Editore"s Note
Tilting at Windmills

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February 28, 2006
By: Kevin Drum

POTEMKIN CHINA?....Minxin Pei writes in Foreign Policy that China is headed for decay, not world domination. Tyler Cowen reduces his argument to a long soundbite:

If you are not convinced, raise your right hand and repeat after me: "China in the 20th century had two major revolutions, a civil war, a World War, The Great Leap Forward [sic], mass starvation, the Cultural Revolution, arguably the most tyrannical dictator ever and he didn't even brush his teeth, and now they will go from rags to riches without even a business cycle burp." I don't think you can do it with a straight face.

I don't have a strong opinion about this since I've read very little Chinese history, but if there's a common theme to the stuff I have read it's China's historic and recurring pattern of strong central government followed by dissolution and chaos followed by another round of strong central government, of course. Twenty-first century technology probably makes a difference in this pattern, but centripetal forces are still strong in China and it's not clear that the octogenerians in Beijing can hold it together forever. If their control ever starts to slip, some kind of USSR-style breakup seems at least reasonably likely to me and probably to them too. Thus the iron fisted control and rampant corruption that Pei focuses on.

It's funny that we don't read more about this. Op-ed pages carry pieces about China periodically, but most of them focus on economic issues: China's skyrocketing GDP, the supposed post-Mao unleashing of market forces, competition with the West for oil, the odd bit of outsourcing paranoia, fears about the growing pile of U.S. government bonds in the hands of the Chinese central bank, etc. Conversely, very few focus in any serious way on internal Chinese politics beyond things like Falun Gong and the occasional color piece on censorship in internet cafes. If we're going to spend a trillion dollars or so over the next decade on military equipment whose only conceivable purpose is to fight a war with China, it seems like a topic that should be of more than passing interest.

Kevin Drum 2:55 PM Permalink | Trackbacks | Comments (118)

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Since when have U.S. op ed pieces been a source of serious information on the internal politics of any country?

The permanent war economy thrives on and depends on the deep ignorance of the U.S. population about the rest of the world.

Posted by: Nell on February 28, 2006 at 3:00 PM | PERMALINK

It's true that China's history has been one of strong central governments followed by chaos. However, many of those strong central governments lasted for hundreds of years. Longer than the US so far. I would not get my hopes up for a collapse during our lifetimes.

Posted by: Baldrick on February 28, 2006 at 3:00 PM | PERMALINK

Some of this may be neo/con wishful thinking, but: I am hopeful for the eventual liberation of Tibet and other "republics" inside China in the vein of breakup of the USSR.

Posted by: Neil' on February 28, 2006 at 3:03 PM | PERMALINK

Same goes for India, Tom Friedman's hyper-enthusiasm not withstanding.

Posted by: lib on February 28, 2006 at 3:09 PM | PERMALINK

Although I don't think China can keep up its rate of growth..or hold things together forever...keep in mind that the regime is attempting to stoke nationalism precisely to hold things together. Combine rising nationalism and xenophobia with a growing demographic imbalance (many more single young men than women) and you end up with a witch's brew of danger. China may collapse on itself -- eventually -- but not without the potential for a great deal of harm to its neighbors (and us)...
this is one reason why close U.S. ties to India and Japan are so imperative.

Posted by: Nathan on February 28, 2006 at 3:11 PM | PERMALINK

Please, try not to remind me that the military industrial complex is greedy enough to propose spending a trillion dollars to prepare for a war with China, and that we, as citizens, are, what is the right word, ignorant? scared? zombied-out? enough to go along with it.

War with China. Why don't we just spend the 1 trillion preparing to fight Hitler?

Posted by: hank on February 28, 2006 at 3:12 PM | PERMALINK

lib:

how is India comparable to China at all? (other than in terms of population.) it does appear that India will have greatly increased import as a counterweight to China.

Posted by: Nathan on February 28, 2006 at 3:13 PM | PERMALINK

As long as they pump hundreds and hundreds of billions into our economy, by buying tbills, what do we care? Nothing could happen to stop that, right?

Viva the Bush / Red China "expansion"!

Posted by: Freedom Phukher on February 28, 2006 at 3:16 PM | PERMALINK

India is comparable to China in that they both have highly advanced economies coexisting with massive poverty and backwardness. In other words, development in both countries is limited to certain regions or cities, with the great bulk of the population living far below First-World standards.
Of course there are many differences between the two, particularly the fact that India is democratic and China is not.

Posted by: Peter on February 28, 2006 at 3:20 PM | PERMALINK

China is so large that it will be able to overcome most problems that would swamp smaller countries.

A quick incursion into the South China Sea in the vicinity of the Spratleys would give it excellent oil and gas reserves.

China could probably survive in isolation if it had to.

Posted by: davod on February 28, 2006 at 3:22 PM | PERMALINK

It's funny that we don't read more about this. Op-ed pages carry pieces about China periodically, but most of them focus on economic issues: China's skyrocketing GDP, the supposed unleashing of market forces, competition with the West for oil, the odd bit of outsourcing paranoia, fears about the growing pile of U.S. government bonds in the hands of the Chinese central bank, etc.

Repeat on supposed unleashing of market forces. After all, China is almost a democracy, so the trade issues are no problem!

But very few focus in any serious way on internal Chinese politics beyond things like Falun Gong and the occasional color piece on censorship in internet cafes.

Bad for investment. Besides, who said the wheels will come off there first? It strikes me as far more likely the US will expire/implode before China does. Hell, it might be like weal twue wuv, where the one dies (us) and then the other follows immediately thereafter (them).

If we're going to spend a trillion dollars or so over the next decade on military equipment whose only conceivable purpose is to fight a war with China

Don't repeat the R's mistake of believing your own bullshit.

ash
['That is all.']

Posted by: ash on February 28, 2006 at 3:24 PM | PERMALINK

Peter gets it. Although India may be a ripe target for American corporations seeking new customers because of its large and prosperous middle class numbering in tens of millions (with an upper bound of about 200 million, more than half of the population of USA) you have to remember that the rest of the population (~800 million) has a very horrid and miserable existence. There is no way such a country can ever become a superpower.

Posted by: lib on February 28, 2006 at 3:27 PM | PERMALINK

I think we'll have the best gauge of where China is and where it may be heading in the summer of 2008. The country will be flooded with more foreigners from a greater variety of countries than it has been heretofore in its long history. The Olympics were awarded as an incentive for China to open up. And like granting it WTO membership, China, with its appalling human rights record, has done next to nothing to deserve hosting the games. In both cases, the government has yet to show itself able to handle the modernization of the country in a reasonable manner.

Posted by: Jeff II on February 28, 2006 at 3:29 PM | PERMALINK

lib: India may be a ripe target for American corporations seeking new customers

May be, but isn't. They're far more interested in cheap highly skilled labor.

A similiar line of bullshit was used to promote more "open" (one-sided) trade relations with China. "Big new market". Uh huh. More like big new place to move our manufacturing.

Posted by: alex on February 28, 2006 at 3:32 PM | PERMALINK

ChinaLawBlog.com posted on this yesterday with a bunch of links to other blogs that posted on it. It is amazing to me how much buzz this article is generating. Why can't we just accept the that China is neither going to take over the world nor fall flat on its face?

Posted by: Dan Harris on February 28, 2006 at 3:34 PM | PERMALINK

Fully half of India's population lives in dire poverty.

India has somewhere in the neighborhood of 2500 distinct ethic groups. More than 900 languages. Many, many religions, although the majority are Hindu, Moslem and Sikh. Fracturing along ethic and language lines is apparent in many of the local states. There are dozens of separatist factions.

China's imbalances between the afluent 15% in the cities and the 85% in the countryside are even more extreme. China admitted to 78,000 protests, riots and 'other disturbances' in the last year alone centering on graft, corruption, pollution and land seizures by local Party officials in collusion with business interests.

So far only a handful of the incidents have resulted in troops firing into unarmed masses of peasants but expect more.

China's current level of environmental degradation is critical. Water is a serious crisis. Witness the recent series of chemical plant spills. Virtually every river, stream and lake is polluted to an extent that is simply appalling.

There are millions of deaths atributable to pollution and at the same time access to medical care and educational opportunies in the countryside continue to decline.

Much of China's labor force are migrants from the countryside. This is a source of instability.

China's manufacturing and other industries are almost entirely dependant on imports of raw materials, since, other than low grade coal, China has long since exhausted its own. Neither can they any longer produce enough food domestically to feed themselves.

Any large scale interruption for any extented period, say three weeks, in the supply lines coming in or the stream of goods going out could trigger widespread disruption.

