Futureproofing your English with Technology: Getting the most return-on-investment in an automated world

A week ago I gave a guest lecture at a local college discussing three high growth areas in China: artificial intelligence, robotics and elderly care.

I also explained to the college students majoring in foreign languages such as English they should continue learning other skills, instead of merely mastering English proficiency. This was given on December 4, 2013 at Shanghai University of Sport. All citations are included in the notes (the PPT is up over here at Slideshare.net). Note: about 5 minutes are missing in the middle of the video due to technical issues. [Here is the same video on Youtube]

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Chapter 18 – Retirees, Insurance and NGOs

[Note: below is Chapter 18 from Great Wall of Numbers]

While there have been a number of reforms in the past three decades, another potential headwind that Chinese policy makers will increasingly face in the future are financial burdens and pressures from entitlement programs such as its social security and health care.  In fact, one common misunderstanding many Western analysts have is that during the introduction of market reforms state subsidized living has been phased out.

While it is true that the monolithic cradle-to-grave “iron rice bowls” (铁饭碗) structure has been somewhat liberalized, the shortfall in funding the public pension system will still hit $2.87 trillion this year.123 In fact, according to Cao Yuanzheng of the Bank of China, “[s]uppose the annual rate of GDP growth was 6 percent. China’s pension shortfall would reach 68.2 trillion yuan by 2033, accounting for 38.7 percent of the year’s GDP.”4

One of the reasons for the marked increase is, as I mentioned in Chapter 6, that the life expectancy in China has grown from 65 in 1976 to 73 in 2010.  And because of the one-child policy, ceteris parebus, the population is likely to peak within the next 20 years.56 Thus assuming the retirement age is not increased, by 2050, it is estimated that 31% of China’s population will near the age retirement age; and within 40 years China will have nearly 500 million elderly people.7 In contrast, today about 14.8% of China’s population is over the age of 60.  And according to Li Jun of the Chinese Academy of Social Sciences, “by 2050, China’s working age population (aged 15-59), will be reduced to 710 million, a staggering 230 million less than in 2010.”8 In fact, the Chinese working-age labor force itself shrank by 3.45 million in 2012, a decline that is expected to continue into the future.9

Under the current system men are eligible for public retirement benefits beginning at the age of 60 and women at state-owned enterprises can retire at 55 (women in private industry can start receiving benefits at 50).  Thus in an attempt to alleviate the stress on the system in June 2012 one proposed reform openly discussed in Beijing was to raise the retirement age beginning in 2016 – increasing the required age one year on alternating years – creating a uniform retirement age of 65 by 2045.10 Yet such proposals have also proven to be resolutely unpopular with younger generations.  For example, one poll from People’s Daily this past June found that 93.3% of the 450,000 respondents voted against raising the retirement age.1112

Pension costs and opportunities

Irrespective of the stated goals in universal health care programs, economic laws such as supply, demand and scarcity are immutable.  Hospitals, medicine, medical equipment and doctors are all scarce, finite resources.  Whereas a free market would ration these resources via prices which arise from interaction between market participants, national health care plans ultimately involve some price distortions (e.g., subsidies) that invariably create artificial shortages and/or oversupply.13 Or rather, there is no such thing as a free lunch, ultimately someone has to pay.  And any activity that is discounted financially (e.g., subsidized) will ceteris parebus be consumed more.  While a significant portion of the political class and electorate on each hemisphere are increasingly fond of universal health care “for free” – the underlying finances of these entitlement programs will become markedly burdensome in the long run.14 China is no different and there may be opportunities for NGOs and foreign businesses to plug into the holes and gaps that are not covered by state programs.

China’s 11th Five year plan (2006-2010) included a number of health care reform provisions.  One provision included extending subsidized healthcare to every Chinese citizen by 2020.15 On January 21, 2009, China’s State Council signed off on this plan which was further expanded in the new 12th Five year plan (2011-2015).  In the three years since these provisions were enacted, over 1.5 trillion yuan ($240 billion) has been spent in the medical sector.16 According to one estimate roughly 95% of the populace now has access to “basic health care.”

