How did this notion of Chinese supremacy gain hold? The answer is nothing more profound than statistical extrapolation. China was destitute when Deng Xiaoping grabbed power in December 1978. Since then, the country has averaged, according to official statistics, a spectacular annual growth of 9.9 percent. This rate, if carried forward, gives China the world's largest economy in a few decades2027, to be exact, according to a now-famous Goldman Sachs estimate.
But it's never straight-line. It's always an asymptotic curve, fastest growth at the beginning, flattening off as natural limits are approached. The question then becomes, the length of time of the fast growth, and the height of the natural limit. It seems to me we've seen at least two signs that the flattening of international sales growth has begun: revelations of deadly product being shipped leading to revulsion, and increased establishment of manufacturing contractors outside of China, in Vietnam, Malaysia, Indonesia, and elsewhere. The next big push for the Chinese economy is going to have to come from servicing local customers, not international ones.
So will ours be the Chinese century? Probably not. China has just about reached high tide, and will soon begin a long painful process of falling back. The most recent period of China's fast growth began with Deng's Southern Tour in early 1992, the event that signaled the restarting of reforms after the 1989 Tiananmen Square massacre.
And as a result of its manufacturing strength, the Chinese central government accumulated foreign currency reserves that have been aptly called the greatest fortune ever assembled'$2.399 trillion, at last count. No country has a bigger stash. And no wonder analysts believe that China, having grown so large so quickly, has now acquired unstoppable momentum.
But the analysts and the conventional wisdom they peddle are wrong. China's economic model, which allowed the Chinese to take maximum advantage of boom times, is particularly ill suited to current global conditions. About 38 percent of the country's economy is attributable to exportssome say the figure is higherbut global demand at this moment is slumping. (Last March, the normally optimistic World Bank said the global economy would contract in 2009 for the first time since World War II and that global trade would decline the most it had in eighty years.) Globalization, which looked like an inevitable trend in early 2008, is now obviously going into reverse as economies are delinking from each other. So China is now held hostage to events far beyond the country's borders.
As we saw in the Great Depression, the exporting countries had the hardest time adjusting to deteriorating economic conditions. That is proving to be the case now as well. China's exports fell 16.0 percent last year, and forecasts show a weak export sector for at least the remainder of this year. As a result of declining exports and other factors, Beijing presided over the world's fastest slowing economy. China's economy, in fact, grew by about 15 percent in 2007, but fell to negative growth at the end of 2008.
Posted by: ed ||
04/15/2010 12:22 Comments ||
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#3
What a bunch of BS. They confuse discontent with thieving local officials with discontent with the central government in Beijing. Actually, the central government is typically viewed as a savior, as every Chinese has the right to go to Beijing and petition the government for grievances.
The CCP is responsible for the greatest period of prosperity in the 5,000 year history of China. They went from dirt-poor (literally - no Xbox and cable TV for the peasants in 1992) to modern nation in less than 20 years. Well, parts of China are fully modern, anyway. Think about what would have happened to the USA in 1845 if aliens with cell phones and computers landed and started investing in factories everywhere. By 1863 there'd be a "modern" alien-influenced state built right next to the saloons and cathouses.
Chinese are proud of China, and the CCP is the reason for it. Chinese greatly fear chaos and the CCP is the lesser of two evils. There is an unspoken deal: "keep the prosperity coming and we won't complain too much."
#4
What a bunch of BS. They confuse discontent with thieving local officials with discontent with the central government in Beijing.
No doubt that's true, gromky, and is an important insight in terms of evolution vs. revolution on the political side of things. But on the economic side, the question is whether those straight-line extrapolations upon which all of China bases their hopes are realistic. If not, as I contend based on my very limited understanding of economics (and a philosophical fondness for asymptotic curves), life will become a bit more interesting for all of China a good deal sooner than planned, even without a political revolution.
#5
Westerners are seeing the country through their own distorted lens. To Chinese, the CCP is kind of troublesome but they're delivering the goods in spades. You have to realize that before 1992 China was poor. I mean, basket case poor. The CCP has made China into a powerful nation and the people don't mind the repression all that much, as long as it keeps the feared chaos at bay. China's entire history 100 years before Mao was civil war and being beaten up by imperialists. Nobody seems to understand this, even people who should know better.
I'm no panda hugger but the commies have done a bang-up job ever since Deng Xiaoping hijacked the People's Revolution onto the capitalist road.
#6
China's entire history 100 years before Mao was civil war and being beaten up by imperialists.