You can count me among the number who could not recite Cowen's mantra with a straight face.

Posted by: CFShep on February 28, 2006 at 3:39 PM | PERMALINK

I don't see much in the article that is genuinely new or unexpected. Corrupt government officials, cronyism, bad loans, overinvestment, etc. Bad, to be sure, but not necessarily the kind of things that destroy an economic engine that has shown to be very resilient so far. There seems to be an assumption in the article that only a purely market driven economy can be really succesful, but many economies in the area disprove that idea. It's true that Chinese history has several episodes of disruption and chaos, but Chinese history is exceptionally long.

Posted by: Carlos on February 28, 2006 at 3:40 PM | PERMALINK

The breakup of the Soviet Union is probably not a good analogy to China for a few reasons.

1) Demographic. Ethnic Russians consisted of about 50% of the Soviet population, but Han Chinese consist of about 90% of China's population.

2) Tradition. The Russian Empire grew into existence and transformed itself into the Soviet Union essentially once. But China has dominated that area of the world repeatedly in history. Traditionally, the Middle Kingdom is the dominant force in Asia, who directly and indirectly control all the neighouring states. So a return to that would not be too suprising.

3) New Leaders. The transition from the octogenerian Communist party has a huge potential upside. The replacement of a corrupt group of leaders with a younger, more dynamic group. If the successors come in intending to restore the Middle Kingdom to its rightful place - watch out. In Russia, Putin has proven how steely eyed nationalist competence can achieve a lot (and that drunken stupors like Yeltsin are not so good.)

4) Hurdles already overcome. Most of that long list of tragedies and disasters list things that China has already overcome. There are clearly many more huge hurdles that China still faces (environment for example.) But couldn't that list of hurdles already overcome be inspiring too?

Posted by: Samuel Knight on February 28, 2006 at 3:44 PM | PERMALINK

The greatest tool for repression is rathcheting up YOUR benefits a teensy bit at the expense of someone else. China has a billion or so people to keep in their place. Ratchet up the benefits a tiny bit for many. Give them a sense that if they don't play ball, they will be hurtled back into the common pot of humanity. They'll cooperate.

It works here. Why shouldn't it work there?

Posted by: Jeffrey Davis on February 28, 2006 at 3:47 PM | PERMALINK

There seems to be an assumption in the article that only a purely market driven economy can be really succesful, but many economies in the area disprove that idea. It's true that Chinese history has several episodes of disruption and chaos, but Chinese history is exceptionally long. Posted by: Carlos

China does not have a market driven economy yet, and the enormous economic disparities existing between a few urban centers mostly on the east coast and the rural areas are probably insurmountable. Yes, China has a long history, and this has what it has always been - a relative handfull of people cut into the system, whatever it has been, and 99% of the people supporting it but gaining nothing from it.

There is a growing professional and technical middle class, and the numbers are potentially huge relative to other developed states. But China's (and India's) gross overpopulation will remain a drag on the country, and assures that the economy will grow only so much.

Posted by: Jeff II on February 28, 2006 at 3:50 PM | PERMALINK

and now they will go from rags to riches without even a business cycle burp." I don't think you can do it with a straight face.

Largely because they have turned around and are headed in the opposite direction, yes.

There, that was easy!
.

Posted by: Grand Moff Texan on February 28, 2006 at 3:55 PM | PERMALINK

Yes China has a long history of cyclical disentegration and re-unificiation. However the cycles take several centuries, not decades. Its clear as day that China has just finished a two century long period of disintegration and is now in the beggining of a phase re-building. Anyone who thinks the same forces that pulled China apart previously are about to re-occur is clueless about Chinese history.

Posted by: still working it out on February 28, 2006 at 4:01 PM | PERMALINK

I find China interesting, but I admit, I haven't read anything about it in a while.

Maybe, though, it's safe to say that China is Godzilla, and accordingly it has Godzilla-size fleas. Relatively speaking, they're still fleas, though.

Think of a huge steel aircraft carrier. It's heavy as hell, but it still has buoyancy.

If the U.S. is ever going to come out of it's shell and be a little less socially isolationsist, maybe China is an awesome place to kick off the interchange. Think of a China that was a capitalist democracy like the U.S., that didn't violate human rights, and that was a benign and rusted ally, like Canada. If that was the situation, I think the whole world would reap the rewards and we'd find our existence much more comfortable, w/ much more peace of mind.

Posted by: Swan on February 28, 2006 at 4:05 PM | PERMALINK

oops, trusted ally, not rusted ally!

Ack!

Posted by: Swan on February 28, 2006 at 4:07 PM | PERMALINK

Total nitpick, but where it says "centripetal forces are still strong in China..", you probably mean *centrifugal* forces. Centripetal forces act inward and hold stuff together.

Posted by: AR on February 28, 2006 at 4:14 PM | PERMALINK

This China doom is coming from free-marketeers who cannot deal with the fact that a non free market economy is doing so well. They cannot point to any particular thing wrong so they come up with vague predictions of doom to avoid dealing with the fact that their free market models are being contradicted right before their eyes.

Which country is heading for political problems?

a) The country with a Current Account Deficit of 6% of GDP and falling real wages for the last 5 years?

b)The country with GDP growing at 8% a year with rising real wages?

Posted by: still working it out on February 28, 2006 at 4:18 PM | PERMALINK

I wonder if it's possible to discuss China without resorting to semi-mystical references to ancient cycles and dynasties. I wonder if Chinese analysts make references to the Pilgrims when they discuss the U.S. is going to be in ten years, or bone up on Hugenot history before investing in French bonds. I'm being half-serious. All that history is likely more distracting than helpful in trying to figure out where China is going.

For what it's worth, I think Taiwan provides a better indication of where coastal/urban China is going to be in a couple of decades, and the rural area is going to lag by a ton, with interesting consequences.

Posted by: Drew on February 28, 2006 at 4:22 PM | PERMALINK

a) The country with a Current Account Deficit of 6% of GDP and falling real wages for the last 5 years?

b)The country with GDP growing at 8% a year with rising real wages? Posted by: still working it out

Good points, except that even 3.5% annual GDP growth is respectable for mature economies. China's growth looks wonderful only because it was starting from nothing. Pre-Deng days, China really wasn't even a part of the world economy - it had nothing to export and therefore really couldn't afford to import anything either.

Posted by: Jeff II on February 28, 2006 at 4:38 PM | PERMALINK

I wonder if Chinese analysts make references to the Pilgrims when they discuss the U.S. is going to be in ten years

Actually the pilgrims and the puritan mindset explain a LOT about the U.S.

Posted by: mg51 on February 28, 2006 at 4:41 PM | PERMALINK

It seems to me that they are rather seamlessly transitioning from communist dictatorship to iron-fisted anti-competitive corporate facists. And in the corporate world they are rather well positioned in terms of access to cheap labor and capital. Political and military leaders in China are just becoming the new leaders of an efficient military/industrial/political complex not unlike our own. I don't think there is any evidence of them losing power in the process.

From what I understand the younger generation in China has had waning interest in political dissent and a growing interest in getting their piece of the pie. It's the American dream all over again. As long as it seems remotely accessible domestic politics will remain relatively tranquil. Just a bunch of only children trying to get their due.

Bottom line, if they're headed toward decay -- so is the rest of the free trading world economy.

BTW, when did the American dream transition from working hard to make a nice life for yourself to getting lucky in the lottery to make a nice life for yourself? Am I the only one that thought it bizarre that "living the american dream" was a common theme in news stories about the meatpackers that won the lottery?

Posted by: B on February 28, 2006 at 4:49 PM | PERMALINK

China could probably survive in isolation if it had to.

actually -- i think they have to import food now because their domestic production doesn't meet the demand.

Posted by: spacebaby on February 28, 2006 at 4:49 PM | PERMALINK


I wonder whether we are too inclined to view economic success as a sort of reward for acting rightly? Sure you can list a lot of things about China that just aren't "right", but I'm not convinced that this necessarily means that its economic performance will be compromised.

One excellent book about recent Chinese history that I have read is "Life and Death in Shanghai by Nien Cheng" - a riveting account of the excesses of this era. Its amazing that a country that goes through this sort of turmoil could ever recover and prosper, and perhaps the chicekns will come to roost at some point. Or maybe history just doesn't follow the sort of moral arch we would prefer.

Posted by: Aidan on February 28, 2006 at 4:56 PM | PERMALINK

War with China? Are you nuts? Where did that doozy of a last sentence come from?

Posted by: Jones on February 28, 2006 at 4:58 PM | PERMALINK

Who has the power or the will to isolate China? Maybe 20 or 30 years ago, but we took the engagement route -- remember?

