Chopsticks Tax?

Harold F. Schiffman haroldfs at
Wed Mar 29 13:59:33 UTC 2006

This story was taken from

Chopsticks tax
 Mar 29, 2006
By Michael L. Tan
Philippine Daily Inquirer

IN 2000, the United Nations Development Program ranked the Philippines
77th among 174 nations with the human development index (HDI), a composite
measure that looks at how nations fare in terms of economics and social
progress. That year, China lagged far behind us, ranking 99th. By 2005, we
had dropped to 84th while China had climbed to just a notch below us,
ranking 85th. These shifts in the HDI rankings should alert us to the need
to look at how China is pursuing its development, and see what lessons we
might pick up.


Two weeks ago, I wrote about how we waste so much time debating on whether
to use English or Filipino in schools as a key to national development. I
argued that the way to go is to start with local languages (Tagalog in
Tagalog areas, Cebuano in Cebuano areas) and then move on to teach
students a national language, Filipino, and later offer English and other
foreign languages as options. Priority to a national language was the
choice many countries took in our part of the world, and now theyre
reaping the benefits. Contrary to popular misconceptions, we can and
should teach the sciences and math in Filipino and local languages. That
was the way Japan progressed, as did China. Now comes news that Chinas
education ministry wants to offer English in primary schools. Their
education minister first announced that some 100 million Chinese
schoolchildren would learn English. The vice minister announced the next
day that actually there would be some 300 million children benefiting from
the English lessons.

How did the public react? Hong Kong commentators, always outspoken,
criticized the move, saying China didnt need 300 million speakers of
English. A few million would suffice, they pointed out, mainly to be able
to conduct business with the world and pick up their technology. Thats
food for thought. I know that the Philippines has a different situation,
with the way were trying to export workers and get more of the outsourcing
market, such as call centers, but Ive already written about how we need to
improve our standards not just for English but also for science and
technology, and we cant do that if we continue to have a muddled language
policy, one which has left Filipinos proficient neither in English nor
Filipino. In my last column on language, I pointed out that once we learn
to respect ourselves, especially with a national language, the world would
begin to talk with us, rather than to us. Note that even as more Chinese
learn to speak English so they can move their nation forward, people
elsewhere are now scrambling to learn Chinese. In London, 40 primary
schools have already entered into a twinning program with counterparts in
Beijing, so their students can communicate by computer and teach each
other English and Chinese. Last month, Gordon Brown, Britains Chancellor
of the Exchequer (more or less equivalent to the US treasury secretary),
visited China and said that he expects every school in Britainfrom the
primary to university levelto find a Chinese twin within the next five

Environment-friendly taxes

Let me get back to China, to another rather unique aspect of their
development strategy. Their Ministry of Finance recently announced a
package of new consumption taxes that will go into effect in April. One of
the measures calls for a new 5 percent tax on disposable wooden
chopsticks. With China producing some 45 billion pairs of chopsticks each
year, it could mean a lot of revenues. But that is not the main reason for
the new tax. To produce all those chopsticks, 25 million trees are chopped
down each year. Chinese officials recognize that there are long-term costs
for this massive use of trees, and hope that the additional tax sends a
message to people about the need to reduce their use of disposable
chopsticks.  Besides the chopsticks, wooden floor panels will also be
taxed 5 percent, again a bid to save trees. The new taxes have elicited
mixed reactions. Environmental activists are skeptical, pointing out that
chopsticks and wooden floor panels arent the main reason for
deforestation. One irreverent Internet blogsite on environmental economics
asked if a toothpick tax was in the offing.

But the new tax measure has impressed other environmentalists as a sign
that the Chinese government is seriously looking at how environmental
degradation might derail its plans for development. Together with the
chopsticks tax, China is also increasing taxes on cars with engines bigger
than 2 liters, the rate to increase from 8 percent to 20 percent. On the
other hand, cars with engines between 1 and 1.5 liters will have their
taxes cut from 5 percent to 3 percent. New taxes will also be imposed now
on various fuel products. China is now the worlds third biggest vehicle
market, after the United States and Japan. The cars account for a third of
Chinas total oil use, and is a major contributor to air pollution.

First World

The adjustments on car taxes have a strong environmental component, but
these tax reforms are also meant to reduce the conspicuous consumption
among Chinas new rich, which has contributed to growing social discontent
as the gap between the rich and the poor widens. Chinas development has
been phenomenal, but some 200 million Chinese still live on less than $1 a
day. Besides the hike in luxury car taxes, there will now be a 20-percent
tax on luxury watches. Yachts and golf equipment will now be taxed 10
percent. It looks like China is indeed serious about pursuing a
development strategy thats well described in its China Modernization
Report 2005, a study put together by Chinese experts from various fields:

China must follow a way of co-ordinately developing its industries and
agriculture, improving ecosystems in the process, adopting high
technologies along with appropriate ones and pushing forward its national
economy in line with globalization. I know that sounds like a lot of
rhetoric, but recent developments around the use of English in schools,
and the new environment-friendly taxes, do suggest the Chinese government
is serious about getting on the right track with development. What does
strike me, too, is the Chineses conservatism when it comes to projections
on their economic development. The China Modernization Report estimates
that China could become a moderately developed country by 2050, and a
developed country by 2080.

Compare all that to our President announcing, several times now, that the
Philippines will become a First World country in 20 years, if we stay on
track with her economic program, including her new taxes and now, Charter

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