As noted in Chapter 6, there are a number of opportunities for both foreign and domestic health care professionals, pharmaceuticals and medical supply companies to find new opportunities in this growing industry.  For example, medical equipment companies such as QIAGEN, which makes medical diagnostic equipment (e.g., blood tests), have found a new revenue source from the 33,000 hospitals and clinics that have been financed as part of this new government plan.  In fact according to one estimate in 2010, the medical device market on the mainland alone is worth roughly $11 billion, “with a compound annual growth rate of 30.6 percent in revenue.”17

At the same time, while it is difficult to predict how long the health care sector will continue receiving subsidies from governmental bodies, because of the rapidly aging population and because the elderly typically spend significantly more on health care, even if the level of subsidies remain this aging process will place challenges on the system in the long-run.18 Challenges that have the potential to be turned into opportunities.  For example, the World Health Organization estimates that 28% of people older than 15 are smokers – that there are approximately 330-350 million smokers in China.1920 40% of the world’s smokers reside in China and roughly 60% of all adult men smoke (compared with 4.2% of women).21 Yet despite various health campaigns and public service announcements highlighting the dangers of smoking and second-hand smoking, there are a number of incentives that prevent this activity from being purged.  For instance, at $18.7 billion in 2010, China National Tobacco (a SOE) generated more profit than either HSBC or Walmart.22 For perspective, in terms of worldwide sales, China National Tobacco has a commanding 40.6% on cigarette sales globally (Philip Morris has 14.9%).23 Furthermore, the tax revenue generated by tobacco sales was more than $95 billion in 2011 and $137 billion in 2012.24 Cigarette sales in China are expected to grow 13.5% a year and reach 2 trillion RMB ($321 billion) by 2016.25 Yet arguably these direct incentives (tax revenues) probably do not offset the medical expenses and costs that government bodies will eventually pay for in medical care for smokers as they age.

Case in point, each year on the mainland there are around 1.2 million smoking-related deaths (such as chronic obstructive pulmonary disease (COPD)), a number that is expected to increase to 3 million by 2030.26 What are the financial costs?

While smoking-related deaths and illnesses may not have the same direct economic consequences as HIV/AIDS has had on south African countries like Botswana — the economic impacts are both pronounced.  HIV/AIDS struck significant portions of Botswana’s able-bodied working-aged populations, stunting the country’s economic performance.27 Likewise, while the effects of smoking are more pronounced and detrimental in later stages of life, the total health care costs borne by friends and relatives (and insurance) will create an economic headwind considering that the funeral bills, hospital visits, treatments and medicine for 3 million individuals must be borne by someone.

For perspective, the roughly 42,000 people that die in the US each year due to second-hand smoke represent $6.6 billion in lost productivity.28 And according to a recent study in the US, on top of Medicare subsidies, more than three quarters of households spent at least $10,000 in out-of-pocket expenses in the last five years of life.29 While both the level and costs of care in China are still significantly lower than those in the US, there are 202 million Chinese aged over 60 a number that will double by 2030.30 Thus the increased costs borne by one or more parties will be increasingly substantial in the decades to come.  In fact, by 2015 it is estimated that in China “a decade of costs tied to health care and losses of productivity from diseases such as diabetes and heart disease are expected to reach as high as $550 billion.”31 Or conversely, according to the World Bank by reducing deaths in China from heart disease and stroke (which smoking contributes to) by 1% a year this could, “generate economic value equal to 68 percent of China’s 2010 real gross domestic product, or $10.7 trillion.”32

Compounding this issue is the one-child policy along with the Confucian ideal of ‘filial piety’ (e.g., children care for their parents as they grow older).33 For example, one source I spoke to explained that because many parents are dependent on their children to support them when they retire, that the death of their only child can be devastating both emotionally and financially.  In fact, according to this source, in the event that an only child dies, those living in rural regions typically do not have access to any other social safety nets; that the only stipend they may receive from 3rd parties is a 50 RMB ($8) a month from the local government.  The Ministry of Health (now the National Health and Family Planning Commission) estimates that “at least 1 million families had lost their only children by 2010” and many of those parents are too old to have another.34 Ren Yuan, a professor at Fudan University, has a higher estimate of 10 million families who have suffered this loss, including 300,000 in Shanghai.35 This then presents an opportunity for both domestic and foreign NGOs, to provide assistance to these at-risk demographic segments (see below for examples).

And again, this presents opportunities to both foreign and domestic health care providers and medical device manufacturers to help provide care for COPD and emphysema as well as Alzheimer’s (as mentioned in Chapter 6, China has the largest population of Alzheimer’s sufferers).36 How else do these policies also impact foreigners?