Giving international corporations access to cheap labor in China was and always will be the best way to promote democracy and human rights, just like giving cash to crackheads allows them to seek drug treatment and lowering taxes raises federal revenue.

Posted by: B on February 28, 2006 at 5:00 PM | PERMALINK

Hell. Would anyone have thought, in say the year 1500, that Britain would become the worlds great power? How and by what means? That the British would have taken control of India? Who predicted in 1900 the empire would be gone in 50 years? We cannot predict what China or India will become. Certainly all the excitement has to do with current business opportunities in Asia and not with a cool analysis of the numbers and dubious predictions of the future.

Perhaps Chinas major problems are environmental.

Some predict that within 20 years even the Yangtze will resemble the Yellow River. When you fly over the middle or lower Yangtze Valley, the sun sometimes reflects the water trapped in the thousands of ponds, lakes and paddy fields, giving a hint of how this was all once an immense swamp. Millennia of drainage work have reduced it to a network of interconnected lakes and waterways protected by dikes. Since 1949, two-thirds of the Yangtze Valley lakes have disappeared as more and more land has been reclaimed. The total surface area of lakes in the middle and lower Yangtze Valley has shrunk from 18,000 square kilometers to 7,000 in just 50 years. Jasper Becker (who knows a lot about China) in the Asia Times

The catastrophe is already unfolding in sickening detail. In a new book on China's environment, "The River Runs Black," a Council on Foreign Relations scholar, Elizabeth Economy, documents how two-thirds of Chinese cities have air quality below World Health Organization standards, by far the worst rate of any large country in the world. By some measures, at least six of the world's 10 most polluted cities are in China, including Beijing and Urumqi. Several have the highest rates of airborne carbon monoxide in the world. The country's environmental agency says that living in Chinese cities with the worst air pollution does more damage to an average Chinese person's lungs than smoking two packs of cigarettes a day.

Meanwhile, as trees are ripped out of northern and central China -- forest cover has fallen by more than half over the past two decades -- the country's deserts are expanding by several hundred thousand square kilometers per year, faster than anywhere else in the world. The government's efforts to replant tens of millions of trees have thus far proven woefully ineffective at stopping the desert's march. The Gobi Desert, which stretches across central China, has moved so close to Beijing, at a pace of about two miles a year, that its borders are less than 200 miles from the capital. Beijing is buffeted every summer by sandstorms that fill the sky and sometimes send particles drifting as far as South Korea.
Joshua Kurlantzick in the Washington Post

Posted by: bellumregio on February 28, 2006 at 5:07 PM | PERMALINK

"Centripetal" is probably not the word you were looking for, but rather "centrifugal".

Also, I would point out that China's history consists of centuries-long cycles- a time scale that dwarfs US history itself. The question is whether China is at the beginning of a cycle up or down. To be honest, I just don't know for sure.

Posted by: Yancey Ward on February 28, 2006 at 5:14 PM | PERMALINK

bellumregio- If I recall correctly, Jared Diamond had a long section about China's severe environmental challenges in "Collapse".

Posted by: MJ Memphis on February 28, 2006 at 5:19 PM | PERMALINK

perhaps the chicekns will come to roost at some point. Or maybe history just doesn't follow the sort of moral arch we would prefer. Posted by: Aidan

The chickens may have already come home to roost, and they are poxy ones at that. People speculate about the millions that would die in a bird flu pandemic. Most assuredly they will primarily be Asian.

Perhaps Chinas major problems are environmental. Posted by: bellumregio

Excellent point. They think Mexico City and Athens' air sucked. What will the Summer Games be like in 2008 if one of the sand storms that routinely plague Beijing hits at that time?

Rather than spending billions to modernize its military (one, like our own, lacking any external threats), the Chinese should be figuring out how to keep the western deserts from migrating east.

Posted by: Jeff II on February 28, 2006 at 5:19 PM | PERMALINK

Swan "rusted" ally. We tell jokes about the Canadian Navy being two guys in a canoe.
The divvying up of defence responsibilities after WW II gave Canadians undercover work that was only disclosed as recently as 1995. That same timeframe encompassed a phenomenon more relevant to this thread.
Citizens of Hong Kong set up shop in Vancouver, B.C. at steep personal cost because of their city reverting back to China. It wasn't too long before many of them had made the stunning decision to risk "Red" China in preference to oppressive Canadian government policies - taxes and regulations.

Posted by: opit on February 28, 2006 at 5:32 PM | PERMALINK

'centripetal' is just as logical in that sentence, if his intention were to mean that the octogenarians have been loosening centralized control by liberalizing areas of the economy, whereas they might, given Chinese historical patterns, be replaced by autocrats.

Posted by: cld on February 28, 2006 at 5:41 PM | PERMALINK

Citizens of Hong Kong set up shop in Vancouver, B.C. at steep personal cost because of their city reverting back to China. It wasn't too long before many of them had made the stunning decision to risk "Red" China in preference to oppressive Canadian government policies - taxes and regulations.
Posted by: opit

Got any figures? Because BC in particular saw an enormous influx of primarily wealthy Chinese fleeing Hong Kong before the take over. While few of the dire economic consequences of the reversion to Chinese control have befallen the colony, to be sure personal freedoms are a shadow of what they were under British control. My guess is that the overwhelming majority of Chinese who left the colony for Canada have stayed there.

Posted by: Jeff II on February 28, 2006 at 5:41 PM | PERMALINK

An excellent method to totally screw up China would be for the US to work at forcing Taiwan to re-integrate with the mainland. That would remove the immediate rationale for the military expansion, which would cause the military to turn itself inside out trying to shore up its power through its business investments, leading to the development of pro-military/pro-business political organizations and 'think tanks' inevitably resisting governmental interference with their right to pollute, exploit and swindle.

Posted by: cld on February 28, 2006 at 6:05 PM | PERMALINK

USSR-style break-up is not in the cards for China. The country is much more homogenous than the USSR ever was, and areas that might dream of breaking away (i.e., Tibet, Xinjiang) do not have the infrastructure, economy, or population numbers to pull it off. What is most likely is widespread social unrest between "capitalists" and rural interests, as we have recently seen. This unrest could escalate to the point of destracting the central government from successfully grabbing the "gold-ring" of global superpower status.

Posted by: Dave on February 28, 2006 at 6:27 PM | PERMALINK

Citizens of Hong Kong set up shop in Vancouver, B.C. at steep personal cost because of their city reverting back to China. It wasn't too long before many of them had made the stunning decision to risk "Red" China in preference to oppressive Canadian government policies - taxes and regulations. Posted by: opit on February 28, 2006 at 5:32 PM

Wow, the Canadian wing nuts are funnier than the American ones!

Posted by: Dr. Morpheus on February 28, 2006 at 6:28 PM | PERMALINK
If we're going to..., it seems like a topic that should be of more than passing interest.
Sure. Public education on the issues. But in that same vein, if we're to be engaged militarily and politically in Iraq, the cesspool of the Sunni/Shia divide, you'd think our public might have more than a passing interest in the background of that Sunni/Shia divide? Three years in, how many History Channel shows have you seen about Ali or Hussein? Then how many about Hitler (but not Japan, unless it's VJ day) or about some friggin tractor that did strip mining in the 1930s and was four stories tall (golly! wow!).
Posted by: bubba on February 28, 2006 at 6:34 PM | PERMALINK

I'd also like to add that I have over a half-dozen clients in Canada and I speak with several of them on an almost daily basis.

Funny that over a period of two or three years not one has mentioned "oppressive taxation". Not even once and we've talked about Canadian taxes on several occasions.

Posted by: Dr. Morpheus on February 28, 2006 at 6:34 PM | PERMALINK

The big threat ro us is that China's rapidly expanding industrial economy is going to provide a huge market for Middle Eastern and Venezuelan oil. The oil-producing states are going to be in position very soon to tell the USA to fuck off, and just sell their oil to China and Russia.

Posted by: global yokel on February 28, 2006 at 6:35 PM | PERMALINK

Could someone enlighten me on a point?

China has become a very desirable place to do manufacturing -- and it's also now starting to do some pretty high end "intellectual" work in some of its labs and universities.

India does a pretty good job at the higher end work, and is probably distinctly more dominant there (perhaps in part because English is spoken in India).

But why is no manufacturing, at least that I know of, taking place in India? Is it a class thing, in which the lower classes are just too uneducated, or what?

