by Furui Cheng | Aug 15, 2017 | News
The State Council of China released an Artificial Intelligence (AI) development plan on July 20, 2017, which aims to build a domestic industry worth almost $150 billion and positioning the country to become the world leader in AI by 2030.
There are three steps in the plan. By 2020, the Chinese government expects its companies and research facilities to be at the same level as those in leading countries such as the United States. After another five years it is aiming for a breakthrough in aspects of AI that will drive economic transformation. Then by 2030 China aims to become the world’s premier artificial intelligence innovation center, establishing the key fundamentals for a great economic power.
However, rapid development of AI solutions is not without its drawbacks. In June, Kai-Fu Lee, the chairman and chief executive of one of China’s leading venture capital firms Sinovation Ventures and the president of its Artificial Intelligence Institute, expressed concerns about the downsides of AI, particularly the potential for mass unemployment. He raised basic income as a feasible solution.
According to Kai-Fu, the AI products that now exist are improving faster than most people realize and promise to radically transform our world, not always for the better. They will reshape what work means and how wealth is created, leading to unprecedented economic inequalities and even altering the global balance of power.
He highlighted the challenges brought about by two specific developments: enormous wealth concentrated in relatively few hands and vast numbers of people out of work.
Part of the solution to the loss of jobs will involve educating or retraining people in tasks where AI performs poorly. These include jobs that involve cross-domain thinking such as the work of a trial lawyer, however, retraining displaced workers to perform these highly skilled tasks will not be feasible in most cases. There is more scope for people to occupy lower-paying jobs involving the nuanced human interaction that AI struggles to perform, such as social workers, bartenders and concierges. But here too there is a problem: how many bartenders does society really need?
The solution to the problem of mass unemployment, Kai-Fu suspects, will involve “service jobs of love.” These are jobs that AI cannot do, that society needs and that give people a sense of purpose. Examples include accompanying an older person to visit a doctor, mentoring at an orphanage and serving as a sponsor at Alcoholics Anonymous – or, potentially soon, Virtual Reality Anonymous for those addicted to their parallel lives in computer-generated simulations. In other words, the voluntary service jobs of today may turn into the real jobs of the future. Other voluntary jobs may be more professional and therefore higher-paying, such as compassionate medical service providers who serve as the human interface for AI programs that diagnose cancer. In all cases, people will be able to choose to work fewer hours than they do now.
In order to pay for these jobs, it will be necessary to take advantage of the enormous wealth concentrated in relatively few hands.
Kai-Fu Lee writes:
“It strikes me as unavoidable that large chunks of the money created by AI will have to be transferred to those whose jobs have been displaced. This seems feasible only through Keynesian policies of increased government spending, presumably raised through taxation on wealthy companies.
As for what form that social welfare would take, I would argue for a conditional universal basic income: welfare offered to those who have a financial need, on the condition they either show an effort to receive training or commit to a certain number of hours of “service of love” voluntarism.
To fund this, tax rates will have to be high. The government will not only have to subsidize most people’s lives and work; it will also have to revenue previously collected from employed individuals.”
More information at:
In Chinese:
Guo Fa, “State Council for a new generation of AI to inform development management“, Chinese State Council, July 8th 2017
In English:
Paul Mozur, “Beijing wants AI to be made in China by 2030”, The New York Times, July 20th 2017
Kai-Fu Lee, “The real threat of artificial intelligence”, The New York Times, June 24th 2017
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by Furui Cheng | Jul 30, 2017 | News
Shenzhen City
Shenzhen is one of the four current first-tier cities in China, and the other three are Beijing, Shanghai and Guangzhou. In February 2017, Shenzhen Innovation and Development Institute, a famous think tank founded in 2013, issued an “Outline of Shared development in Shenzhen”, which calls for a social dividend program in a package of reform measures.
Shenzhen is the first Special Economic Zone in China. In 1980, it was a poor rural area with 30,000 people. But now, more than 30 years later, it has a population of almost 20 million, with 11.9 million local permanent residents. Its total GDP is similar to Hong Kong, one of China’s Special Administration Regions. Shenzhen citizens’ per capita GDP was US $25,400 in 2015, and it is stepping into global middle developed cities. “The Sharing Shenzhen” is a new strategy after the previous “The Speed Shenzhen” and “The Quality Shenzhen”.
Although Shenzhen’s nominal per capita GDP is similar to that of South Korea, its per capita disposal income is only half of the latter’s. At the same time, the housing price in Shenzhen is double that of South Korea. Most people are living in substandard conditions, especially those 8 million non-permanent residents who have been totally excluded from the local social security system. Furthermore, no matter their income levels or social security levels, there are big gaps among even permanent residents. The Gini coefficient in Shenzhen per capita income is almost 0.5.
