China's Next Challenge:
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China's Next Challenge: "Health Drain"

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The SARs outbreak in 2002 – 2003 was a significant turning point in China’s development.  Initial attempts to cover-up the outbreak in southern China were partially blamed for the disease’s spread to the rest of the world via Hong Kong. Eventually, Beijing had to issue an embarrassing apology and change its methods of dealing with such health crises. During the outbreak though, SARs caused many people to leave the country, and indeed those of us in China in 2003 can vividly recall ubiquitous face-masks and an eerie lack of foreigners in cities such as Shanghai and Beijing.

Since then, bird flu and swine flu outbreaks have been dealt with a much greater degree of openness and professionalism.  The latest version of bird flu to emerge in China is known as H7N9. Fears surrounding its spread and distrust of official disclosure have already begun to weigh heavily on market sentiment in Shanghai.  Following the Tomb Sweeping Holiday in China, Shanghai markets opened down nearly 2% on Monday morning, which many attributed to the rising concern about H7N9. Although the market eventually rallied to close down just 0.6%, a brief look at the main gainers during the day shows a conspicuous number of pharmaceutical and biotech companies such as Zhejiang Shenghua Biok Biology, Jiangxi Changjiu Biochemical Industry, Guangzhou Pharmaceutical, Henan Taloph Pharmaceutical and Nanjing Pharmaceutical.  Clearly, the virus (and possible beneficiary companies in the event of its spread) was on the market’s “mind.”

The “river pigs” scandal near Shanghai has yet to be properly explained, but given a further discovery of dead ducks in a different river, and the ability of other flu viruses to cross species between birds and swine, it hasn’t taken long for people to begin (rightly or wrongly) drawing connections between the two phenomena. High feed prices have apparently made hog-rearing a profitless exercise for many farmers, and the pig carcasses could be related to the slaughtering of loss-making herds, although the question would then turn to why the farmers dumped the meat rather than sell it even at low prices.

At the time of writing, mainland China has 21 confirmed cases of H7N9, with 6 deaths and 12 patients with severe symptoms, according to the most recent update from the World Health Organization. Yet lingering doubts about Chinese disclosure at a local level – a natural concern given the SARs cover-up – along with ongoing distrust of China’s official media, provides ample space for conspiracy theories— such as that the virus is a U.S. bio-psychological weapon as one military officer claimed— to take hold.  

However, a new burst of face-mask clad people will not be such an unusual sight this time around, for it has already been a difficult year for health in China. Record levels (at least acknowledged levels) of pollution in January, February and March already garnered much media attention. So widespread was the discussion that face-masks once again became common sights on the streets of some Chinese cities even before fears of H7N9 spread.

At this point, there are no signs that H7N9 has caused a flood of expats and well-off locals out of China along the lines of what occurred during the SARS outbreak, but HR departments in China’s major cities are almost certainly closely monitoring the situation.  Furthermore, even if the H7N9 virus turns out to be less serious than some fear, the ongoing problems with food safety and pollution will probably continue to push some of those who can leave to do so.  

After all, if H7N9 were to reach a tragic death toll of 400,000+ people per year, few who didn’t have to stay in China would do so. Yet the World Bank has reportedly estimated that almost double that amount of people die prematurely each year in China from pollution related illness.

“Brain Drain” afflicts a country when the best and brightest of a country opt to use their talents abroad. China, with its latest flu outbreak but more importantly its appalling environmental situation, may well be on the cusp of coining a new term; perhaps “health drain,” with the negative economic effects that such a phenomenon would entail. 

James Parker has lived in Beijing for eight years and has worked at both foreign and domestic financial institutions. He is also engaged in consulting in the areas of international economics and international political risk, and teaches post-graduate finance courses for various UK Universities. He is currenly a writer for The Diplomat's Pacific Money blog.

Comments
11
Liang1a
April 15, 2013 at 16:29

shenzhenjj wrote:

April 14, 2013 at 10:55 pm

Liang1a, you occasionally make a fair point about misrepresentation and then you descend into something ridiculous like "One fact of China's improving health is the increasing number of Olympics medals won by Chinese athletes. And Observer and other China bashers are just green eyed monsters who have nothing left to bash China with. All their demonizations of China are simply lies." To use Olympic success as a pillar of justification for China's improving health is frankly, laughable. China's health standards are improving, yes. There's no doubt about it. And that is wonderful, demonstrable and empirically verifiable. and certainly related to both economic prosperity AND the exchange of practices, technology and information. China's olympic success is also the product of economic development and "modernization". No right minded, impartial person would question this. But to imply that increasing health standards can be empirically linked to Olympic results is nonsense. Their improvements actually, logically, both share the same root cause. But they are certainly not causally related to each other. Something tells me the WHO and your own countries science academies will not be beating path to your door.