Posted by: frankly0 on February 28, 2006 at 6:57 PM | PERMALINK

The big threat ro us is that China's rapidly expanding industrial economy is going to provide a huge market for Middle Eastern and Venezuelan oil. The oil-producing states are going to be in position very soon to tell the USA to fuck off, and just sell their oil to China and Russia. Posted by: global yokel

First of all local yokel (your post shows that "global" is an undeserved conceit), Russia is an oil and gas exporter. And as long as their economy remains as moribund as it is today (and nothing indicates this will change even in my grandchildren's life time), they will continue to sell their surplus into the world market.

Oil prices are set globally by this thing called supply and demand. The ME and Venezuela have to sell their oil, and they do so the highest commodity brokers and refining bidders. The price may go up a bit for crude if we have to get it from the spot market or other intermediaries, rather than buying it directly from Venezuela (where most of our oil comes from now, along with Canada). However, none of the crude suppliers can withhold supplies from the market for too long without hurting themselves as well.

Remember, we are the biggest consumer of crude oil in the world. If you don't sell to us at all, that's cutting your market by about 25%. Not real smart business, as the Chinese need us to be able to continue to live the lifestyle we already can't afford.

Posted by: Jeff II on February 28, 2006 at 7:10 PM | PERMALINK

I found the article in Foreign Policy pretty unconvincing. It struck me as more propaganda than analysis.

The basic idea seemed to be that China was certain to go into a tailspin because it was, in case you hadn't noticed, Communist.

It doesn't seem to have occurred to the author to contemplate the possibility that the state owned portion of China's economy might naturally recede as the private owned portion grows at its own speed -- which is probably what's taken place so far.

Who would have predicted that China's rulers would have allowed the private sector to grow as it has so far? Why expect that they're certain to put a stop to its growth some time in the near future?

Posted by: frankly0 on February 28, 2006 at 7:33 PM | PERMALINK

This reminds me of one of my favorite day dreams:

What would happen to Wal Mart's sales if all its merchandise said "Made in Communist China" instead of "Made in China"?

Posted by: Cal Gal on February 28, 2006 at 7:38 PM | PERMALINK

>actually -- i think they have to import food now

In 2005 we went from a net exporter to a net importer, too. Didn't you notice the Times front page.. uh, the front business page... uh, the back of your regional business section... uh, that little rural paper that mentioned it when you were on vacation?

Yeah, might have been in there.

Now of course this isn't really a problem, as we produce plenty of calories per capita we're just a bunch of fatasses. (We have starving people but they are way outnumbered by the obese).

But it is interesting.

Posted by: doesn't matter on February 28, 2006 at 7:45 PM | PERMALINK

Who would have predicted that China's rulers would have allowed the private sector to grow as it has so far?

Not the people who believe the PRC is ruled by "octogenarians." Mao and Deng are long dead, Hu Jintao is considered 'fourth generation leadership' and is only four years older than our current incumbent chief executive.

Posted by: Dustbin Of History on February 28, 2006 at 7:46 PM | PERMALINK

Puh-lease! Pei and Cowen are whistling past the graveyard. Despite having some severe internal problems to overcome, the Chinese have one giant trump card -- they have a culture that produces some of the best negotiators anywhere. They're total realists and will use whatever lever they can to finagle a better deal. I've watched again and again as Westerners are either outsmarted, or just plain flummoxed, by their Chinese business counterparts. My theory is that the lack of a consistent and reliable rule of law over the past few centuries has forced the Chinese to adopt an extremely aggressive zero-sum approach to business (and politics). Anyone who bets against the Chinese is nave in my book.

--Beo

Posted by: beowulf888 on February 28, 2006 at 7:57 PM | PERMALINK

I was taking a class with Jonathon Spence when the news came out that a bunch of Chinese "experts" gave China a 50% chance of breaking up within 5 years.(Spence poo-poo'd it.) That was over ten years ago.

The thing about Chinese is that they are very inclusive. Third generation Americans of Chinese descent are still considered "Chinese." (Unlike Japan, where merely becoming famous internationally will cause them to disown you.) China has a lot more societal stickiness than many other places.

India is peculiar. They are some of the most chauvanistic (in the French sense) people around, according to the polls. But they have some deep and embittered ethnic schisms.

Posted by: mcdruid on February 28, 2006 at 8:19 PM | PERMALINK

Any serious discussion of China would start -- and probably end -- with the amount of bad debt carried by Chinese banks. That, as I'm sure you'll all recall, was a problem that sent Japan's rocketing economy into a 15 year economic stagnation. Reports on that front are not positive.

And the reasons for the problem are obvious to critical eyes. There is a 300 million person middle class that has sacrificed political freedom for economic growth. Any disruption in that growth will likely cause a serious rethinking by this increasingly large, sophisticated and vocal population who have participated in the single largest migration of people in world history. 300 million disaffected Chinese is a rather daunting prospect even for the 80-somethings in Beijing and they are doubtless aware of the bad debt load -- and Japan's experience.

To what does that lead? A central government unable to allow the normal business practices of banks (writing off bad debt) to handle the problem before it becomes a crisis. Falter of any variety will lead to a rethinking of foreign investors that will hasten the downward spiral.

But hey, Thomas Friedman thinks the world is flat and China will eclipse the US. So party on Wayne. Party on Garth. (But you wouldn't want to be the Party official who breaks the news to the higher-ups.)

Posted by: Birkel on February 28, 2006 at 8:19 PM | PERMALINK

Frankly0 writes:
"Who would have predicted that China's rulers would have allowed the private sector to grow as it has so far? Why expect that they're certain to put a stop to its growth some time in the near future?"

No, there's ZERO chance that the Zhongguo Gongchandang Zhongyang Zhengzhiju (Chinese Communist Party Politburo) will kill the goose that lays the golden egg. Especially when it's clear that the political leaders of China all have many fingers in their capitalist pie. No, the Chinese "Communists" are better capitalists than most Westerners. Among the members of the Politburo can be found some of the most adept capitalists around, but they are more like the capitalist 19th Century robber barons than the tame, country-club, boardroom capitalists of the US.

I say this in grudging admiration. Too bad the bozos in Whitehouse and Congress aren't in their league -- instead we have a failed CEO of an small-time oil company and owner of termite extermination outfit calling the shots on our trade policy.

--Beo

Posted by: beowulf888 on February 28, 2006 at 8:20 PM | PERMALINK

Some of us have been talking about these sorts of problems. I wrote a piece in the LA Times last December on the upsurge in rural discontent and violence. You can read it on my site here:
www.uselesstree.typepad.com/useless_tree/2005/12/why_there_will_.html

Posted by: Sam on February 28, 2006 at 8:23 PM | PERMALINK

My theory is that the lack of a consistent and reliable rule of law over the past few centuries has forced the Chinese to adopt an extremely aggressive zero-sum approach to business (and politics). Anyone who bets against the Chinese is nave in my book.
Posted by: beowulf888

I don't believe that most people are betting against the Chinese. However, there are still huge "internal contradictions," as a good Marxist might say, with the way China's economy and society are evolving.

There will be problems over the long run with 90% of the population currently living under Third World conditions. The Chinese state does not collect enough reveue to do much to improve the lives of the majority of the Chinese living outside the economic sphere of the relatively few urban areas that have benefited from the economic liberalization allowed to date, nor does it seem much interested in doing so.

As China has urbanized and industrializes, it has lost the ability to feed itself, though food security is a potential Achilles heel for a lot of nations.

China's vast labor pool is its only comparative advantage right now. Who's to say that this won't shift to India in a decade? Otherwise, the economy needs more imported inputs than even Japan, the U.S. or most of the E.U.

If the yuan were allowed to float, you'd see a recession in China.

China's water and air are badly polluted, and there seems to be little urgency in addressing this. China is a nuclear power but seems to have no interest in using nuclear energy (as problematic as that is in the long run) rather than coal.

China is already an economic power to be reckoned with. But it must continue to liberalize and decentralize if it is to prosper over the long run. Excessive state interference in the economy, the lack of transparency, laws, binding contracts, and rampant corruption can't be tolerated at current levels over the long run.

Posted by: Jeff II on February 28, 2006 at 8:24 PM | PERMALINK

(Unlike Japan, where merely becoming famous internationally will cause them to disown you.) China has a lot more societal stickiness than many other places. Posted by: mcdruid

Yeah. Just like what happened to Ichiro. What nonsense.

The Chinese have lots of internal problems. Some 90% of the population may be Han, but even within this group there are ethnic and linguistic separations. Then there is Tibet, the predominately Muslim areas in the SW, and all the areas that border on Indo-China to the south. China, as has been said for a century now, is more a culture than a country.