Retiring on the mainland

Under a series of new laws and regulations passed in the last year, foreigners who have spent at least 15 years collectively (not necessarily sequentially) are allowed to retire on the mainland.37 At the same time, the new laws which went into effect October 15, 2011 also requires employers to levy similar social security taxes on foreign workers, even if those workers have no plans to retire on the mainland (similar to FICA taxes in the US which are levied irrespective of nationality).38 Yet there are additional reforms on the drawing table.  For example, under new regulations announced on December 11, 2012 foreigners “who obtain permanent residency will have the same pension, employment and property rights as Chinese citizens.”39 This also includes social insurance benefits (e.g., medical, unemployment) and simplifies investment and registration procedures for starting up a new business.

According to the Social Security Administration, about 350,000 American retirees who receive Social Security benefits do so “in countries other than the U.S.”40 While the majority of those retirees live in Europe, Canada and Mexico I have met several dozen retirees working at various institutions in China in various capacities (e.g., teachers, health care consultants, accountants).  While there is an official age cut-off limit of 70 years enforced at many of these institutions, there are still a number of part-time and NGO opportunities that are open irrespective of your age.

Because the costs of living are typically substantially less in provinces further inland (relative to their home countries), one possibility for retired Westerners – irrespective of whether or not they have worked in China previously – is to work as foreign experts at education and cultural institutions.  For example, Irvin Abercrombie of California (see below) previously worked as a process design and industrial distribution engineer at various sites across the US.  Since his retirement he has spent the past eight years working at colleges and schools across China.  And as I mentioned in Chapter 9, more than 100,000 foreigners are hired each year to work in the EFL industry alone on the mainland.41

Insurance

Following its admission into the WTO, foreign companies were allowed to set up joint ventures on the mainland.  As a consequence, dozens of foreign-funded insurance companies are doing business across the country.  The largest foreign insurance firm is AIA, who holds about 1% market share on the mainland.  The aggregate of all foreign firms is below 5% in the life insurance market and about 1% in property and casualty.42 Yet even with that relatively small amount, according to Mark Kellock an analyst at Barclays Capital, “that [1%] sliver still accounts for 8% of all its [AIA] new business.”43 For comparison, China Life is the largest Chinese insurance company, with about 33% marketshare and generated almost $60 billion in revenue in 2011.44

And because of a relatively low penetration rate of around 4% overall, the life insurance sector doubled between 2007 and 2010.45 Altogether premiums revenue reached around $220 billion in 2010.  For comparison, in 2009, the US insurance industry generated $934 billion in premiums.46 The world wide insurance market generated just over $4 trillion in 2010 with European firms accounting for 35.4% of the total market share.47 And Swiss Re projects that both life and non-life insurance premiums will grow in China about 9% a year until 2020.48

Yet this industry is not a get-rich-quick market.  According to Moody’s, of the then-47 foreign insurance companies in China, only 11 made a profit in 2010.49 In fact, in 2011 the annualized return on investment for the insurance industry declined by 3.6%.50 Similarly in 2012, the 26 joint Sino-foreign insurance ventures as a whole collected a mere 47.5 billion RMB ($7.61 billion) which is roughly 4.7% of marketshare, down from 8% in 2007.51 The lower joint-venture numbers are a result of exits and liquidations by partners leaving the market.  Unsurprisingly, according to PricewaterhouseCoopers, the top three industry challenges include regulatory uncertainties, market shakeout (along with entry by domestic banks) and “finding and keeping good personnel.”52 These are essentially the same issues that all open industries throughout China face.

What this means is that for foreign firms and individuals with experience in all forms of insurance, actuarial and re-insurance industries have the potential to find new growth opportunities due to the relatively low penetration rate (4% as noted above).

Non-profits and NGOs

On May 12, 2008, approximately 69,000 people were killed during the deadliest earthquake that has hit China in the past 30 years.  Subsequently, aid and donations (totaling $11.2 billion) from around China and the world poured into Sichuan, the epicenter of the disaster zone.53 Yet after the dust settled, several investigations discovered that various organizations and institutions had siphoned off tens of millions of dollars due to a lack of transparency and accountability.54 In fact, the Red Cross Society of China (RCSC) itself failed to collect the funds donated to drop boxes placed throughout several hundred locations around China – four years after the quake.55

