Tuesday, March 27, 2012

What effect would near-term democratization in China have on Chinese demographics?

China Daily and Spiegel Online and Canada's Sun Media empire are just a few of the Western news sources that have been making claims that well-off Chinese are seeking to leave their country in large numbers, hoping to find safer, stabler places to live. Wieland Wagner's Spiegel Online article is typical.

Though the room is already overcrowded, more listeners keep squeezing in, making it necessary to bring in additional chairs for the stragglers. Outside on the streets of Beijing, the usual Saturday afternoon shopping bustle is in full swing. But above the clamor, in the quiet of this elegant office high-rise, the audience is intent on listening to a man who can help them start a new life, one far away from China.

Li Zhaohui, 51, turns on the projector and photographs flicker across the screen behind him. Some show Li himself, head of one of China's largest agencies for emigration visas, which has more than 100 employees. Other pictures show Li's business partner in the United States. Still others show Chinese people living in an idyllic American suburb. Li has already successfully arranged for these people to leave the People's Republic of China.

Li's free and self-confident way of speaking precisely embodies the Western lifestyle that those in his audience dream of. Originally trained as a physicist, Li emigrated to Canada in 1989. In the beginning, he developed microchips in Montreal, but he says he found the job boring. Then he found his true calling: helping Chinese entrepreneurs and businesspeople escape.

Of course, Li doesn't use the term "escape." Emigration from China is legal and, with its population of 1.3 billion, the country certainly has enough people left over.

Likewise, hardly anyone in the audience is actually planning to burn every bridge with their native country. Almost everyone in the room owns companies, villas and cars in China.

Many of them, in fact, can thank China's Communist Party for their success. But along their way to the top, they've developed other needs, the kind only a person with a full stomach feels, as the Chinese saying goes. It's a type of hunger that can't be satisfied as long as the person is living under a one-party dictatorship.

These people long to live in a constitutional state that would protect them from the party's whims. And they want to enjoy their wealth in countries where it's possible to lead a healthier life than in China, which often resembles one giant factory, with the stench and dust to match.

These longings have led many people in China to pursue foreign citizenship for themselves and their families. The most popular destinations are the US and Canada, countries with a tradition of immigration. "Touzi yimin" are the magic words Li impresses tirelessly upon his listeners. Loosely translated, it means "immigration by investment."

There have even been reports that large numbers of hopeful immigrants have been hoping to take advantage of Québec's immigration policy by learning French in large numbers.

Is the sort of emigration described, of well-off people seekng not so much economic opportunity as a better environment, potentially significant? Very much so. China may well be on the cusp of multiple sudden transitions, including political ones. The purge of Chongqing Communist Party chief Bo Xilai is one of the more notable events, helping to give credence to the false rumours of a coup inadvertantly amplified by the sort of heavy-handed censorship of Chinese microblogs that made people suspect something is up. Could China even be on the verge of democratizing? Who knows, but a recent post by Daniel Drezner at his blog suggested that premier Wen Jiabao might be interested in revisiting the official verdict on the Tiananmen Square student protests in 1989 before his tenure is up. Drezner was suspicious of this rumour, since apparently it has been in circulation for a while, but he still thought it worth noting. Why?

The omitted argument is a bit tangential, but bear with me. It relates to this Keith Bradsher story in the New York Times about China's relaxation of foreign capital strictures[.]

Both the inward rush of capital and the capital flight by affluent Chinese are interesting. They could force the central government to start making credible commitments with respect to property rights. Only such commitments will ensure that the locally wealthy Chinese will not immediately have their capital move to the exit whenever possible. Oddly, Wen deciding to open up Tiananmen might be a way of signaling to investors that Beijing intends to be a bit kinder and gentler than it's been over the past decade.

The international diversification of China's wealthy elite has another effect. Via Erik Voeten, I see that John Freeman and Dennis Quinn have a new paper in the American Political Science Review that concludes, "financially integrated autocracies, especially those with high levels of inequality, are more likely to democratize than unequal financially closed autocracies." Why?

[M]odern portfolio theory recommends that asset holders engage in international diversification, even in a context in which governments have forsworn confiscatory tax policies or other policies unfavorable to holders of mobile assets. Exit through portfolio diversification is the rational investment strategy, not (only) a response to deleterious government policies. Therefore, autocratic elites who engage in portfolio diversification will hold diminished stakes in their home countries, creating an opening for democratization.

Freeman and Quinn might as well be talking about China right now. Soo.... maybe the "princelings" are less worried about democratization than they used to be.

Certainly China has reached a level of economic development, as measured by GDP per capita, where a more democratic order is likely to be enduring. Certain suggestive correlations have been noted by other observers.

Looking at 150 countries and over 60 years of history, [Russian investment bank Renaissance Capital] found that countries are likely to become more democratic as they enjoyed rising levels of income with democracy virtually ‘immortal’ in countries with a GDP per capita above $10,000.