There is a 300 million person middle class that has sacrificed political freedom for economic growth. Posted by: Birkel

Where in the world did you get the idea that nearly a 1/3 of Chinese are "middle class"? Try 15% of the population, and that's at a national standard lower than even Taiwan's or S. Korea, and no where near Japan's, the E.U. or U.S. in terms of security and material wealth.

Posted by: Jeff II on February 28, 2006 at 8:41 PM | PERMALINK

Jeff II,
Okay, fine -- 15%.

Where in the world did you learn that there are 900 million Chinese?

Posted by: Birkel on February 28, 2006 at 8:43 PM | PERMALINK

Jeff II makes some excellent points. I agree with everything he says. The "internal contradictions" he lists will definitely force "readjustments" in the farily near-term. However, I still wouldn't bet against China. Bad debt? Exchange rate games? If they fail, well, the outlook is grim for the rest of the world, as well. Considering that China is buying up our national debt, owning our debt gives them an extremely powerful hold over the economic and political behavior of the US.

I'm sure these guys have thought all their moves out in advance...

--Beo

Posted by: beowulf888 on February 28, 2006 at 8:46 PM | PERMALINK

1.307.560.000 X 15% ~= 200 million.

So my idea that it was close to 20% of Chinese who are middle class was just as good as yours that 300m/1.3b = 1/3, no?

Now, would you care not to be so niggling?

Posted by: Birkel on February 28, 2006 at 8:46 PM | PERMALINK

The permanent war economy thrives on and depends on the deep ignorance of the U.S. population about the rest of the world.
Posted by: Nell on February 28, 2006 at 3:00 PM

Pretty much sums up what I was gonna say.
The Media makes a few Racist or Religious remarks, rattle the cage a bit.. And Waa Laa!
The MSM Monkies have gone War Wild.


Posted by: mr ho on February 28, 2006 at 8:49 PM | PERMALINK

Is there any way we can trip up those transitions so they DO cause China to fragment? I mean, with loose nukes and then owning so much of our debt (hey, if they dissolve do we get a + because our creditor is gone thus no one to pay the bills to so no more bills?) do we even have the leverage to shatter them?

That said, this time is different because this time the west and those who see China as a threat will be aware of the breakup. We (various nations) can pursue policies and alliances that establish the various resulting states of China in their own right and try to cultivate the idea that staying seperate is in their own best interests. We can't force them apart, but we can make them not want to get back together, at least, I hope so.

Posted by: MNPundit on February 28, 2006 at 9:06 PM | PERMALINK

There's plenty out there.

1. China does not have to develop all the way to first world standards to dominate the world. If they hit the development levels that many one-party states reached with 1.2 billion people.
They'll be an economic gorilla twice the size of the US.

2. Increasing demonstrations, largely made up of
protestors against local government claiming rights under federal law.

3. They are forming a legal system including courts. They have a communist party congress which is a defacto parliment by elected only by the party.

4. No one knows for sure how the party picks its leaders. Somekind of internal election dominated by Shanghai or Beijing is likely.

5. The party is very small relative to the entire population (

6. No one thinks modernising workers are the same as yesterday. Some changes are coming over the next ten years. An evolution into one-party democracy is more likely than a dissolution into Chaos. It works fine in many Asian societies.

7. Chinese who make reference to history, tend to think on a bigger scale. Chinese dynasties do best under central power, collapse under corruption then suffer before they reform. Trends in modern history are kinda 'who cares'.

Posted by: McA on February 28, 2006 at 9:08 PM | PERMALINK

But why is no manufacturing, at least that I know of, taking place in India? Is it a class thing, in which the lower classes are just too uneducated, or what? frankly0

Post-industrial all the way... They might just skip the industrial stage.

English language skills, excellent higher education, free press. A philosophical worldview that can offer some justification for poverty (whether you agree with it or not). Compare that to China where getting rich is the only religion - where does that leave the 100 million unemployed labourers? There is no philosophical justification for their poverty - they are simply being screwed by the system - and they know it. Social unrest is a serious problem in China. More than the outside world realises.

India is also are self sufficient in food, while China is forecast to need the vast majority of the world's surplus in the future just to feed itself.

They are also self-sufficient in technical know how - both the new carrier they are building (first of 3 carrier battle fleets) and the probe they are sending to the moon by the end ofr next year are entirely Indian designed and manufactured.

And the Indian government is forecasting a 10% growth rate this year.

Posted by: floopmeister on February 28, 2006 at 9:21 PM | PERMALINK

Post-industrial all the way... They might just skip the industrial stage.

But what does that leave for the uneducated?

Posted by: frankly0 on February 28, 2006 at 10:06 PM | PERMALINK

floop, the indian government seems to be always forecasting 10% growth, but never achieving it. =P

india is great and all, but we can't sustain a 10% growth rate unless our population growth falls into negative counts. and that ain;t happening for a long time with half the population under 25 and insane rate of urban migration.

Posted by: almostinfamous on February 28, 2006 at 10:06 PM | PERMALINK

一治一亂

Dat's Chinese for "historic and recurring pattern of strong central government followed by dissolution and chaos followed by another round of strong central government, of course." Concise, no?

Posted by: godoggo on February 28, 2006 at 10:08 PM | PERMALINK

frankly0

this year's budget(announced yesterday) is supposed to be all about the "common man", who is poor, undereducated and lives in a village

Posted by: almostinfamous on February 28, 2006 at 10:09 PM | PERMALINK

I suspect that the new Chinese capitalist plutocrats -- and the large chunk of the ordinary population who are now intoxicated with money and investing like crazy -- will be completely disoriented at the first major and ultimately inevitable downturn in the business cycle. The problem is that the Chinese have limited experience with this kind of thing, which means that they have none of the safety nets that Western nations have built in through long sad history. When it happens it will be really painful, worse than anything that has happened in Japan recently. My in-laws (in Sichuan province) are ordinary people and they are buying stock in Chinese companies like mad. They think the whole thing is a guaranteed money-printing machine, and they have no sense at all that things could ever go the other way. Money and conspicuous consumption are the route to major "face" in China now, even in semi-remote medium sized cities. Everybody wants to be entrepreneurial.

I have nothing useful at all to add to discussion of India, they may be different.

Posted by: Ba'al on February 28, 2006 at 10:12 PM | PERMALINK

We shouldnt speak so ill of our bankers, Kevin. However, I wouldnt be so sure about political repression being Chinas undoing. What might end up being their demise are the serious, serious environmental challenges they face. We in the West get only small glimpses of how badly their environment is being compromised by unchecked 10% annual growth remember the story about the contaminated frozen river? I think it will be thawing out soon. More to come on that.....

Also, I have a friend who traveled over in China recently and he said there are cities in the western part of China where people wear WWI-issue gas masks, due to the soot and particulate matter in the air from burning wood and high-sulfur coal! Not a good situation. But, of course, the right-wing hawks in our government (and a few Democrats calling Joe Lieberman) will undoubtedly use the bogeyman of China and their growing global influence, to push for new nuclear weapons and the militarization of space among other things and our descent into the abyss will accelerate. Count on it.

Posted by: Stephen Kriz on February 28, 2006 at 10:17 PM | PERMALINK

MNPundit

Do not be afraid of a united and econonmically improved China. It is good for our country, not bad, and it certainly enhances the odds of world political stability. What you are hoping for is not really in the interests of the US.

Posted by: Ba'al on February 28, 2006 at 10:18 PM | PERMALINK

But what does that leave for the uneducated?

Same as there ever was, I'm afraid. Strangely enough, the Indian state with the highest literacy rate (95+% percent) is Kerala, which has been ruled on and off by the Communists since Independence.

There is immense poverty in India, many hundreds of millions. But there are many hundreds of millions who are well educated and well fed. Is the poverty in India, how ever poorly justified by caste, any more hypocritical than a nominally Communist country, supposedly dedicated to equality of wealth distribution, in which the rich cities are all but walled off from the poor country?

Don't forget there are more than 30 million people living in poverty in the US (if I remember correctly). That's approaching twice the population of my country Australia. What does 30 million mean?

Posted by: floopmeister on February 28, 2006 at 10:26 PM | PERMALINK

Tibet, Xinjiang province and Inner Mongolia are not traditional parts of China, but they ahve been on the fringe and heavily influenced by Han Chinese culture for a long time. The Han Chinese now represent the majority population in all of those areas (through not so nice government policies that are a sneaky and somewhat less toxic form of ethnic redistribution that comes close to cleansing).

China did not fragment at the turn of the last century, a really dark time in their history, so they are not going to fragment now, no matter what happens. If you are hoping for that, it's not going to ever happen. As for WHY you might be hoping for that, it escapes me completely, it would not be helpful to this country in any way.