One of the reasons has to do with institutional administration.  In June 2011, a businessman on the board of the RCSC was discovered to have diverted charity money to his girlfriend, Guo Meimei, who in turn spent the funds on a Maserati, business-class airline seats and handbags from Hermès (she posted pictures of it all on Sina Weibo).56 This created a scandal that resulted in a shakeup of the organization and created public backlash that has lowered trust in such organizations.  In fact, according to China Daily, “90 percent of the people surveyed said that they will not donate to RCSC any more.”57 And due to the perceived corruption within the sector and long-held cynicism subsequent donations fell that summer by 80% – impacting every charity on the mainland.58

According to official statistics there are technically 425,000 “social organizations,” however only about 1,000 organizations that are typically considered NGOs (e.g., environmental, women’s rights, anti-discrimination).59 And while there are the usual series of hurdles and challenges that all participants face, the relatively few NGOs presents an opportunity for both foreign and domestic firms and individuals.

Ecotourism and agritourism

In November 2012 I spoke with Irvin Abercrombie who is originally from California and retired as an industrial designer eight years ago.  He has since spent nearly all of the subsequent time working in various capacities in the education industry on the mainland.  In 2007 he co-founded Dragon Lake Keepers with Pat Sullivan (see Chapter 9), an environmental group located in Anhui.  According to him, “I initially started this group informally with students at a local college I was teaching at.  I was surprised by the relatively large quantities of litter that was piled on the side of roads and wanted to lead by example, so each week I would take a group of volunteers to a nearby lake called Longhu (Dragon Lake) and we would literally pick up the trash with our hands.  Word quickly spread that a foreigner was voluntarily picking up the rubbish that most people do not think twice about before they drop.  Subsequently we were interviewed by a number of media outlets including a Huainan television station (a neighboring city) to find out our motivations.  And as a consequence we quickly restructured our group into a formal organization that includes support from the IFED (now PCDN) and even have t-shirts and a theme song.”  PCDN is the Peace & Collaborative Development Network an NGO specializing in connecting professionals in areas such as conflict resolution and international development.60

What Abercrombie is describing is an environmental issue that has been moved to the forefront of policy making discussions.  While it is hard to fully quantify the impact of environmental pollution (due to a number of variables), a recent MIT study published earlier in 2012 estimated that the lost labor and increased health care from air pollution “cost the Chinese economy $112 billion in 2005.”616263 A World Bank study published in 2007 found that “the health costs of air and water pollution in China amount to about 4.3 percent of its GDP.”646566 The Asian Development Bank says “air pollution could be imposing annual economic costs equivalent to as much as 1.2 per cent of the size of the economy.”67 During January 2013, breathing the air in cities such as Beijing was likened to living in a smoking lounge or smoking the equivalent of 21 cigarettes (Guangzhou’s air was equivalent to 25 cigarettes and Shanghai was at 9).686970 As an unintended consequence, one of the business opportunities for domestic and foreign businesses is to sell air purifiers.  For example, Philips electronics recently posted sales growth of 300% over the past several months and “their two most popular models have been out of stock for most of January.”71 Yuan Da, a Chinese firm that makes air purifiers sold 3.5 million units online in January 2013 compared with 1 million in October 2012.72 In addition to selling face masks, air purifiers and even cans of bottled air, another opportunity is building “pollution domes” above recreational facilities to wall off airborne dust such as those above international schools in Beijing.73 Or to take a page from Chapter 13, air quality monitoring apps for smartphones have become quite popular, with one developer – Wang Jung – seeing 58,000 downloads of his app in one day (up from a mere 1,000 it typically gets).74

In the run up to the 2008 Beijing Olympic games, between $17 billion and $32 billion was spent creating a “greener” environment surrounding the city (e.g., closing down factories, creating parks).75 This is an ongoing process as between 2011 and 2015 various institutions and governmental departments plan to spend $56 billion to cut the level of harmful particles in the air (e.g., PM 2.5 particles).76 This past year these particles were estimated to cause the deaths of approximately 8,500 residents “in Shanghai, Guangzhou, Xi’an and Beijing [which] has led to a total economic loss of 6.8 billion yuan ($1.09 billion).”77 It is not just air either as an estimated “57% of China’s urban underground water is polluted” and roughly half of the cities are left with drinking water that fails to meet acceptable hygienic standards.78 According to the Ministry of Land and Resources, “heavy metal pollution results in the loss of 10 million metric tons of grain and the contamination of another 12 million metric tons annually, incurring 20 billion yuan [$3.2 billion] in direct economic losses each year.”79 And while there are a number of reasons why this pollution takes place including a tragedy of the commons and lack of clear property rights enforcement, organizations like Dragon Lake Keepers can provide a service that is currently in short supply.