—————————

If  I understood shenzhenjj correctly, what he said is economic development is in and of itself sufficient to increase Olympic medals.  Or putting it another way, economic development will inevitably and exorably lead to increased Olympic medals even if the population is unhealthy.  From this one would expect a doubling of per capita income would lead to doubling the number of Olympic medals.  But this is not true.  America won 104 medals in 2012 Olympics while China won 88.  That is, America won 18% more medals than China.  America's per capita GDP is some 8 times more than China.  If shenzhenjj's contention were correct then America should have won some 700 medals or 8 times more than China's 88.   Therefore, obviously there is no direct correlation between economic development in and of itself and medal count.

Of course, higher economic development will allow more funding to build more sports facilities and train more athletes.  Therefore, to that extent there is certainly causal relationship between economic development and Olympic medals.  But economic development may not necessarily lead to healthier population.  For example, Americans are notorious for obesity.  And Chinese are notorious for smoking.  And both drink too much.  To the extent that higher incomes allow people to eat too much, smoke too much and drink too much, economic development in and of itself does not lead inevitably and inexorably to a healthier population.  Therefore, if economic development does not lead to healthier way of living then no amount of funding for sports facilities and training can produce strong and skilled athletes from runty obese people who are fundamentally physically weak and without the strong mental and physical stamina to sustain tough training.  Therefore, economic development is at best necessary but not sufficient for winning more medals.  To win more Olympic medals China must have more economic development but also at the same time produce healthier people who can then be trained into Olympic champions.

Therefore, shenzhenjj is not correct in insisting economic development is sufficient in and of itself to produce more Olympic medals.  In order to win more medals, China must have both economic development and healthier people.  Therefore, my contention that China's increasing number of Olympic medals is an indication of a generally healthier population is correct.  

Nakahiro
April 15, 2013 at 09:17

Meanwhile in China…chicken virus is spreading….

shenzhenjj
April 14, 2013 at 22:55

 Liang1a, you occasionally make a fair point about misrepresentation and then you descend into something ridiculous like  "One fact of China's improving health is the increasing number of Olympics medals won by Chinese athletes.  And Observer and other China bashers are just green eyed monsters who have nothing left to bash China with.  All their demonizations of China are simply lies."     To use Olympic success as a pillar of justification for China's improving health is frankly, laughable.  China's health standards are improving, yes.  There's no doubt about it.  And that is wonderful, demonstrable and empirically verifiable. and certainly related to both economic prosperity AND the exchange of practices, technology and information.  China's olympic success is also the product of economic development and "modernization".  No right minded, impartial person would question this.  But to imply that increasing health standards can be empirically linked to Olympic results is nonsense.  Their improvements actually, logically, both share the same root cause.  But they are certainly not  causally related to each other.    Something tells me the WHO and your own countries science academies will not be beating path to your door. 

shenzhenjj
April 14, 2013 at 22:41

you all could do with leaving your embarrassing nationalistic agenda's at the door. …how aobut exchanging ideas instead of rinse, and repeating nonsense drip fed in school and on the nightly CCTV, RT news. @Liang1a, and how does China's census bereau accuracy and objective publications rank versus the US, or other societies with press that are not EXPLICITY controlled by the govt??  I will believe a chinese statistic about societal ills, and curruption when the Media and Judcial systems are allowed to do their business independently….in particulary, keeping an eye on the govt. leaders instead of licking their boots.    A mind is a terrible thing to…nationalize.  

Liang1a
April 13, 2013 at 07:17

Observer wrote:

April 10, 2013 at 3:59 am

1. What happens in china, stays inside china (hopefully).

2. Where are all the chinese posters such as liang1a, john cha, beway, etc.? Do come in and tell us jealous Westerners about how great china is and how well chinese are living in china. Do not be shy and modest. Tell us the whole thing…LOL.

3. Let see, china has severe pollution in the air, land, water and then birds flu, then pigs flu, then pigs drown in rivers (in which being use as drinking water for chinese), then ducks drown in rivers.

 

Look like everyday some kind of new diseases or sicknesses are coming out of china. Must be the innovation from china that the chinese posters were bragging about.

—————————–

Don't make a challenge if you don't know what the truth is.  You think America is so superior to China?  Let's look at the cancer rate between China and America: [1]

The numbers are world ranking by country where the lower the worse and the higher the better.  For example, American lung cancer ranking is #9 and is worse than China's at #12

Lung cancer: US: 9; China 12.