Most of the Chinese I know are rather like the readers of this blog -- they are not big fans of their own government (and I know more Chinese than 99.9% of Americans). They also love their country, and even the liberal ones see a sort of manifest destiny in their own part of Asia.

The Chinese I know in China (many) do not regard the US as an enemy. They think they can do many of the things we do in the not too distant future. They are not aware of the pitfalls.

Posted by: Ba'al on February 28, 2006 at 10:29 PM | PERMALINK

but we can't sustain a 10% growth rate unless our population growth falls into negative counts. and that ain;t happening for a long time with half the population under 25 and insane rate of urban migration.

Yeah, you're right there. The flipside of uncontrolled Indian urban migration is walking through Beijing, without seeing any of the poverty you'd see in Washington (beggars, etc). That's because urban residency is controlled by the authorites. No job; no staying in the big city.

India doesn't exercise that sort of control over its population.

Rajiv Gandhi tried draconian population control measures, but they didn't go down so well with people ;)

Posted by: floopmeister on February 28, 2006 at 10:31 PM | PERMALINK

Floopmeister's comment about the cities in China being all but walled off from teh country economically is a really good description. I am going to borrow it.

My wife tells me that not too long ago, you needed something akin to a visa to move from one part of China to another, even for a visit. And this "visa" was really tough to get. As was a passport.

Posted by: Ba'al on February 28, 2006 at 10:35 PM | PERMALINK

How many people commenting on this topic have been to China?

I have. My wife is Chinese (from Harbin). Her family comprises doctors, lawyers, government officials, mid-level military types, professors, teachers, and etc, and they live all over the country - Beijing, Nanjing, Harbin, Souzhou, Guangzho, Shanghai, Darien, Qindao...

Have you folks been to any of those places? Have you seen the building? The new metro lines, the new shopping areas? The literally thousands of new homes, apartment complexes, businesses?

Hyperventilating prognotications about the imminent collapse of China are laughable.

Problems? You bet. Big ones - environment, corruption, city/country disparities, education, health care, and so on. (Sound familiar???)

But collapse? no way.

As for the "octogenarian" bit? How old are Hu Jintao and Wen Jiabao? Their allies? The regional governors? Hardly octogenarian...more like half that.

The screed you quote reads like the rantings of a scared and petulant child, desperate to distract attention from his own misdeed and problems by exaggerating the problems of others.

Oh, and like the stock market, past behavior is no indicator of future performance.

Posted by: RedDan on February 28, 2006 at 10:41 PM | PERMALINK

China will drown in its own wastes before the turn of the century unless they switch away from coal soon.

The dust storms reach beyond South Korea all the way to southern Japan every year. I live in northern Kyushu and get to clean yellow dust and sand off my car nearly every day for two months every spring.

The glaciers at the sources of both the Yangtze and the Yellow rivers will be gone soon. This will worsen desertification, urban water shortages, and intensify water contamination.

It's been nearly five years since China switched from a net exporter to a net importer of rice (with imports increasing every year since). Compare that to US wheat and corn production. It is not merely that demand has risen (though it has) but also that production is dropping (and some of that drop is irreversable).

They are accelerating a freight train toward a collapsed bridge just around a (for them) blind curve. Governmental instability will be the least of their (and our) concerns.

Posted by: joe on February 28, 2006 at 10:41 PM | PERMALINK

I've been wondering how much of the new building in China was created without bribing the safety inspectors.

It puts me in mind of the cityscape of New York in the late 19th and early 20th centuries. They put up a lot of very tall buildings really fast, and nearly all of them were replaced within thirty years, and it wasn't just because the real estate was so valuable.

Posted by: cld on February 28, 2006 at 10:46 PM | PERMALINK

Red Dan,

Do you remember how wonderfully everything was in Japan circa 1988? And bad debt pushed the Japanese into a 15 year stagnation in spite of the fact the Japanese were buying US debt -- not to mention Rockefeller Center in NYC.

But you're right. China's got no worries.

Posted by: Birkel on February 28, 2006 at 10:52 PM | PERMALINK

It was supposed to read "how wonderfully everything was going in Japan" but never quite got there.

Whoops.

Posted by: Birkel on February 28, 2006 at 10:55 PM | PERMALINK

Have you folks been to any of those places? Have you seen the building? The new metro lines, the new shopping areas? The literally thousands of new homes, apartment complexes, businesses?

I lived and worked in Guangzhou for a year or so, and my brother is married to the daughter of a high ranking PLA officer (runs a missile base north of Beijing, apparently, but we don't talk about that much...)

My bro's lived there for about 10 years - worked for the Australian consulate among other things. I was last there in may for theit wedding in Beijing.

Whilst I don't believe that China will be collapsing any time soon, I do know that once you leave the cities the wondrous modern face of China does change somewhat.

South of Kunming, in Yunnan, you can see the poor farm boys lining up at the provincial bus stops to head into the cities to find construction work. The PSB gets on those buses and checks the permits - no permit, you get off that citybound bus. Still, the kerbs in Kunming and Guangzhou were full of guys hanging around, waiting to get construction work. There's a reason China consumes so much concrete - they keep building to keep people employed. Shenzhen and Zhuhai, just north of Hong Kong and Macau respectively, used to be the most productive agricultural land in China. Now they look like the Gold Coast in Queensland.

Oh, and that line about walling off the cities? It's not a flippant one. The mid-level managers I was teaching in Guangzhou wanted a phsyical wall built around that city. Guangzhou's a bit of a special case, as it's the hotbed of a truly ferocious capitalism, but there was a wall around Hong Kong last time I looked.

Posted by: floopmeister on February 28, 2006 at 10:57 PM | PERMALINK

For the record, I doubt the Chinese government will collapse. I do expect pollution combined with water and food shortages to devistate the rural population on a scale rivalling 'the great leap forward' though.
How this tragedy will be played out in the geo-political/economic arena is anybody's guess.

Posted by: joe on February 28, 2006 at 11:00 PM | PERMALINK

Birkel,
Japan's recession was caused by deregulation of the banking industry (in the early 80's) that instigated history's biggest real estate bubble. This was then compounded by a neo-con overhaul of the tax system that transferred the burden of taxes from income to sales which killed three recoveries in a row (every time the business cycle started to turn around the LDP would initiate another cut in income or investment related taxes while raising the consumption tax).
China's current situation has no relationship to this at all.

Posted by: joe on February 28, 2006 at 11:12 PM | PERMALINK

Joe,
Your use of the term "neo-con" in a description of Japan's banking woes is sadly misplaced and belies an underlying ignorance. Unfortunately that ignores bubbles through your unfortunate mis-rememberance of events.

Best of luck with the history lessons.

Posted by: Birkel on February 28, 2006 at 11:21 PM | PERMALINK

The most overlooked and most important part of the situation in China is food production and distribution.

Posted by: Kiril on February 28, 2006 at 11:28 PM | PERMALINK

Yeah, you're right there. The flipside of uncontrolled Indian urban migration is walking through Beijing, without seeing any of the poverty you'd see in Washington (beggars, etc). That's because urban residency is controlled by the authorites. No job; no staying in the big city.

Oh, they're there, floop. But not in the center of the city. They're off in the industrial suburbs, squatting in ex factory buildings of moribund SOEs. There are estimated to be several million undocumented migrants in Beijing without official residency permits.

But, yes, they keep them out of the central district. And as they build out for the Olympics, they're kicking them further and further away. And, unlike most countries in the world, they do build huge quantities of public housing, which meets at least some of the need by the people they're kicking out of the gorgeous but unlivable old hutongs they're demolishing just as fast as they can.

Posted by: brooksfoe on February 28, 2006 at 11:33 PM | PERMALINK

Whilst I don't believe that China will be collapsing any time soon, I do know that once you leave the cities the wondrous modern face of China does change somewhat.

Sure, floop. But you have to ask what it looked like 40 years ago, and whether people feel things have improved or deteriorated.

I just read Mike Davis's new book "Planet of Slums", and in an otherwise fascinating book he occasionally lets slip a few off-the-wall howlers. One of these was the gloss that China had "exchanged Maoist stability" for capitalist profit, but also uncertainty and instability. I had to smack my head. For what period of time was Maoist China "stable"? The '50s famine? The Great Leap Forward? The Cultural Revolution? The Gang of Four? That takes us right up to Deng.

Posted by: brooksfoe on February 28, 2006 at 11:39 PM | PERMALINK

It's been nearly five years since China switched from a net exporter to a net importer of rice (with imports increasing every year since). Compare that to US wheat and corn production. It is not merely that demand has risen (though it has) but also that production is dropping (and some of that drop is irreversable).

