliminate Article 9. Yoshida Shigeru, the prime minister at the time and a former member of the Imperial foreign ministry, refused. He knew that remilitarizing would cripple the still devastated Japanese economy. Favoring development over militarism, he used Japan’s supposed new pacifist identity to dissuade American pressures to remilitarize. Dulles went back to Washington empty handed while Japan reaped the benefits of procurement orders from the war in Korea. Using the Japanese people as a shield, Article 9 was thereafter a convenient bargaining chip to resist pressure to join the United States’ wars in the Pacific.

 A New International Context

The original rationale to maintain Article 9 was its convenience in preventing costly remilitarization and helping Japan to a path of economic development. In 2014, those conveniences no longer applied: Japan had been economically stagnant for over two decades, and the costs of militarizing would not cripple its economy. On the contrary, a strict interpretation of Article 9 under the current state of affairs in East Asia posed a threat to the US-Japanese alliance.

Under strict interpretation, if a US vessel was attacked in Japanese waters, the Japanese Self Defense Force (SDF) would have to stand by and watch their ally sink. This would create an extremely complicated situation for Japan, at best resulting in damaged US-Japan relations and at worst, the termination of the security alliance. Some segments of the US political elite already resent what they see as a one-sided alliance. An incident of this nature would be disastrous for Japan. The likelihood of an accidental clash has been rising in recent years with the numerous territorial disputes in the region and the increased presence of Chinese marine vessels in the waters around Japan. In the eyes of Abe, Article 9 is becoming less convenient and more of a risk to Japan’s national interests.

At the same time, the new interpretation is in no way a return to militarist Japan. Its roots are less “national” and more “practical”. The actual wording of the new interpretation and the laws implementing it are too limited to even pretend to be expansionist. The phrasing allows for Japan to act in collective self-defense only in places of strategic importance to Japan’s national interest. It also must be acting on behalf of a country with whom Japan as a long-standing close relationship. Currently the only country that qualifies is the United States. This strict wording is again a matter of convenience. Japan can use it to refuse to participate in wars in the Middle East or even to refuse to come to the rescue of countries in the Pacific. While there are segments of the Japanese conservatives that would prefer a more active role in global military operations, they face strong opposition by most of the population and government. Members of the opposition party in the Diet are fighting hard to enact legislation that severely limits the SDF’s ability to be deployed abroad.

Because the discussion of reinterpretation was framed around risks posed by North Korea and China, many outside of Japan see the interpretation as a sign of the rise of nationalism. Abe’s government is painted as wanting to return to the glories of a militarily strong Japan, fueling nationalism to achieve their goals. While there is a correlation between this shift in security policy and the increased tensions in the region, framing the reinterpretation of Article 9 as purely a nationalist move ignores its long history. The reinterpretation is lauded by nationalists and brought about by a conservative government. But nationalism is not a cause of the reinterpretation; it is not the primary reason Abe’s government pursued a new policy. Moreover, were it the primary reason, opposition in the government and the populace would have been much stronger and defeated it altogether.

Misunderstanding the context of Article 9 and its place in Japanese political history, many commentators have read Abe’s rhetoric and decried it as a nationalist resurgence in reaction to China. This is an ahistorical understanding that only drives the fearful reactions of Japan’s regional neighbors. Article 9’s reinterpretation must be understood in context. Abe is doing as Shigeru did: using Article 9 for Japan’s convenience in the midst of a shifting international order.

The views expressed by the author do not necessarily reflect those of the Glimpse from the Globe staff, editors or governors.

AUTHOR BIO:

Kayla Foster is a current senior at USC pursuing a double major in International Relations and East Asian Languages and Cultures. Her focus of study is American foreign policy, politics of the Pacific Rim, and Japanese security policy. Kayla spent one year studying abroad at Sophia University in Tokyo where she took classes on Japanese society and Northeast Asian security. She has working proficiency in Japanese as well as conversational ability in Spanish and Korean. In the past she has spent six weeks in Washington, D.C. researching how policy makers address the issue of nonproliferation of weapons of mass destruction, which culminated in a team policy brief on North Korea’s nuclear IBM capabilities. She also spent a month at Ewha Womans University in Seoul studying the transitions in South Korean society.

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Recently, the Huffington Post released a widely popular three minute compilation video of Donald Trump repeating the word China with varying degrees of contempt. As apparent in the video, candidate Trump has made attacking China a major plank in his platform, blaming them for America’s economic woes. Pointing fingers at China is not new; the American political right and left have strongly criticized China’s trade policy for many years. Constant bashing of China, especially by influential media figures, has created a dominant discourse that portrays the issue in black and white: Beijing is deliberately using policies like currency manipulation to grow their economy at the expense of other countries. This view is difficult to argue with in light of recent evidence after China, on August 13-15, devalued their currency by 3% against the dollar—the biggest change in value since 1994.  