Or the Manchus who beat up the Ming, or the Ming who beat up the Yuan/Mongols, who beat up the Sung, who...well you get the idea..all the way back to the Han and Shang. It's the other old Chinese cycle: chaos and regionalism, centralization, entropy-decay-corruption of the center, disintegration-decentralization. It's only been going on for a couple thousand years. What modern tech does is speed up the time line.
The problems Beijing faces are the growing economic rift between the Han and non-Han in the outer regions attenuated by the Han's historical racism and ability to handle a real serious recession coupled with classical wide spread corruption that is the bellwether of other failed dynasties. They're riding the proverbial tiger, though they've shown remarkable pragmatism in adopting the changes they have. What has yet to be seen is at what point their [the Party] need to control overpowers the natural tendency of effectiveness to be correlated to the lowest level of responsibility which works against centralization. We're seeing that failure in the Beltway today.
#7
China's entire history 100 years before Mao was civil war and being beaten up by imperialists.
That's the way the Chinese see their history. A perception strongly reinforced by a very nationalistic narrative indoctrinated into all Chinese by the educational system and government propaganda.
China is a totalitarian regime and such regimes don't survive social and economic disruption well. The CCP is probably safe as long as the good times roll, but look out if there is a real estate crash, a bigger and 'better' GFC MKII, raging inflation, etc.
#8
Globalization, which looked like an inevitable trend in early 2008, is now obviously going into reverse as economies are delinking from each other.
This is incredibly wrong and just plain foolish. Economies are not delinking, nor will they. Hell, the writer goes on to use the Great Depression as an example of the difficulties exporting nations face, but doesn't recognize why they face it. Because import and export economies are linked, silly. They were a hundred years ago and will be a hundred years from now.
What's going to prevent China from becoming the dominant economic superpower is poor governance, an aging population and competition from cheaper labor markets.
Posted by: Mike N. ||
04/15/2010 20:29 Comments ||
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It's not hard to predict how the coming fight over financial regulation legislation will be framed by most of the mainstream media. Democrats like Christopher Dodd, the sponsor of the pending Senate bill, will be portrayed as cracking down on greedy Wall Street operators. Republicans will be portrayed as letting Wall Street operators have their way.
That might be a fair characterization if Republicans concentrate their fire on the consumer protection agency the bill would establish in the Federal Reserve. But that's a peripheral issue, and Republicans would be well advised to leave the opposition to chief executive officers like JPMorgan Chase's Jamie Dimon, a Democratic contributor, who argues persuasively that regulators should just do a better job of enforcing already existing rules.
The real heart of the Dodd bill is the provision creating a $50 billion fund collected from large financial firms and authorizing the Federal Deposit Insurance Corporation to use the funds to reorganize any such firm it decides is failing. Under the bill, the FDIC would use this "resolution authority" rather than have the firm go into bankruptcy courts, as Lehman Brothers did after it collapsed in September 2008.
This sounds reassuring. But actually it's very dangerous. It amounts to granting "too big to fail" status to financial firms like Goldman Sachs and JPMorgan Chase. As my American Enterprise Institute colleague Peter Wallison and University of Pennsylvania law professor David Skeel explain in the Wall Street Journal, it tells those firms' creditors and shareholders that Uncle Sam will bail them out if they make what turn out to be imprudent loans.
The Lehman Brothers bankruptcy process was orderly and did not result in the financial collapse of the firm's counterparties in financial transactions. But it did impose severe losses on creditors, shareholders and managers. Players in the financial markets were put on notice that they face dire penalties for placing trust in shaky firms.
FDIC resolution authority would work differently. The Dodd bill specifically authorizes the agency to treat "creditors similarly situated" differently, i.e., it can pay off creditors who would get little or nothing in bankruptcy proceedings.
Moreover, as Wallison and Skeel note, the FDIC does not have experience in dealing with the abstruse financial instruments of the largest financial firms. It does a good job of winding up the affairs of small banks, paying off depositors and selling deposits to another bank. But it has never handled anything as big and complex as Lehman Brothers, as the bankruptcy courts have.
Posted by: Fred ||
04/15/2010 00:00 ||
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Link ||
[11124 views]
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#1
Jeez, the problem isn't Wall Street, the problem is the Banks and Insurance companies trading on their own account.
#4
On the contrary - the Wall Street boys were stupid or venal enough to buy the bogus "AAA" securities packaged by the banks and the Fannies. There are no choir boys in this mess.
Previous report from the WH on nuclear weapons use:
"The United States for the first time is forswearing use of atomic weapons against non-nuclear countries, a break with a Bush-era threat of nuclear retaliation in the event of a biological or chemical attack.
But this comes with a major condition. Those countries would be spared a U.S. nuclear response only if they are in compliance with the Nuclear Non-Proliferation Treaty. Iran and North Korea would thus not be protected."