In fact, Abercrombie’s long-term goal with the organization includes not just cleaning and educational workshops but also ecotourism and agritourism.  For example, “I helped put together a business plan that would allow English-speaking students to act as tour guides for foreign tourists who are interested in the surrounding historical sites and agricultural produce.  The city of Bozhou is nearby and it is the home to TCM [Traditional Chinese Medicine]; Zhu Yuanzhang (the ‘poor emperor’) was born in a neighboring county; there is a local vineyard that produces some of the most popular wines sold on the mainland; and there are even fresh water pearls cultivated in Dragon Lake itself.”  Yet one of the challenges that Abercrombie and others face elsewhere is receiving proper government support and certification.  According to him, “unfortunately the agritourism and ecotourism plans did not pan out in part because we did not have the clout and guanxi needed with local authorities and because we had intended to pay the students.  And once money is involved, taxes and regulations come into play.  And since we are foreigners trying to help spearhead this endeavor, it has unfortunately been tabled for the past year.”80 Thus his advice to foreigners and foreign NGOs is to make sure volunteer organizations remain completely Chinese led, treat it as a school or community project and do not involve profits or financial gains until later phases.

In terms of overcoming challenges, according to one NGO source I spoke with, “there are a few notable organizations that have obtained NGO status in China including Operation Smile, Roots n Shoots, World Wildlife Fund, Habitat for Humanity and Ciwei in Shenzhen.  There are several reasons why they have succeeded where others have not.  For instance, with the help of Jackie Chan’s celebrity status, Operation Smile was eventually granted permission to become an NGO.  Another reason is that there are issues that seem to be less sensitive – like the environment and animal protection (MarineDream, SeaTurtles911, EcoDesign Fair) – that have a little more wiggle room in terms of operating in the NGO segment on the mainland.   In addition, the role of the private sector in funding NGOs is relatively foreign.  Charity contributions and CSR (Corporate Social Responsibility) are still new ideas to companies in China so this may take some time to become accepted.  Another area is grassroots campaigns.  Over the past five years an increasing amount of Chinese students and younger people have begun looking for ways to do charity work.  BEAN and Greennovate are two examples of NGOs that have managed to reach into the Chinese community through Weibo and other social media.”  Ciwei Philanthropy Institute operates a school for 132 students whose parents are migrant workers and have been unable to receive a hukou (household registration) in Shenzhen.81 Only holders of certain hukou can have access to public institutions like schools.

And one other area for opportunities that Abercrombie discussed involves a nascent segment called agritourism in which tourists pay visits to farms and ranches – to experience a rural lifestyle.  While this is relatively non-existent on the mainland, for comparison, according to Rural Bounty, an agricultural membership organization, there are 65,000 farms and ranches that are open to the public in North America.82 A 2007 US Department of Agriculture estimated that 23,000 farms offered agritourism activities, “bringing in an average of $24,300 each in additional income.”8384 According to the same study, California which is the largest farm state in the US had, “nearly 700 farms averaging more than $50,000 in agritourism income.”  In fact, according to a survey from the University of California, “California farmers and ranchers hosted more than 2.4 million agricultural tourists in 2008.”85 And one farm in Florida charges $1,500 a night for groups to participate in culinary retreats that include, “handcrafted beds topped with bamboo sheets, a five-course organic dinner and breakfast and lessons on how to prepare meals using farm-raised, hormone-free livestock, eggs and produce.”86

Or in other words, Chinese farms and ranches such as those in Anhui are leaving a lot of money on the table by not utilizing this new type of tourism.

There are also nearly 900 US farms and ranches that participate in the germinating ‘farm stay’ subindustry – which are distinguishable from traditional bed & breakfasts as they include activities like farm-based cooking classes.  These classes “can cost $25 to $2,000 per person, depending on the location and chef—usually start in a field, barn or greenhouse. Students harvest vegetables, milk cows and goats, and gather eggs.”87 Thus entrepreneurs and businesspeople with experience in ecotourism and agritourism (e.g., guides to Nappa Valley wineries) may eventually find new opportunities on the mainland including rural Anhui.