” Only five democracies above the $6,000 income level have died. Even democracies above the $6,000 level have a 99 percent chance of sustaining their political system each year. The only exceptions were the military coups in Greece in 1967 ($9,800), Argentina in 1976 ($8,180) and Thailand in 2006 ($7,440), and the events in Venezuela in 2009 ($9,115), as well as Iran in 2004 ($8,475),” RenCap global chief economist Charles Robertson writes.

The $6,000 per capita GDP seems to be a crucial level, marking the point where a country is likely to shift to democracy. Tunisia, which early this year triggered the wave of uprisings against autocracy across the Arab world, recently crossed that threshold.

[. . .]

According to Robertson, China has just entered a most dangerous political period, with per capita GDP at $6,200 in 2009. Even assuming 9 percent annual growth in per capita GDP, the country will remain in the most dangerous $6,000-10,000 range until 2014.

“The Communist Party of China is right to fear a revolution, and history suggests it will be lucky to avoid democracy by 2017, assuming per capita GDP has reached $15,550 by then,” he adds.

What impact would democratization have Chinese international migration? In post-Communist Europe the end of Communism made large-scale migration from post-Communist Europe to points around the world possible, but that model doesn't apply very well to a China that's been more successfully integrated into the wider world than any of the European Communist states. If there was a shift to a more democratic government in China, conceivably it could stem the migration of well-off Chinese seeking security that's been described recently in the Western press. If a democratic transition is triggered by an economic shock--not unimaginable, since economic shocks (like, say, a bursting of the Chinese real estate bubble?) often triggered democratic transitions, as in Mediterranean Europe, Latin America, and the former Soviet bloc--there could be more emigration notwithstanding increases in security.

All this occurs in the context of China's ongoing significant demographic changes, as described by Nicholas Eberstadt in a Swiss.Re essay from last year. Below-replacement fertility, the impending decline of China's working-age population and rapid growth of its seniors, the hollowing-out of rural areas to the benefit of urban ones, the surfeit of unmarriageable young men, the shift from the traditional extended family to somethiing closer to the Western nuclear family ... Rapid political and economic shifts would only complicate things further.

Does anyone have any ideas as to what might happen to Chinese demographics in the event of a radical political shift? I'm opening up the floor to everyone, here: it strikes me as a significant question that has not, however, been examined in significant detail.

Thursday, March 08, 2012

On upper population limits in Manhattan

Amy O'Leary's New York Times article "Everybody Inhale: How Many People Can Manhattan Hold?" isn't just of interest to New Yorkers. Manhattan is arguably the paradigmatic metropolis of the modern world; the question of how many Manhattanites can live, sustainably and in a reasonable degree of comfort, in that territory is universally relevant.

As crowded as the city feels at times, the present-day Manhattan population, 1.6 million, is nowhere near what it once was. In 1910, a staggering 2.3 million people crowded the borough, mostly in tenement buildings. It was a time before zoning, when roughly 90,000 windowless rooms were available for rent, and a recent immigrant might share a few hundred square feet with as many as 10 people. At that time, the Lower East Side was one of the most crowded places on the planet, according to demographers. Even as recently as 1950, the Manhattan of “West Side Story” was denser than today, with a population of two million.

By 1980, with the subsequent flight to suburbia, the population fell to 1.4 million. Then crime dropped, the city strengthened economically, and real estate prices started a steady climb, defying broader downturns in the economy as any dip in the market came to be viewed as a buying opportunity.

But those numbers measure Manhattan at its sleepiest, literally. Census figures count only residents, neglecting, as E. B. White famously wrote, “the New York of the commuter, the city that is devoured by locusts each day and spat out each night.”

If a whole city can be created and destroyed in a day, Manhattan comes close. During the workday, the population effectively doubles, to 3.9 million, as shown in a new report by the Rudin Center for Transportation Policy and Management of New York University. Day-trippers, hospital patients, tourists, students and, most of all, commuters, drain the suburbs and outer boroughs, filling streets and office space with life. Wednesday, it turns out, is the most populous day of the week, and special events, like the Macy’s Thanksgiving Day Parade, push the total past five million, offering a glimpse of what an even more crowded Manhattan might feel like.

So if Manhattan’s slow but steady growth continues — and there’s no sign it won’t — how many people can it handle? Answers to this seemingly simple question could fill enough pages to pack a spacious studio apartment, but a quick helicopter tour of future scenarios for Manhattan’s growth shows a tangle of towers and trade-offs.

O'Brien notes that Manhattan's fabric will certainly change radically even with the predicted growth of a quarter-million people by 2030. Low-density areas will be filled, and the skyline is going to rise substantially.

These days, Ed Glaeser, a Harvard economist, inevitably comes up in conversations about how cities should grow. In his recent book, “Triumph of the City,” he makes an argument — which many consider persuasive — that dense places are uniformly better and more interesting than emptier ones, and that they should be allowed to develop unfettered, even if it means building towers where brownstones once stood.

