When foreigners arrive in China for the first time there are often three things that surprise them1) The way that the Shanghais skyline so closely resembles those found in New York, Tokyo and London.
2) Squat toilets.
3) The fact that, despite being a communist country, China has one of the most aggressively capitalist economies in the world.
The last of which will be our focus for today.
China and Capitalism
As most readers will know, despite Beijing’s insistence that China is and always will be a communist state its low levels of state regulation, abundant labor force, and its preponderance of municipal and provincial governments fighting one another to offer the best business incentives, mean that China now has one of the fastest growing, and most dynamic capitalist economies in the world. One that has enjoyed double digit growth at a time when many of it’s foreign competitors have been glad just to stay out of recession.
As most readers will also know, such rapid growth has comes at a price, and that any of the factors that have allowed it have also allowed many less welcome things as well. Indeed, it is almost impossible to pick up a quality newspaper around the world without seeing stories about how the above has allowed China’s workers to be abused left right and center, its farmers to be screwed over for their land, , its environment to be systematically abused, and foreign IPR to be ruthlessly plundered (this one pops up a lot in foreign newspapers). However, what readers might not know is that said price is also being paid by one almost forgotten group. One group which is essential to any capitalist economy; The consumer. Indeed, Chinese consumers are being screwed over on a regular basis.
In recent years, Beijing has made some efforts to put correct earlier mistake, and has acted in areas where price gouging has occurred in relation to essential products and services, such as schools, hospitals and new build apartments. However while the above have been greeted with open arms, Beijing’s latest crackdown on price gouging has been greeted with raised eyebrows.
Profiting from Death
According to Xinhua, China’s state media agency, Beijing set is to introduce sweeping new regulations to govern the funeral industry after it was revealed that companies have increasingly been taking advantage of China’s emerging middle classes ad their strong desires to create the right impression in life and death by charging believed relatives exorbitant fees for basic services.
Legislation is also set to be introduced in order to prevent businesses from speculating on death properties – including tombs and plots, and memorials for the storage of cremated remains – in an effort to stem rising funeral costs and to prevent the illegal development of land for non-productive purposes.
“Some cemeteries have been speculating illegally in tomb plots. This is contrary to the public interest and has sparked widespread protests” State Council, China.
Among the proposals put forward by officials are a upper limits on essential funeral services such as transportation of bodies, refrigeration, and cremation. As well as tough new laws to govern the reselling and leasing of plots, in order to prevent speculative purchasing and price fixing, and tougher penalties for those involved in the construction of illegal cemeteries.
While these proposals have been broadly welcomed by China watches, some of the measures that have been put forward have raised concern. A the top of the list of these concerns is the proposal that Mainlander will only be permitted to purchase death properties after the fact.
“Cemeteries will only be allowed to sell tombs or urns for ashes to customers with death certificates of relatives or friends” Xinhua
On paper, this would prevent speculative buying for the purpose of resale by making it impossible for a plot to be sold unless there is a body to put in it. However, China watchers have warned such moves would likely significantly interfere with any efforts that people might wish to make to prepare for their own death, or for the deaths of an elderly family remember, and would make it very difficult for families to purchase adjacent plots or large tombs so that a living relative might be interned along side dead ones at a later date. Potentially resulting in the fragmentation of families after death.
Each year, China requires 8 million new death properties, however, the average plot price in some municipalities has risen to over $US300 per M2, while the cost of funeral for a person living in a metropolitan area can exceed $US2,500, or 7 times the average annual rural income.