Good news for rice producers in Vietnam, Thailand, Indonesia and ultimately Africa. So?

Posted by: brooksfoe on February 28, 2006 at 11:42 PM | PERMALINK

Your best bet on a rival and ally to balance China is India or South East Asia (Thailand + Vietnam).

Something funny about India thought, its manufacturing/agriculture always sucks from regulation.

Someone pointed out the booming sector (IT) is the unregulated sector too complicated to regulate initially and now protected by the IT lobby from regulation.

China's food dependence is notable as is its oil dependence. One reasons why China won't really pull back from Globalization. What's more dangerous from a security viewpoint, someone owning your bonds or someone owning your food supply?


Posted by: McA on February 28, 2006 at 11:43 PM | PERMALINK

Hey floop...

I can generally agree with what you are pointing out...no one - especially not my family and in-laws - denies that there are some serious problems that need facing up to and dealing with.

The question for the millenialist apocalypse preachers is simple:

What makes you think that the Chinese people and Chinese government do not recognize those problems?

What makes you think that both parties have no interest in solving those problems?

What makes you think that their instabilities are any more or less damaging or dangerous than our own?

Enough with the doom and gloom, and stop trying to distract from the real issue, which is the fact that the US is led by a brain-dead moron being manipulated by a cabal comprised of people who combine incredible stupidity, incredible hubris, and amazing abilities in the area of fucking up royally. Our nation is mired in a civil war of our own making in a critically important and extremely volatile region. Our bank is breaking, our military is breaking, and our allies are deserting us in droves both financially and philosophically - and for good reason.

Pay attention!

Attend the beam in your own eye before pointing out the mote in China's.

Posted by: RedDan on February 28, 2006 at 11:45 PM | PERMALINK

...they do build huge quantities of public housing, which meets at least some of the need by the people they're kicking out of the gorgeous but unlivable old hutongs they're demolishing just as fast as they can.

Yeah, I heard they're demolishing 10,000 hutong a year. I do get your point, and I'm not a fan of Westerner thinks it's terrible that country X is moderning because there's less 'character' when he/she comes to visit.... Undoubtably life is better in the new apartment blocks.

But there have been some very nasty riots over land reclaimation schemes, even within the Beijing municpality. That's uncomfortably close to the heart of power.

For the record, I think that Kunming is the Chinese city that has got modernisation 'right' (seems to have fairly switched on planners, just from walking around the place) while Guangzhou is an organic noodle soup nightmare.

I just read Mike Davis's new book "Planet of Slums"

Want to read that - any good? Is there much about Mumbai? The fascinating thing about the slums of Mumbai is the grading of slums standards: many slum dwellers in the 'better' slums are white collar professionals (accountants, etc). The land cost in Mumbai is just too expensive.

What makes you think that the Chinese people and Chinese government do not recognize those problems?

Actually I think the Chinese government is doing an amazing job of balancing the various issues - nothing short of miraculous. Like I said, I don't see China 'collapsing'. If you will, I just think that the 'China soon to take over world' hype is a little to, well, hyped.

Enough with the doom and gloom, and stop trying to distract from the real issue, which is the fact that the US is led by a brain-dead moron being manipulated by a cabal comprised of people who combine incredible stupidity, incredible hubris, and amazing abilities in the area of fucking up royally. Our nation is mired in a civil war of our own making in a critically important and extremely volatile region. Our bank is breaking, our military is breaking, and our allies are deserting us in droves both financially and philosophically - and for good reason.

No shit. I've said this many times myself.

Pay attention!

Attend the beam in your own eye before pointing out the mote in China's.

RedDan: I'm not American. I'm here because I am paying attention. In fact, I been criticised royally for being too critical of the US, if I remember correctly...

;)

Posted by: floopmeister on March 1, 2006 at 12:15 AM | PERMALINK

RedDan,

I think you're overreacting. If the Chinese economy hit a burp they might try to quietly sell of their accumulated Tbills, which could set off a domino effect of selling them off that could blow the bottom out of the US.

Say, if the Chinese economy hit a recession, they could try to lessen it by loosening market restrictions on the rural areas, spurring investment, which would mean an extension of internal debt, or external capital. The US economy could have a serious problem of its own within a few years, and should that moment coincide with some problem in China the effects could be mutually reinforcing.

Worrying about China is absolutely prudent.

Posted by: cld on March 1, 2006 at 12:33 AM | PERMALINK

In a previous era, China "lost" Tibet in warfare. Subsequent to that, China lost Taiwan to warfare. Since its resurgence, China has reconquered Tibet by warfare. So the next question is, will China become strong enough to reconquer Taiwan (which the government clearly wants).

That the Chinese empire will undoubtedly shrink back again eventually isn't really that helpful to thinking about whether China will be a severe threat in the next 2 decades. Should we try to prepare to defend Taiwan against what will be soon a significant military threat?

Posted by: republicrat on March 1, 2006 at 12:48 AM | PERMALINK

Should we try to prepare to defend Taiwan against what will be soon a significant military threat?

Since preparing to defend Taiwan will be a great long term project for the US military industries, (creating work and investment for the largest sector of your economy) of course you will "prepare to defend Taiwan".

It would be problematic if China didn't at least appear to "be a severe threat in the next 2 decades".

Still, you can count us Aussies out of this particular jaunt. Even our highly conservative government doesn't want to know about it.

Posted by: floopmeister on March 1, 2006 at 12:58 AM | PERMALINK

floopmeister, are the military industries really the largest sector of the US economy?

Posted by: republicrat on March 1, 2006 at 2:37 AM | PERMALINK

China could probably survive in isolation if it had to.

actually -- i think they have to import food now because their domestic production doesn't meet the demand.
Posted by: spacebaby

Damn straight - 20% and rising. Losses to arable land in the last 20 years are staggering. There's also declining agricultural productivity due to environmental degradation and 100's of million's of rural migrants pouring into the cities.

Posted by: CFShep on March 1, 2006 at 8:06 AM | PERMALINK

Some of us have been talking about these sorts of problems. I wrote a piece in the LA Times last December on the upsurge in rural discontent and violence. You can read it on my site here:
www.uselesstree.typepad.com/useless_tree/2005/12/why_there_will_.html
Posted by: Sam

Got it right, honey.

>>>peers hesitantly into virtual folder "China" which is stuffed to the gills and badly in need of better organization - yep, there it is.

Who knew that my obsessive interest in China and ndia, which sends my nearest and dearest into a nearly catatonic state, would ever get to 'come out of the closet'?

Posted by: CFShep on March 1, 2006 at 8:19 AM | PERMALINK

One of these was the gloss that China had "exchanged Maoist stability" for capitalist profit, but also uncertainty and instability. I had to smack my head. For what period of time was Maoist China "stable"? The '50s famine? The Great Leap Forward? The Cultural Revolution? The Gang of Four? That takes us right up to Deng.
Posted by: brooksfoe

Think that's off the wall? Go try to read Samuel J. 's latest whistling past the graveyard piece.

He notes that the American Consumer has pretty well been sucked dry. But this is okay, Sammy says. All those newly middle class Chinese, Brazilians, and Indians will pick up the reins. And everything will be hunky-dorey.

That standards of living here will fall into a death sprial is apparently no a biggie.

That's Sammy Boy's read of the dire situation.

Then he tacks this fragment of lunacy/wishful thinking onto the bottom of a paragraph way down at the bottom:

"The U.S. trade deficits might shrink without triggering an economic or political firestorm."

That's right after pigs become supersonic jets, right?

Posted by: CFShep on March 1, 2006 at 8:30 AM | PERMALINK

No discussion of China is complete without noting that pretty much the whole southern tier of SE Asia is being stripped for export to China.

There is a huge newly rediscovered taste for Imperial style banquets. This is leading to species already on the brink of extinction being illegally hunted and illegally exported for the tables of the nouveax riches.

Illegal logging for export to China is devastating the forests of Malaysia, Indodesia, the Phillipines (see: recent deadly landslides), Laos, Cambodia and VN.

I've see estimates saying that China's insatiable need for resources to support their manufacture of furniture and such is directly responsible for 60-65% of illegal logging in Brazil and the SOPac tier.

http://news.bbc.co.uk/2/hi/science/nature/4761276.stm
PNG rainforest 'in grave danger'
By Roland Pease
BBC science correspondent

Timber is being cut down unsustainably, conservationists say
The natural forests of Papua New Guinea are in danger of being wiped out because of illegal logging, according to a conservation organisation.
....
Most of the timber is exported to China, and is often turned into products for export to the West.