Other areas of the mainland have accepted and adapted to this new industry.  According to China Daily, “[h]ouses have been built for tourists to rent in attractive locations in the countryside in Zhejiang province, more than 90 percent of which have received investment from private capital.  They make up to a 20 percent annual return.”88 Thus perhaps it may be only a matter of time until inland holdouts allow these tourism industries to grow as well.  Simultaneously firms that specialize in air purification and air treatment goods and services will find new opportunities as the goal of cleaner air is being pushed at all levels of Chinese society.89

Takeaway: The financial costs – and the burdens – for entitlement programs in the West offer an increasingly important illustration of the entitlements being offered in China as well.  Over the past several years Chinese policy makers have enacted a number of reforms that have increased spending on health care access and public pensions.  While both domestic and foreign firms can find new opportunities in this market, the sustainability and solvency of such government programs remains unclear.  At the same time, because of new laws passed over the past year, foreign experts looking to retire overseas now have fewer legal hurdles on the mainland than before.


Endnotes:

  1. Even though there have been a number of pension reforms that purportedly affected state-owned enterprises and civil servants, the traditional “iron rice bowl” is still sought after.  See Iron Rice Bowl Redux: Official Jobs No. 1, Says Survey from The Wall Street Journal, Civil servants to lose ‘iron rice bowl’ from China Daily and ‘Iron rice bowl’ ban served up in another city from China Daily []
  2. The golden rice-bowl from The Economist []
  3. There are now approximately 10 million civil servants up from 3.7 million in 1978.  And a record number of applicants – 1.12 million – took the annual civil service exam in November 2012.  See China’s Civil Service Reform: An Update by Kjeld Erik Brodsgaard and Chen Gang and  Record number of hopefuls sit annual civil service exam from China Daily []
  4. Pension gap to hit $2.87 trillion from China Daily []
  5. According to UN projections India will likely eclipse China during this time frame in large part because its birth rate remains above the 2.1 babies per mother replacement mark.  In contrast, China’s birthrate is effectively 1.47 babies per mother.  See Age will weary the Chinese miracle from BusinessSpecator, China’s Achilles heal from The Economist, Birth rule could be relaxed from China Daily, Recession Big Factor as Birthrate Falls from The Wall Street Journal and One-child policy shift won’t usher in China baby boom from Reuters []
  6. Another area of potential impact that the one-child policy may have is on macro consumer behavior.  See Little Emperors: Behavioral Impacts of China’s One-Child Policy by L. Cameron et. al. []
  7. See Empower elderly to be active participants from People’s Daily and Rise in China’s Aging Poses Challenge to Beijing from The New York Times []
  8. See Proposal to push retirement age to 65 from China.org.cn and人社部专家建议退休年龄延至65岁 from Netease []
  9. Peak toil from The Economist []
  10. See Proposal to push retirement age to 65 from China.org.cn and人社部专家建议退休年龄延至65岁 from Netease []
  11. Age-old question raises a retirement dilemma from China Daily Asia Pacific []
  12. It should be noted that this crisis did not creep up as a surprise, rather this arguably illustrates that interest groups are just as self-interested and resistant to change in the East as they are in the West.  See A Simple Solution To China’s Pension Crisis by David Li and Ling Li and Retirement Promises Prove Iffy Under Chinese Communists from Bloomberg []
  13. As counterintuitive as it may seem, under a centrally planned economy and centrally planned health care system, “too much” medical equipment could be made (e.g., oversupply due to subsidized incentives) or “too few” doctors trained (e.g., shortages due to licensing).  There is no organic pricing mechanism to tell planners what should and should not be made or trained, thus all decisions are made arbitrarily.  See Economic Calculation in the Socialist Commonwealth by Ludwig von Mises []
  14. What’s Really Wrong with the Healthcare Industry by Vijay Boyapati []
  15. Universal healthcare is within reach from China Daily []
  16. Achievements of China’s medical reform from CCTV []
  17. The Chinese Medical Device Market from Insight []
  18. See Longevity and health care expenditures: the real reasons older people spend more by Yang et.al., and Out-of-Pocket Spending in the Last Five Years of Life by Kelley et.al. []