Breast cancer: US: 61; China: 183

Colon-rectum cancer: US: 56; China: 80

Lymphoma: US: 21; China: 183

Pancreas cancer: US: 32; China: 105

Prostate cancer: US: 103; China: 178

Leukemia: US: 27; China: 82

Liver cancer: US: 139; China: 7***

Oesophagus cancer: US: 79; China: 6***

Ovary cancer: US: 41; China: 185

Bladder cancer: US: 73; China: 121

Other neoplasm: US: 97: China: 110

Skin cancer: US: 29; China: 150

Stomach cancer: US: 170; China: 3***

Oral cancer: US: 134; China: 104***

Uterine cancer: US: 43; China: 76

Cervical cancer: US: 171; China: 139***

The above data show China to be far better than America in terms of cancer incidence.  Out of 17 kinds of cancer, China is better than America in 12 kinds.  Therefore, it is America that is far more diseased than China.

As to incidence of influenza, China and America are about the same.  And I'm glad Observer brought up the subject of swine flu or pig flu as he called it because swine flu first emerged in the US and Mexico and not in China as he ignorantly presumed. [2]  And the most devastating flu pandemic was the Spanish flu which killed tens of millions of people.  The Spanish flu has been determined to be a bird flu. [3]  Therefore, Observer should know that bird flu and pig flu all originated in Europe and America.  Therefore, if anybody is to be castigated for infesting the world with diseases it is the Europeans and the Americans.  They are the filthy spawners of terrible diseases.  Europeans brough small pox to America and killed most of the natives.

And the pigs found in the Chinese river were not dead from diseases but killed by the cold weather.  The official places for disposing of dead pigs were filled so the farmers just dumped them into the river.  This is obviously a public safety issue but it is a one time anomaly.  It reflects nothing about the Chinese society in general and the problem is easily solved by building more facilities to dispose of dead pigs in the future.  It is certainly not as heinous as the mass killing of American children in their schools which seem to happen regularly and will continue to happen as guns keep increasing and killers keep going on rampages.

In the end, China is a society that is growing rapidly and in the process some things are not keeping up such as facilities for disposing of dead pigs as the number of pigs grown increases very fast in response to increased demand for pork as Chinese incomes increase rapidly.  As Chinese economy continue to grow these problems will be solved.  But America's problems are intractable and cannot be solved unless and until the American society as a whole changed.  This requires more fundamental changes in philosophy and social moral education and mores.  Observer is showing his ignorance in attributing various types of flu to China when in fact pig or swine flu and Spanish flu or bird flu were all originated in Europe and America.  The SARS and the current flu in China are suspiciously coincidental to the Chinese change of leaders.  Some are suggesting that it is the West or America that deliberately set loose the killer flu to intimidate the new Chinese leaders.  I think this should be investigated carefully.

The West and Japan are losing the economic war.  They have nothing left to demonize China so they turned to lambasting China for pollution and diseases.  But China's life expectancy has increased greatly over the last several decades and continue to improve.  One fact of China's improving health is the increasing number of Olympics medals won by Chinese athletes.  And Observer and other China bashers are just green eyed monsters who have nothing left to bash China with.  All their demonizations of China are simply lies.

[1] Cancer rates of China and America:

http://www.worldlifeexpectancy.com/country-health-profile/china

http://www.worldlifeexpectancy.com/country-health-profile/united-states

[2] Origin of swine flu:

http://en.wikipedia.org/wiki/Influenza

In April 2009 a novel flu strain evolved that combined genes from human, pig, and bird flu. Initially dubbed "swine flu" and also known as influenza A/H1N1, it emerged in Mexico, the United States, and several other nations.

[3] Spanish flu:

But no flu ever struck as fast, as hard, and with such lethal power as the 1918, or “Spanish Flu,” which rivals the Black Death as the deadliest epidemic in history. To a world already ravaged by war, the 1918 pandemic was crippling; some 30 to 40 million people died worldwide, with the highest death rate occuring in young men and women. In the United States, 675,000 people died, including over 40,000 G.I.s — 40 percent of all of those who perished in World War I.

Since the original broadcast of this program, Taubenberger’s team has successfully created a genetic sequencing of the 1918 virus, resurrected the virus itself to study its effects on lung tissue, and this fall announced a striking similarity between the 1918 virus and today’s H5N1 avian flu virus. Their findings indicate that the 1918 virus originated as a bird flu, confirming the legitimacy of concerns about avian flu.

http://www.pbs.org/wnet/secrets/features/killer-flu/the-origins-of-influenza/221/

Liang1a
April 12, 2013 at 18:59

Jean-Paul wrote:

April 11, 2013 at 12:10 am

@ All Chinese posters

It is articles like this that really bring a tear to my eye, this gross abuse of the environment and human lives should be seriously condemned by the international community. All this environmental destruction, human death, for what? So that the Chinese can brag about an overinflated, fake GDP figure? It is really a sad day when all you can brag about is a meaningless number while your fellow citizens are dying from viruses, dirty air, dirty water etc…..have the chinese really become that morally bankrupt?