Posted by: CFShep on March 1, 2006 at 9:17 AM | PERMALINK

China in the 21st century: think of that Monty Python skit where the marching band is lead into an alley, add immense national pride And huge internal animosities... BOOM.

Posted by: jerry on March 1, 2006 at 9:49 AM | PERMALINK

Two thoughts about China:
(1) It seems to be true that there exists a vast population imbalance of males versus females. This is supposedly because of the one child per family policy and easy abortion if it appeared that the one child was going to be a girl.
(2) The Chinese people have embraced the point of view that Taiwan rightfully belongs to mainland China and it is only a little matter of dealing with the Pacific wing of the U.S. Navy and then they can go get Taiwan.
(3) Once the Three Gorges Dam is completed and filled, China becomes extraordinarily vulnerable to any nation with small nuclear weapons and maybe a cruise missile or a suicidal pilot. One nuke into the base of that dam and the catastrophe could claim tens of millions of lives, once downstream habitation adjusts to the dam being in place. (The U.S. has much the same situation with the earth-fill Fort Peck dam in Montana, the breach of which would top all the new levies in New Orleans 1200 miles away, plus a lot of towns in between.)

Posted by: Michael L. Cook on March 1, 2006 at 10:14 AM | PERMALINK

M Cook: (1) It seems to be true that there exists a vast population imbalance of males versus females. This is supposedly because of the one child per family policy and easy abortion if it appeared that the one child was going to be a girl.
******
The one child policy (OCP) really only had any meaning in the context of the people who worked in cities and for state owned enterprises. Their jobs provided them with their living quarters and access to company stores and so forth. When they ran afoul of the only child policy they risked losing everything.

Out in the countryside where the vast majority of the population lives, families with 5, 6, or more children are not uncommon. A simple matter of bribing the village officials to look the other way.

Gender imbalances are much more pronounced in the countryside, too. Families want as many males as possible. There are many deeply entrenched cultural and economic reasons for this.

If the OCP were anywhere near effective, observed by anywhere near the majority of the population or as draconian as some pro-life types here pretend then how to account for the simple fact that China's population has gone from 850M to 1.3B in 30 years?

Posted by: CFShep on March 1, 2006 at 10:24 AM | PERMALINK

Somebody stop this thread quick. Many of the posters appear to actually have some idea what they're talking about. This state of affairs cannot be allowed to continue.

Posted by: brooksfoe on March 1, 2006 at 10:43 AM | PERMALINK

Somebody stop this thread quick. Many of the posters appear to actually have some idea what they're talking about. This state of affairs cannot be allowed to continue.

Posted by: brooksfoe


Drat! And here I was just gettin' warmed up.

I never took you for a party pooper, cher.

>>>grins

Posted by: CFShep on March 1, 2006 at 11:02 AM | PERMALINK

Someone up thread mentioned "Life and Death in Shanghai" which is excellent.

See also:

"China - Alive n the Bitter Sea" - Fox Butterfield

"Chinese Lives - An Oral History of Contemporary China" - Zhang Xinxin and Sang Ye

"the Concubine's Children" - Denise Chong

"The Chinese - Portrait of a People" - John Fraser

On the recent fiction side for India:

"Midnight's Children" - Salman Rusdie
"A Suitable Boy" - Vikram Seth
"The House of Blue Mangos" - David Davidar
"Shantaram" - Gregory David Roberts

and for China in this category, I cannot forget to mention "The Crazed" - Ha Jin

Posted by: CFShep on March 1, 2006 at 12:09 PM | PERMALINK

On the gender imbalance situation, though, it is very real. In the current generation of newborns, the figure is something like 120 boys for every 100 girls. For demographers, a deviation of that size is staggering, practically off the scale. It will translate into tens of millions of young men who are unable to marry, which, in a Confucian society, is a very serious state of affairs.

But it's just a social problem. Every society has problems. The upshot is that some norms and values will have to change. Big whoop. Our norms and values change all the time under pressure of economic and social facts, too. It doesn't portend some kind of apocalyptic "collapse". Whatever that means.

Posted by: brooksfoe on March 1, 2006 at 1:03 PM | PERMALINK

Vietnam, interestingly, has a 2-child policy with less severe penalties for exceeding the limit, and this has greatly mitigated the problem of sex selection, in two ways. First, since one boy is enough (in fact the Vietnamese consider one child of each sex to be optimal), only those couples who get two girls feel they have a problem; so you've only got 25% who are dissatisfied, not 50%. Second, the response of such couples is frequently to have more children, in the hopes of getting a boy. If they get another girl, they will likely try yet another child. So you end up with a situation in which the only people having large families are those with lots of girls. This helps balance the whole thing out; Vietnam has a ratio of boys to girls which is something like 105 to 100, a little off, but not horrible.

Unfortunately, however, women who for whatever reason expect to have only one child do very frequently use abortion to select for a boy, in order to get their mother-in-laws off their backs. This is for example particularly common with HIV+ women, whose health problems will likely prevent them from raising multiple children. I'm in touch with several support groups for people with HIV; administrators say that of the dozens of women in the groups who've given birth, not a single one has had a girl. It's pretty clear what's going on.

Posted by: brooksfoe on March 1, 2006 at 1:18 PM | PERMALINK

Yes, brooksfoe, it's a very serious issue. "Bare branches" in Chinese parlance. Saw a great piece in Foreign Affairs a couple of years ago called "THE GEOPOLITICS OF SEXUAL FRUSTRATION" By Martin Walker.

"Millions of young men in Asia wont be able to find wives. Will they fall in love with war instead?"

Saw a piece the other day saying that the nouveaux riches had also revived a form of concubinage - using their ill-gotten gains to keep three or four or more very young women. Three or four officals have confessed that the demands of these young...er...ladies for their needing to steal millions.

Another issue of conspicuous consumption which just exacerbates the problem.

And how could I left off: China fiction- "Fragrant Harbor" - John Lanchester

Posted by: CFShep on March 1, 2006 at 1:35 PM | PERMALINK

hank wrote:
"Please, try not to remind me that the military industrial complex is greedy enough to propose spending a trillion dollars to prepare for a war with China, and that we, as citizens, are, what is the right word, ignorant? scared? zombied-out? enough to go along with it.

War with China. Why don't we just spend the 1 trillion preparing to fight Hitler?"
Posted by: hank on February 28, 2006 at 3:12 PM | PERMALINK


Don't forget we're possibly already spent $1T on Iraq. Fighting China (for whatever God forsaken idea any crazy Neocons might have) would certainly cost about 20 times as much as the war in Iraq.

It would certainly be easier to have those resources if we didn't piss them away in Iraq. But then, the military-industrial-congressional complex/conspiracy never worries about things like that. They just argue we therefore need to spend even more to rebuild the military -- ensuring profits as far as the eye can see.

Really, after Iraq falls or we pull out, then there's no enemy in sight. So, how much should we REDUCE our military spending? Should it go down by 50% or 75%?

Think anybody, and I mean ANYBODY, will actually propose decreasing military spending by one iota? When does the American public get a say in how much of our money we waste?

Posted by: MarkH on March 1, 2006 at 4:16 PM | PERMALINK

Don't forget that the GOP goal is to turn the USA into a third world country, with a small, insanely rich ruling class with a huge, poverty-ridden mass below them. So our social structure will closely match those of both China and India.

Posted by: Vicente Fox on March 1, 2006 at 4:39 PM | PERMALINK

Don't forget that the GOP goal is to turn the USA into a third world country, with a small, insanely rich ruling class with a huge, poverty-ridden mass below them. So our social structure will closely match those of both China and India.
Posted by: Vicente Fox

Give Mr. Fox a cigar. The class of Davos uber alles.

Posted by: CFShep on March 2, 2006 at 9:21 AM | PERMALINK

More like Davros uber alles.

http://en.wikipedia.org/wiki/Davros

Posted by: cld on March 2, 2006 at 3:01 PM | PERMALINK

Yeah, my typing has been atrocious today.

OD'd on SoLA hi-test early on and my recalitrant fingers weren't meshing too well with my brain.

Posted by: CFShep on March 2, 2006 at 3:48 PM | PERMALINK

It's not your typing, it's

Davros=Dr. Who villain=hilarity!

Posted by: cld on March 2, 2006 at 5:10 PM | PERMALINK

Great comments. I'll only this: The corrupt octegenarians will be replaced by corrupt youngsters. They're waiting to get paid. We've seen this pattern over and over around the world and down through history.

What we call corruption, many countries call normal business practice.

Why does anyone think China will be different?

Posted by: zak822 on March 2, 2006 at 5:24 PM | PERMALINK




 

 

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