Shenzhen is thus facing a very big challenge of adjusting income structures to achieve social justice. Twenty Suggestions for “The Sharing Shenzhen Outline” include:
- One billion tax relief program, to help enterprises and people;
- To continue to raise the minimum wage;
- To raise working income and expand the proportion of middle-income workers;
- To improve the salaries and benefits of civil servants, so that the city managers can share the fruit of urban reform and development;
- To establish state-owned capital dividend fund, letting all the people share the results of reform and development of state-owned enterprises;
- To restart the “common prosperity” plan, to reduce the gap between permanent residents and the immigrants;
- To raise and expand the minimum guarantee income system, to cover the whole population;
- To expand the social assistance system to the medium income families including the immigrants;
- To establish a more equitable social security system covering the immigrants;
- To put the non-household residents into the housing security system, to achieve the safe living dream for everyone;
- To establish the welfare and service system for the elderly;
- To establish the universal social welfare and relief policies, so that Shenzhen’s warmth and sunshine can reach all children;
- To develop social charity system;
- To reduce the subway and bus fares;
- To promote equal employment;
- To promote fair education;
- To reform the expensive medical system;
- To relax the conditions of household registration, to make more people permanent residents;
- To control and reduce the high housing prices, to make young people full of hope and dream;
- All residents to enjoy the right of participation in social management and assume the obligations.
For the specific suggestion No. 5, the outline suggests Shenzhen should learn from Singapore, Hong Kong and Macau to give citizens a social dividend from the city’s fiscal surplus. In 2015, Shenzhen had 918.1 billion yuan [US $135.9 billion] total assets of state-owned enterprises, 461.6 billion yuan [US $68.3 billion] net assets, and 36 billion yuan [US $5 billion] profit. In addition to the corporate tax, the municipal government should get their net profit of 12.7 billion yuan [US $1.88 billion] per year as shareholders. Based on the average dividend payout ratio of Chinese listed companies, at least one third of the annual net profit could be distributed in cash as social dividend among all the residents. Given present figures, that would be 1,000 yuan [US $148] every two years for every resident. While this dividend might appear small, it is just a very conservative part of the net profit, and we can expect an increase in the future.
In the above description, Shenzhen is basically China’s miniature. The whole country faces similar problems and situations. So this plan captured the national attention after its announcement. Additionally, the director of the Shenzhen Innovation and Development Institute, Zhang Siping, is the former deputy mayor of Shenzhen city itself, and many councilors of the Institute are formerly from government sectors. They know the real crux of the city’s development, and they are making a fair plan out of their offices. This is another reason why “The Sharing Shenzhen Outline” is so striking in China.
In fact, China has not only local but also national state-owned enterprises, and the latter ones have much bigger profits. “The Sharing Shenzhen Outline” mentions only the former. All Chinese people could expect to get a national dividend plus a local one in the future.
More background information at:
Karl Widerquist, “SINGAPORE: Government gives a ‘growth dividend’ to all adult citizens”, Basic Income News, June 8th, 2011
Special thanks to Kate McFarland for reviewing this article.
by Furui Cheng | Jul 27, 2017 | News
Macau City
The government of the Macau Special Administrative Region (SAR) in China has announced the “Wealth Partaking Scheme 2017” (WPS), under which local permanent residents are entitled to receive a small annual unconditional basic income of 9,000 patacas [US $1,128 (1)] and non-permanent residents 5,400 patacas [US $672]. With the Administrative Regulation No. 18/2017, the scheme came into effect on 6th June 2017, and its implementation officially started on 3rd July.
Since 2008, the government of the Macao SAR has given an annual state bonus to its all citizens. The WPS 2017 is very similar to the 2016 one. This year, there are 638,600 Macau permanent residents entitled to WPS, and 62,000 non-permanent residents. The total budget for the WPS 2017 is 6,080 million patacas [US $757 million].
Recipients must have been holders of valid or renewable Macau SAR Resident Identity Cards as of December 31, 2016 to be entitled to receive the cash premium, according to a statement from the Financial Services Bureau (DSF). Holders of a valid or renewable Macau SAR Resident Identity Card who are currently residing abroad will be granted the cash premium, provided they can prove that they are unable to renew their Macau SAR Resident Identity Card due to being either bedridden or completely or partly paralyzed. Those who submitted the relevant documentation and were granted the cash premium in the previous year may be exempted from document resubmission if the Social Welfare Bureau (IAS) concludes that no new evidence is required.
A direct bank transfer will be arranged for those who are receiving financial assistance or senior citizen subsidies from the IAS, according to the statement. The same will apply to retired civil servants receiving a retirement pension and other persons receiving such a pension for the family of the deceased. Most of the rest of the populace will be awarded the cash premium through a crossed check via mail. The crossed check can only be deposited into the payee’s account. In this way, the DSF notes that even if one receives a check addressed to another, it cannot be cashed.