—————————

Spare us your fake crocodile tears.  Chinese athletes won the second most number of medals in the Olympics.  That proves Chinese are very healthy.  Chinese life expectancy has increased 3.1 years from 71.4 to 74.5 over the 10 year period from 2000 to 2010. [1]  Obviously China's life expectancy is continuing to increase as the incomes of the Chinese people continue to rise.  Therefore, it is obvious that China's rising GDP is not a "fake meaningless number" but an important factor in bringing Chinese people a better quality of life.  As China's GDP continue to rise, the Chinese people's overall health and nutrition will continue to rise.  Within 30 years Chinese people's life expectancy can be expected to rise another 10 years to some 84 and the Chinese people will be the longest lived people in the world.  And China's environment will also be the cleanest in the world by 2043 as China's energy is derived mostly from wind, solar, hydro, nuclear and other clean energy sources while Chinese people drive all electric cars. 

Comparing the deaths by diseases, China compares very well against America.  China's incidence of breast cancer is far better than America by 122 places in world ranking; China is also better than America in lung cancer so it seems America's air is even dirtier than China's.  Though America is better than China in influenze and pneumonia, it is only by 16 places in world ranking; therefore, Americans are being killed by just as many viruses as Chinese. China is also far better than America in death from violence by 50 places.  Jean-Paul is just bashing China as usual.  But the truth China is growing richer very fast and as it grows richer the quality of life is improving for the Chinese as a whole.  But the West seeing they are losing economically can only bash China for its presumed pollution.  But like everything else, pollution is just a transitory stage.  And China is already improving rapidly.  In another 10 years China would be much cleaner.  In another 20 years China would be just as clean as any other counries in the world.  And by 30 years China would be the cleanest country in the world.  Then we'll see who has the dirtiest cities.

Breast cancer (per 100,000) and world ranking (higher the better):

China: 6.43; 183

USA: 18.8; 61

Influenza & pneumonia:

China: 14.91; 152

USA: 9.69;  168

Lung cancer:

China: 33.52; 12

USA: 35.38; 9

Violence:

China: 1.54; 142

USA: 6.47; 92

[1] China's life expectancy:

http://www.worldlifeexpectancy.com/country-health-profile/china

http://www.worldlifeexpectancy.com/country-health-profile/united-states

Liang1a
April 12, 2013 at 15:07

The link for the xinhua net quote in my prior post is as follows:

http://news.xinhuanet.com/english/china/2013-03/21/c_132251700.htm

Liang1a
April 12, 2013 at 15:02

Quote from the article:

“Brain Drain” afflicts a country when the best and brightest of a country opt to use their talents abroad. China, with its latest flu outbreak but more importantly its appalling environmental situation, may well be on the cusp of coining a new term; perhaps “health drain,” with the negative economic effects that such a phenomenon would entail.

————————-

The truth is Chinese are no longer as enthusiastic about emigrating. The fact that more Chinese foreign students are returning more than ever is a sure sign of the reversal of the trend of emigration. David Zweig [1] argued that there were more Chinese returning in 2009 because more Chinese students went abroad in 2009. It is obvious that Zweig does not know how to reason. For Chinese students who went overseas in 2009, it will take some 4 to 8 years before they finish school. That means those who returned to China in 2009 included very few who went overseas in 2009. Therefore, those who returned to China in 2009 went overseas at least 4 to 8 years prior to 2009. Therefore, the trend is obviously toward an increased return to China. This is caused both by a lack of opportunities in oversea markets and increased opportunities in China's domestic market.

David Zweig said "…2009, more than 240,000 Chinese students went abroad to study".    But if "…272,900 Chinese students returned home after finishing their education abroad in 2012" [2] then obviously more students returned to China in 2012 than the total of those who left China in 2009.  So, whatever the truth is, it is obvious that more Chinese are returning to China than ever before.  This is obviously a reversal of the brain drain of the past.  Therefore, Parker's argument that China's brain drain is worsening is false.  I have said for a long time that ultimately not all Chinese students can find better jobs in foreign countries because in due time China will have the biggest economy at the highest salaries.  China will also offer the best investment opportunities for Chinese investors.  In order to create a 300 trillion yuan economy China must invest some 1,000 trillion yuan over the next 30 years.  This is why foreign investors are so eager to invest in China.  It is up to the Chinese leaders to protect China's domestic economy and reserve it for Chinese investors first. 