  19. See China tobacco bigger than Wal-Mart? from CNN and 10 Facts on Tobacco and Gender in China from the World Health Organization []
  20. WHO: 80% of China Deaths from Non-Communicable Diseases from The Wall Street Journal []
  21. Mainland Outlines Plans Cut Smoking Without Graphic Labels from South China Morning Post and MPower Report Prevalence from World Health Organization []
  22. China’s Tobacco Monopoly Bigger by Profit Than HSBC from Bloomberg []
  23. Buying ‘Double Happiness’ Reveals China’s Tobacco Battle from Bloomberg []
  24. Chinese tobacco firms’ tax payments surge from Xinhua []
  25. Buying ‘Double Happiness’ Reveals China’s Tobacco Battle from Bloomberg []
  26. Public health: Where there’s smoke from Nature []
  27. This statement was not intended to diminish the severity of HIV/AIDS in Africa.  See The Fiscal Dimension of HIV/AIDS in Botswana, South Africa, Swaziland, and Uganda from the World Bank []
  28. Secondhand Smoke Kills 42,000 Nonsmokers a Year in US from LiveScience []
  29. See Out-of-Pocket Spending in the Last Five Years of Life by Kelley et.al. and Health-Care Costs Hit the Elderly Hard, Diminish Financial Wellbeing from ScienceDaily []
  30. See Elderly population to surpass 200 mln in 2013 from Xinhua and Ageing China: Changes and challenges from BBC []
  31. WHO: 80% of China Deaths from Non-Communicable Diseases from The Wall Street Journal []
  32. Buying ‘Double Happiness’ Reveals China’s Tobacco Battle from Bloomberg []
  33. For a detailed, illustrative case study on filial piety in modern China see: In China, Betting It All on a Child in College from The New York Times []
  34. One-child policy leaves bereaved parents with broken hearts from Xinhua []
  35. Monks without a temple from The Economist []
  36. One third of all Alzheimer’s sufferers live in China.  Shanghai alone has 120,000 residents with Alzheimer’s or dementia.  See China in Alzheimer’s double bind from BBC and China, in a Shift, Takes On Its Alzheimer’s Problem from The New York Times []
  37. See China to allow some foreigners to retire there from Reuters, Shanghai may be delaying foreigners’ pension scheme: report from Reuters and Six Points on Social Insurance for Foreigners by Matthew Stinson []
  38. Foreigners Set For Social Benefits from Shanghai Daily []
  39. Foreigners to get key rights from China Daily []
  40. What’s Driving Americans to Retire Abroad? Money — or Lack of It from Knowledge@Wharton []
  41. China to recruit foreign experts through Internet from People’s Daily []
  42. Foreign insurance companies in China from PriceWaterhouseCoopers []
  43. Where the state does too little from The Economist []
  44. China Life Insurance Company 2011 Annual Results from China Life []
  45. Growing pains from The Economist []
  46. The Financial Services Industry in the United States from US Department of Commerce []
  47. Insurance: Global Industry Almanac from Marketline []
  48. Foreign insurance companies in China from PriceWaterhouseCoopers []
  49. China’s Insurance Industry Faces Challenges, Regulator Says from Bloomberg []
  50. Ibid []
  51. China Firms Lose Interest in Insurance from The Wall Street Journal []
  52. Foreign insurance companies in China from PriceWaterhouseCoopers []
  53. China gets 76 bln yuan in donations for Sichuan quake from People’s Daily []
  54. County vows to correct misuse of post-disaster relief money from China Daily and Quake zone hit by yet another relief scandal from South China Morning Post []
  55. Red Cross donations not collected for 4 years from China Daily []
  56. See Businessman quits amid China Red Cross scandal from BBC, Scandal-hit China Red Cross changes leadership from China Daily, An Online Scandal Underscores Chinese Distrust of State Charities from The New York Times and Wife sacked amid graft probe from Shanghai Daily []
  57. Charity’s credibility from China Daily []
  58. Chinese charity donations fall 80 per cent from The Telegraph []
  59. See China’s Rapidly Growing Non-Governmental Organizations by Xu Ying and Zhao Litao and Chinese Nongovernmental Organizations by Amy Gadsden []
  60. PCDN []
  61. See Health damages from air pollution in China from MIT and China’s pollution puts a dent in its economy from MIT News []
  62. Some of the long-term health issues with the water pollution are that the industrial runoff (e.g., toxic chemicals) ends up downstream and because these streams are sometimes the only source for water, farmers must use it to water their produce.  As a consequence, several hundred “cancer villages” have sprung up outside of large industrial centers, where cancer rates are abnormally higher due to this runoff.  See Toxic Water: Across Much of China, Huge Harvests Irrigated with Industrial and Agricultural Runoff from Circle of Blue and China: Dirty Air, Dirtier Water? from Council on Foreign Relations []
