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Reform death diaspora: Will students leave China?

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Reform death diaspora: Will students leave China?


Small flags of the United States, fashionable hats and warm sweaters during the chilliest time of year remind you of one country: China. Without a doubt, China is now the second largest economy on the world, whose development encourages millions of students to fly across the Pacific Ocean.

The “Reform and Opening-up Policy” goes back to the 1970s and has contributed to China’s rapid economic growth. However, the reform is now dead, and so is the period of this growth. The young generation in China is turning its back on the home country and would like to discover a new continent.

The death began in 2013.

Since this administration was established, political centralization and strikes on free markets have been ruining China’s economy. No more term limits office, political party’s unconstrained control over financial markets and ongoing U.S. and China trade conflicts. All these facts lead to a brutal conclusion: an inevitable economic recession of China.

Here are some more astonishing data: estimated GDP growth rate at 6.5 percent in 2018, estimated real unemployment rate at 22.9 percent and a huge decline on personal income. The new tax reform policy conducted in 2018 aims to increase corporate taxes to compensate scarcity of individual taxes after the government lowers individual tax rates and raises corporate tax rates.

But what is the point of lowering taxes on personal income when companies have to fire people due to higher tax rates, resulting in no income for the workers?

Putting tax reform aside, we should have more concerns on whether the economic reform will go on. In 1978, the “Reform and Opening-up Policy” was first proposed, which opened domestic markets to the rest of the world, while also bringing technology and capital to China.In 30 years until 2008, the annual GDP growth rate of China has been no less than 10 percent on average, which is considered a miracle.

This miracle depends on continuous reforms. Unfortunately, President Xi Jinping claimed last week no more reform will be needed.

On the conference celebrating the 40th anniversary of the “Reform and Opening-up Policy” last week, the president made himself clear the most important work for the country in next few years is to strengthen and improve the leadership of the Communist Party. “Every step of reform and opening up is not easy. In future, we will be inevitably faced with all sorts of risks and challenges, and even unimaginable tempestuous storms,” Xi said, stressing the importance of the ruling order.

Xi also “called for his country to stay the course” and emphasized that “no one is in a position to dictate to the Chinese people what should or should not be done.” For over 40 years since the U.S. and China established a formal relationship, the U.S. always hopes China could have economic and political reforms that helps itself to build free markets, a society with democratic rights and rule of law.

But China just started to refuse taking such reforms.

The trade war has spurred some Chinese entrepreneurs, government advisers and think tanks to call for faster economic reforms. The government should also free up private sectors stifled by state controls. Xi and U.S. President Donald Trump agreed early this month to a 90-day truce in the trade dispute, which halted the threatened escalation of punitive tariffs while continuing negotiations.

The young generation in China is losing hope on the country. After the no-term limit policy came out, students were more reluctant to return after completing higher education in the West since lifelong tenure of leaders is repulsive.

Some of them might have tried to seek full-time positions in China, but only find companies are losing profits and could not afford the wages they want. With house prices remaining high and income shrinking, young people in China are more than willing to study and work in other countries, including the U.S.

We should be prepared. Unless reforms recover from their death in China, there will never be an end to the waves of people in the customs zone of our country.

Daniel is a graduate student in LAS.

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