A different procedure applies to beneficiaries under the age of 18. They will each receive a check made payable either to themselves or their parents, which may be deposited either into the beneficiary’s account or the account of one of their parents.
In addition to the WPS state bonus, the Macao SAR government has injected an annual capital into all qualified Provident Fund Individual Accounts since 2010. Provident fund individual accounts are provided to Macao SAR residents of the age of 22, and they are used to receive the “incentive basic fund” and “special allocation from budget surplus”. No formalities are required for the individual accounts of those who are already on the list of special allocation from budget surplus, which is 7,000 patacas [US $872] for 2017. Individuals who are entitled to the allocation of funds for the first time will also be allocated the incentive basic fund of 10,000 patacas [US $1,245].
Notes:
(1) – At July 2017 exchange rates.
More information at:
Governo da Região Administrativa Especial de Macau [Special Administrative Macao Regional Government], “Plano de Comparticipação Pecuniária no Desenvolvimento Económico do Ano 2017 [2017 Wealth Partaking Scheme]”, 2017
Governo da Região Administrativa Especial de Macau [Special Administrative Macao Regional Government], “Fundo de Segurança Social [Social Security Fund]”, 2017
Paulo Coutinho, “Handout distribution starts next month”, Macau Daily Times, July 3rd, 2017
Furui Cheng, “China: Macao gives an annual state bonus to all citizens”, Basic Income News, August 31st, 2016
Karl Widerquist, “China: Macau residents to receive annual basic income”, Basic Income News, June 30th, 2015
Karl Widerquist, “Macau: Government Distributes Temporary Basic Income”, Basic Income News, August 23rd, 2014
Article reviewed by Kate McFarland.
by Tyler Prochazka | May 4, 2017 | News
Hong Kong’s newspaper of record, South China Morning Post, recently covered the surge of interest in Universal Basic Income (UBI) in the Asia Pacific.
The author, David Green, points out the positive data that has been demonstrated thus far from cash-grant experiments, such as in India.
South Korea has had interest in basic income since the “youth dividend” was implemented in Seongnam city. BIEN held its Congress in South Korea last year.
The article notes that Taiwan is seeing increased interest in the idea of basic income since the first Asia Pacific focused Basic Income conference was held in Taipei.
The headline references China’s dibao program, which is a cash-grant minimum income guarantee. The dibao has many differences to UBI as conceived by Basic Income Earth Network (BIEN). Primarily, dibao is not a universal cash-grant (dibao is means-tested and only given to those that are under the dibao poverty line).
Due to dibao’s means-tests, the article notes there are an array of issues with China’s minimum income guarantee, primarily that it does not reach the poor.
Tyler Prochazka, features editor of BI News, was quoted as advocating for China to create “special economic zones” to test a UBI.
David Green, “GETTING PAID TO DO NOTHING: WHY THE IDEA OF CHINA’S DIBAO IS CATCHING ON“, South China Morning Post, April 14, 2017.
by Furui Cheng | Apr 21, 2017 | News
Enno Schmidt. Credit to Professor Cui Zhiyuan.
On April 27th, 2017, Enno Schmidt gave a speech on basic income in Beijing. Schmidt was one of the two initiators of the national referendum on basic income in Switzerland last June. He was invited by Professor Cui Zhiyuan from the School of Public Policy and Management in Tsinghua University. The attendance was modest, composed mainly of researchers and students, including some from Poland and the Philippines.
To start, Schmidt presented some of the awareness-raising events they undertook to introduce the concept of basic income to the Swiss people, such as the ‘Everyone is a King or a Queen’ activity, the world’s biggest poster, bearing the question ‘What would you do if your income were taken care of?’ and the eight million coins dumped in front of the Swiss parliament building.
He then explained the special national referendum system in Switzerland. From collecting signatures to voting, this campaign was not about winners and losers, Schmidt underlined. Rather, democracy is a process of participating, training, learning, debating, and choosing. No matter how people ultimately voted on basic income, he highlighted, they had asked themselves the same question: ‘why’. So even though most voters rejected the basic income proposal, Schmidt argues it is still valuable to have raised the issue and ascertained public opinion.
Finally, Schmidt explained the relationship between basic income and personal life, society, economy, politics, and culture. He also gave an overview of basic income pilots worldwide. In the Q&A session, the audience had an active discussion with the speaker. For example, one question concerned the optimal scale for a basic income. Schmidt claimed that, the smaller the scale, the easier the implementation but the more limited the personal freedom. In fact, he also added, it is difficult to implement a universal basic income in large countries with varied regional development levels, like China.
Article reviewed by André Coelho and Genevieve Shanahan.