Intuitively it might seem that the devaluation of the yuan is negative for the United States. In principle, a weaker currency makes exports cheaper and more competitive, attracting export businesses to China. This economic principle is used to explain why the US lost 3.2 million jobs to China between 2001 and 2013, 2.4 million of which were manufacturing jobs. This job loss has led to a strong negative perception in the US regarding China’s economic growth. In a Gallup poll, 40% of respondents thought that China’s rising economic power was a critical threat to the vital interests of the US, and 44% of them indicated it was an important one. However this time, Beijing’s move to depreciate its currency may actually be positive for both countries.

Firstly, it is important to understand that the weak yuan (with respect to the dollar) has hardly been a determining factor when it comes to the US’s trade deficit and job loss. While America has certainly lost several million jobs to China in the past 10 years, the vast majority has been a result of high wages and the high cost of manufacturing in the US. In fact, many jobs have gone to other developing countries such as Mexico, South Korea (800,000 and 70,000 jobs respectively) and India (65% of all offshored IT work). Additionally, the term “losing jobs” is a misnomer, as China’s rapid economic growth has dramatically increased the job market all across the globe, especially in the resource extraction industry and manufacturing of parts that have final assembly in China: a positive-sum game. The United States’ consumer culture, high budget deficit (which, according to the twin deficits hypothesis, can cause a trade deficit) and movement away from relatively low-paying blue-collar jobs have also played a major role in this labor market transformation.

Statistically speaking, the only time Beijing’s currency manipulation was so severe that it significantly reduced the competitiveness of American exports (by making Chinese products much cheaper) was between the years of 2007 and 2009, when the currency was 20-40% undervalued against the dollar. China had good reason to keep their currency artificially low because of the global financial crisis and its negative effects on their export industries. Because of the currency devaluation, their economy stabilized, helping the global economic recovery. However, outside of the economic crisis, Beijing has been careful not to be too anti-competitive, and has allowed the yuan to slowly appreciate against the dollar. Moreover, a high rate of inflation (especially wage inflation) associated with China’s fast economic growth boosts prices and diminishes their currency advantage.

Secondly, the rapid deceleration of the Chinese economy poses a serious threat to both the global and US one—the devaluation of the yuan can help temper this deceleration. China has been growing comfortably at an unbelievably consistent annual growth rate of 10% of GDP for more than a decade, but now is growing at less than 7% with projections for 6% next year. While 7% and 6% economic growth is a desired figure for most economies, China has been growing at much higher levels for a quarter century, and 7% has long been seen as the minimum growth rate needed for social, economic and political stability in a country that still has tens of millions of poor peasants.

Though generally a fast growth rate must reach more sustainable levels in the long-term to prevent a bubble from developing, the current rate of deceleration is too rapid for the world to properly adjust without harm. China has the second largest economy in the world ($10.36 trillion) and is a reliable driver of the global economy; their sudden decrease from a previously consistent 10%-plus economic growth has lowered commodity prices, decreased demand for American and European exports (total imports decreased by 17% in May), and could drag the already relatively anemic world economy into further economic doldrums. The recent currency devaluation serves as a stimulus to their sagging export sector, which faced a whopping 8% decline in July. The devaluation helps reverse their slowdown, or at least tempers the deceleration to the benefit of US exporters and global economic stability: both major US economic priorities.

Finally, the yuan devaluation generally marks a major positive change in Chinese policy. America’s biggest criticism of the Chinese government is its strong hand in the value of the currency and stifling of market forces. However, China’s economy has matured to a certain extent and accordingly, the Chinese Central Bank (CCB) is moving to let the yuan be more receptive to the international market. Due to their slowdown, there has been some capital flight, meaning that money and investment is leaving the country. The immensely volatile stock market signals this. With the downward pressure depreciating the yuan, the CCB satisfied market pressure through devaluation and have promised to let market forces have more power. With that said, the yuan is not completely free floating—the CCB has stated that they still reserve the right to intervene to stabilize the currency. This is an important assurance in order to prevent a massive free fall in the yuan’s value due to the current market volatility. Given their need for stability, they will likely stick to their promise for slow and steady liberalization of their currency market rather than breaking the promise recklessly, which would only create more confusion and distrust.

China’s currency manipulation is a convenient scapegoat for America’s shrinking manufacturing sector and large trade deficit. But even if China had a completely floating currency, jobs would still have left, and China would still have a skyrocketing economy (albeit with more unstable growth). While their recent devaluation may draw ire from Donald Trump and others, it may actually be a gift in disguise, by bringing stability to the weakening Chinese economy in the short-term and bringing the currency closer to the market value in the long-term.

The views expressed by the author do not necessarily reflect those of the Glimpse from the Globe staff, editors, or governors.

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