  63. A silver lining in China’s grey skies from Reuters []
  64. Cost of Pollution in China from The World Bank []
  65. Air pollution also damages and destroys crops.  See China’s Urban Air Kills Rural Plants from Discovery []
  66. Of China’s 500 largest cities, less than 1% meets the World Health Organization’s (WHO) air quality standards.  Furthermore, 16 out of the 20 most-polluted cities globally are in China according to WHO.  And up to 40 percent of China’s rivers are seriously polluted.  Another recent estimate in February 2013 from the China Geological Survey is that 60% of ground water in Chinese cities are “severely polluted.”  See 7 of world’s 10 most polluted cities are in China: report from Want China Times, China’s Water Pollution Crisis from The Diplomat, China’s river pollution ‘a threat to people’s lives’ from People’s Daily, The groundwater of 90% of Chinese cities is polluted from Danwei, After China’s multibillion-dollar cleanup, water still unfit to drink from Reuters and Beijing Air Akin to Living in Smoking Lounge: Chart of the Day from Bloomberg []
  67. Beijing smog offers silver lining for some from Financial Times []
  68. See Beijing Air Akin to Living in Smoking Lounge: Chart of the Day from Bloomberg and Survey: Breathing bad air in Beijing like smoking 21 cigarettes from Asahi []
  69. See Hospital visits rise during Beijing’s choking smog from Agence France-Presse, Academic claims air pollution is more frightening than SARS virus from China Daily and Study: Toxic Organic Compounds Found in Beijing’s Smog from Caijing []
  70. Beijing’s air was not even the worst.  According to the Ministry of Environmental Protection, 6 out of the top 10 most heavily polluted cities were in neighboring Hebei province.  Beijing was 9th.  See Beijing ranks ninth among China’s top 10 polluted cities from South China Morning Post []
  71. Ibid []
  72. Ibid []
  73. See New in Beijing: pollution domes from Financial Times, Canned air for sale in China, as blanket of smog returns from The Sydney Morning Herald and For polluted Beijing, canned air from CNN []
  74. See Beijing’s heavy pollution a boon for air quality monitoring apps from IT World and Beijing Air Akin to Living in Smoking Lounge: Chart of the Day from Bloomberg []
  75. See Beijing Olympics Met or Exceeded Green Goals from Scientific American, A Stunning Visualization of China’s Air Pollution from The Atlantic and China’s countrymen struggling with a ‘sick’ Mother Earth from The Telegraph []
  76. China pledges $56 billion to cut air pollution from China Daily []
  77. See PM2.5 kills thousands, researchers say from China Daily and Beijing Air Akin to Living in Smoking Lounge: Chart of the Day from Bloomberg []
  78. In addition to selling “canned air” one other possibility could be to sell water purification devices like Slingshot created by Dean Kamen which purportedly can produce clean water from nearly any water source (irrespective of pollution).  See Worse Than Poisoned Water: Dwindling Water, in China’s North from International Herald Tribune, 57% China’s urban underground water polluted from Xinhua, Travellers unveil shocking truth about illegal waste water dumping from South China Morning Post, Deng Fei Launches Weibo Campaign to Share Images of Water Pollution from Tech In Asia and Dean Kamen aims to clean water, generate electricity with Slingshot machine from Engadget []
  79. China to contain increasingly severe soil pollution from Xinhua []
  80. According to Irvin Abercrombie one other limitation that foreigners should be aware of is administrative restrictions at local colleges.  For example, at one college he taught at he was informed that while he could help participate in an NGO, other foreign colleagues were asked not to participate in non-school sponsored extracurricular activities. []
  81. A work in progress from The Economist []
  82. Rural Bounty []
  83. Small U.S. Farms Find Profit in Tourism from The New York Times []
  84. The Demand for Agritourism in the United States by Carpio et al. []
  85. California farmers profit from agritourism from the University of California Cooperative Extension []
  86. Savvy farmers open the gate to agritourism from USA Today []
  87. See a list of participating farms at FarmStayU.S.  See also Cooking With Mr. Green Jeans from The Wall Street Journal and 5 common farmstay questions — answered! from CNN []
  88. Entrepreneurs turn to the land for profit from China Daily []
  89. Beijing’s ‘Crazy Bad’ Air Pollution Creates Investment Opportunities from The Wall Street Journal []
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