Affordability is the first reason. If you build up, he says, housing prices will fall and more people will be able to live in their own sliver of Manhattan sky. And that’s a good thing, Mr. Glaeser adds, since the energy of all those newcomers will fuel innovation and entrepreneurship, attracting talent and growth to create a virtuous circle. From energy-efficiency to life expectancy to finding a date or something to do on a Saturday night, Mr. Glaeser argues that denser places have the edge.

He’s all for sacrificing charming stretches of the city for more residential space. He favors preserving noteworthy architecture, but suggests a cap on the number of protected buildings at any one time. If you want to protect a new building, he says, another should come off the list.

“There are certainly individual buildings that I feel sentimental about,” Mr. Glaeser said, recalling the memory of watching snow fall on the brownstones and the old Magyar church across the street from his childhood apartment on 69th Street between First and Second Avenues. “Sure, I would feel a little bit sad if that was torn down, but the upside of having thousands more people getting to enjoy New York would outweigh my personal feelings.”

Mr. Glaeser thinks restricting building height is fundamentally unfair. He has proposed scrapping the city’s permitting process in favor of “impact fees” that developers would pay to cover the infrastructure costs associated with their buildings. So if somebody wanted to build a 50-story building, he or she would simply put up the money required to support its water, sewer, power and so forth.

O'Brien concludes that the ultimate upper limits to population in Manhattan may be very high, so long as the city is willing to support investment in innovative solutions to infrastructure. She invokes the memory of the Kowloon Walled City of Hong Kong, a very high-density enclave in that high-density city that was demolished in the 1990s. If Manhattan had the Walled City's population density, it would support 65 million people.

Friday, March 02, 2012

Some more population-related links

  • The immigration of white South African farmers to Georgia, according to Eastern approaches, is actually occurring.

  • In August 2010, showing commendable imagination from a 5,000-mile distance, the authorities in Tbilisi invited South African farmers wanting a change of scene to consider an alternative: farming in Georgia. The country has an exuberantly pro-business government, low crime rates, and soil that positively squelches with underexploited potential. Once an agricultural power-house, Georgia now farms less than half of its arable land. It has less than half the number of cows and one-third of the pigs that it had in 1990. Agriculture employs over half the population, yet contributes less than a tenth of GDP. Ridiculously, this fertile country now imports 70 percent of its food. As a result, many of Georgia’s poorest people live in the countryside. Agriculture contributed over 16% of GDP in 2005, but only 8% in 2010.

    [. . .]

    Many local farmers are still suspicious. Most of them are subsistence-level producers; nation-wide, the average farm is less than one hectare. Seeing a government that has long paid them little attention suddenly court South Africans has produced mixed feelings. Last year, local farmers demonstrated in the village of Zeghduleti, near Gori, after common pasture that they had long used for grazing was cleared for sale to a foreign investor. After a number of arrests, the farmers were eventually advised to slaughter their cattle or graze them further afield. Georgia’s impatient government has a taste for dramatic change and short-term results. But as farmers know better than most, patience can be a virtue too.

  • Marginal Revolution observes that the incumbent Haitian president might be expelled from office if it turns out that he has been hiding a foreign citizenship, dual citizenship being unpopular in Haiti as a general rule and potentially even cause for banishment if a dual citizen involves himself in politics.

  • Marginal Revolution wonders why more Americans aren't moving to booming western Canada. The general consensus in the comments seems to be that Americans find it more difficult to move to Canada that you'd expect, for legal and cultural reasons as much as anything else.

  • The Population Reference Bureau's blog notes that improvements in sex ratios at birth in Indian states have stagnated for the time being.

  • The northwestern states of Punjab and Haryana have been the worst offenders. Haryana, formerly part of Punjab, was created in 1966 and borders Delhi to the north, west, and south. In 1999-2001, these states had very low SRBs of just 775 and 803, respectively. While they have since risen to 836 and 849, the last three SRS reports show a worrying tendency for the SRB rise to have leveled off. A low birth rate is often considered motivation for sex-selective abortion as male children could be more valued when couples have few children but that pattern is definitely not uniform across India. In Punjab, the total fertility rate (TFR — the average number of children a woman would bear in her lifetime in the birth rate of a particular year were to remain unchanged) was 1.9 in 2008 and 2.5 in Haryana. But it was also low in Karnataka (2.0) and Kerala (1.7), states with SRBs in the normal range. And, the two states with the highest TFRs, Bihar (3.9) and Uttar Pradesh (3.8), have low SRBs. Together, those latter two states hold 300 million population, one-fourth of India’s total.

  • Anatoly Karlin's brief post at Sublime Oblivion makes a convincing case that Russian demographics are no longer uniquely dre, with rising fertility, falling mortality, and net migration.