Current headline (by Associate Press, no less): Iran Ridicules Obama's 'Cowboy' Nuclear Strategy Iran ridicules Obama's new nuclear strategy, saying U.S. acting like a 'cowboy'
"American materialist politicians, whenever they are beaten by logic, immediately resort to their weapons like cowboys" (Ahmadinejad)
Decoded: Iran & North Korea will receive a nuclear attack in response to a biological or chemical attack.
It seems to me that my headline would have been national...had this President not been black and Democrat...I'm pretty sure such a headline was never printed. Oddly & surprisingly, the AP 'almost' calls Obama a Cowboy...again, 'almost'.
Amnesty International defines itself as "a worldwide movement of people who campaign for internationally recognized human rights for all." So why is the organization working hand-in-glove with one of the Taliban's most notorious defenders That's a question serious human-rights campaigners are asking themselves in light of Amnesty's curious collaboration with Moazzam Begg. Mr. Begg is a British citizen and former Guantanamo detainee who, following his release in 2005, wrote a memoir and became director of a group called Cageprisoners, which Amnesty calls a "leading human rights organization."
In his memoir, Mr. Begg acknowledges that he moved to Afghanistan in the summer of 2001 to "live in an Islamic state . . . free from the corruption and despotism of the rest of the world." He added that "the Taliban were better than anything Afghanistan has had in the past 25 years."
Such views alone might have at least given Amnesty pause before it decided to offer him speaking platforms and bring him along to a meeting at 10 Downing Street. It certainly raised questions for Gita Sahgal, until recently the head of Amnesty's Gender Affairs Unit, who was suspended from her job earlier this year for opposing the organization's links to Mr. Begg and Cageprisoners. Ms. Saghal left her job for good on Friday, saying in a statement posted on the Internet that Amnesty has "made a mockery of the universality of rights."
Ms. Saghal's objections have been joined by nearly 2,000 others, many of them leading human-rights campaigners, who have put their names to a petition defending her and denouncing Amnesty's cooperation with Mr. Begg. More remarkable, however, has been Amnesty's defense of its work with Mr. Begg.
In a letter to the petitioners, Amnesty Secretary General Claudio Cordone praised Mr. Begg for advocating detainee rights "within the same framework of universal human rights standards that we are promoting." For good measure, Mr. Cordone added that Mr. Begg's belief in "jihad in self-defense" is not necessarily "antithetical to human rights."
In an email to us, Mr. Cordone insisted that Amnesty "does not now and has never supported any form of jihad," and that Mr. Begg and his group "condemn all attacks on civilians." That's nice to know, even if the concept of "defensive jihad" has been previously used by al Qaeda and the Taliban to justify the beading of "apostates" and the public lashing of women. As Ms. Saghal points out, "Adherence to violent jihad, even if it indeed rejects the killings of some civilians, is an integral part of a political philosophy that promotes the destruction of human rights generally."
None of this should be hard to grasp. Still, it's a pity that a group that was born to give voice to the victims of oppression should now devote itself to sanitizing the oppressors. The novelist Salman Rushdie, among the signatories of the petition, put it well when he said that "Amnesty and Begg have revealed, by their statements and actions, that they deserve our contempt."
Posted by: Frozen Al ||
04/15/2010 12:34 ||
Comments ||
Link ||
[11126 views]
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#1
Beginning of the end for the old global internet. It will be sectioned off into networks based on national borders. I mean, how many people really need to receive incoming traffic from China during their daily lives, anyway? An ISP I knew blocked the entirety of Russia and China due to spam/viruses and they never got a complaint because nobody noticed.
A multi-volume chronology and reference guide set detailing three years of the Mexican Drug War between 2010 and 2012.
Rantburg.com and borderlandbeat.com correspondent and author Chris Covert presents his first non-fiction work detailing
the drug and gang related violence in Mexico.
Chris gives us Mexican press dispatches of drug and gang war violence
over three years, presented in a multi volume set intended to chronicle the death, violence and mayhem which has
dominated Mexico for six years.
Rantburg was assembled from recycled algorithms in the United States of America. No
trees were destroyed in the production of this weblog. We did hurt some, though. Sorry.
Amnesty International defines itself as "a worldwide movement of people who campaign for internationally recognized human rights for all." So why is the organization working hand-in-glove with one of the Taliban's most notorious defenders That's a question serious human-rights campaigners are asking themselves in light of Amnesty's curious collaboration with Moazzam Begg. Mr. Begg is a British citizen and former Guantanamo detainee who, following his release in 2005, wrote a memoir and became director of a group called Cageprisoners, which Amnesty calls a "leading human rights organization." 