With foreign investors banned from China's domestic economy, and with new policies to expand the service industries, China's economic growth will expand by leaps and bounds and provide the best job markets for all the Chinese people.  Those Chinese who stay overseas will ultimately come to regret it as China develops the richest economy in the world where the average salaries of the Chinese people will exceed those in the US by at least 1/3, especially since Chinese-Americans automatically get 20% less than their white colleagues doing the same jobs.

The health conditions of China is certainy not as grim as China-bashers demonize it to be. Obviously Chinese people would like their environment to be the cleanest in the world. But that does not mean Chinese environment is the poorest in the world. For most second tier cities, the environmental conditions are even better than in advanced countries. It is only in a few major urban areas that the condition is somewhat worse.  But with more policies being implemented to clean up the environment, the result has been very positive.  Even as China's economy doubled over the last 10 years the actual amount of pollutants have been reduced.  Beijing's environment is certainly much cleaner than that of London 150 years ago.  Even now, Beijing's environment is arguably cleaner than London. [3]  As I often said, those who live in glass houses shouldn't throw stones, or those who live in polluted cities shouldn't demonize China over pollution.   

[1] David Zweig:

http://www.nytimes.com/roomfordebate/2013/01/21/the-effects-of-chinas-push-for-education/luring-back-the-chinese-who-study-abroad

China is not only cultivating its own college graduates and experts, but also trying to bring back the sons and daughters who left China for higher education. While the number of Chinese students returning from overseas has increased dramatically, three nagging issues remain. First, the rate of return has remained approximately 30 percent for decades. True, in 2009 the numbers of returnees jumped to 115,000 a year, a threefold increase since 2007, but that increase is largely because in 2009, more than 240,000 Chinese students went abroad to study at all levels — high school, undergraduate and graduate degrees, a tenfold increase over 2004.

[2] Xinhua Net – 272,900 Chinese students returned home:

BEIJING, March 21 (Xinhua) — A total of 272,900 Chinese students returned home after finishing their education abroad in 2012, up 46.6 percent from 2011, said a senior human resources official on Thursday.

 

[3] London pollution:

http://www.guardian.co.uk/environment/2013/mar/19/uk-air-pollution-health-crisis

John Vidal The Guardian, Tuesday 19 March 2013 15.05 EDT

Most of last week, London's air was heavily polluted, with many of the capital's pollution monitors recording "high" nitrogen dioxide (NO2) levels as an acute photochemical smog of fumes and microscopic particles (PM) of acids, chemicals, metals and dust drifted in from the continent, mixed with London diesel exhaust and then became trapped in the still, dry air.

The last few weeks have been stressful for many of the 5.4 million people, including 1.1 million children, who are receiving treatment for asthma and for the tens of thousands of others with respiratory diseases. Since Christmas, there have been four major air pollution episodes, stretching from London to Nottingham, Birmingham, Leeds, Dundee and Glasgow. A pollution monitor in Downpatrick in Northern Ireland registered 10, the highest possible level of NO2.

papa john
April 11, 2013 at 03:48

I hope these Chinese posters don't get "chicken flu". China is a big source of pride so those problems are no big deal after all. Tomorrow China will have 100 trllion GDP so who cares about these small problem. The world should look at China with jealous eyes.

Jean-Paul
April 11, 2013 at 00:10

@ All Chinese posters

It is articles like this that really bring a tear to my eye, this gross abuse of the environment and human lives should be seriously condemned by the international community. All this environmental destruction, human death, for what? So that the Chinese can brag about an overinflated, fake GDP figure? It is really a sad day when all you can brag about is a meaningless number while your fellow citizens are dying from viruses, dirty air, dirty water etc…..have the chinese really become that morally bankrupt?

Observer
April 10, 2013 at 03:59

1. What happens in china, stays inside china (hopefully).

2. Where are all the chinese posters such as liang1a, john cha, beway, etc.? Do come in and tell us jealous Westerners about how great china is and how well chinese are living in china. Do not be shy and modest. Tell us the whole thing…LOL.

3. Let see, china has severe pollution in the air, land, water and then birds flu, then pigs flu, then pigs drown in rivers (in which being use as drinking water for chinese), then ducks drown in rivers.

 

Look like everyday some kind of new diseases or sicknesses are coming out of china. Must be the innovation from china that the chinese posters were bragging about.

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