More

    China, Poor No More

    Stockholm (NordSIP) – For the second year in a row this summer, NN Investment Partners seeks to activate the minds of holidaying investors with their popular Summer Course on responsible investing. Featuring six thought-provoking lectures presented by leading international academics, the course offers valuable insights into the future interplay between sustainability, finance, and technology.

    Alongside other fans of the course, on a hot mid-August day, NordSIP tunes in to a refreshingly different presentation by Professor Bohui Zhang from the Chinese University of Hong Kong. Focusing on the two main drivers of poverty alleviation in China: government policy and technology, Zhang presents an astute analysis of the key policies implemented by the country’s central and local governments and provides many fascinating examples of how technology is helping to alleviate poverty.

    Even for those who have not had the chance to visit China in recent years, the country’s progress in improving its enormous population’s standard of living is hardly a secret. Yet, it is difficult not to be impressed as chart after chart in the presentation clearly illustrate the leaps taken over the past decade.

    - Advertisement -

    Turning to the explanations, the professor guides us expertly through recent history, from the early days of designing the ‘Targeted Poverty Alleviation’ policy in 2013 to its experimental application in Yunnan province in 2015 and its roll-out in the rest of the country. “The key performance indicators for the promotion of provincial officials have shifted,” he explains. Poverty alleviation is now officially the third KPI, alongside the traditional ones of GDP and social stability.

    And it is not just officials that are evaluated on their efforts to combat poverty. The government calls for private capital to engage in the anti-poverty campaign, too. Both Shanghai and Shenzhen stock exchanges now require that listed companies disclose activities and expenditures devoted to poverty alleviation.

    It is striking how timely the lecture is. With Zhang’s background on government policy, it is much easier to understand the flood of market news recently reporting how listed companies are scrambling to align themselves with China’s new campaign to reduce wealth inequality known as the ‘common prosperity’ goal. Pinduoduo and Tencent were first out to pledge billions of dollars each in support of the wealth redistribution efforts, and others are following suit. Alibaba just announced it would donate 100 billion yuan by 2025 to help achieve president Xi’s ambitious goal. Meanwhile, Didi, JD and others are allegedly helping employees establish their first union, as China imposes rules to curb excessive work and protect millions of blue-collar workers from exploitation.

    The lecture gets even more entertaining as the professor moves on to examples of how technology, and big data, are accelerating the work. We learn that kiwi farmers in Xiuwen rely on real-time data to help them with adequate fertilization and pest prevention. The customers buying their juicy produce can find out the details simply by scanning a QR code. Meanwhile, fintech companies increasingly use big data to rapidly assess credit risk and grant microloans.

    Focusing on the positive contribution of advanced technological solutions and big data, the professor manages to navigate deftly around sensitive subjects such as concerns over data security, privacy, and surveillance. However, neither the audience nor the moderator feel compelled to challenge Zhang on these questions that dominate the debate in the West. In the end, we all get to decide for ourselves whether the impressive results justify the means.

    Photo by Simon Zhu on Unsplash

    Latest Posts