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Published on: May 12, 2012
Chinese Economy “Unexpectedly” Slows; Will the Bubble in China Babble Burst?

The eurozone crisis has captivated audiences around the world, but it is recent economic data from China that should be capturing the attention of policymakers. Despite confident predictions from Wen Jiabao that the economy was heading for more growth, April figures across a range of sectors make for grim reading: industrial production is down, fixed-asset […]

The eurozone crisis has captivated audiences around the world, but it is recent economic data from China that should be capturing the attention of policymakers. Despite confident predictions from Wen Jiabao that the economy was heading for more growth, April figures across a range of sectors make for grim reading: industrial production is down, fixed-asset investment and retail spending slowed, home sales plummeted, and export sales growth was only half what it was in March. When China’s economy grew at an abnormally low 8.1 per cent clip in the first quarter of this year, some analysts suggested that it had reached the bottom of the business cycle. Better times were ahead, they reasoned. These latest figures, however, suggest that what we may be seeing in China is the start of a prolonged, and perhaps permanent, deceleration in Chinese growth.

Of course, it’s too soon to know for sure whether these data are merely a blip on the radar. But if the Chinese economy is indeed entering a permanent slowdown the political and social consequences will be profound. Decades of rapid economic growth granted legitimacy to the Chinese Communist Party and helped minimize social unrest. As the country prepares for only its second organized transfer of power since 1949 the incoming leadership team must be asking itself whether China’s political system is capable of undertaking the necessary economic reforms to maintain prosperity and stability.

As the New York Times notes, serious questions abound as to whether the forces of reform and modernization are strong enough to withstand the inevitable pushback from the web of powerful interests connected to the Party apparatus:

Many economists have been urging the government to loosen controls over the financial system, to support lending to private businesses while reining in state-owned enterprises, to allow more movement in exchange rates and interest rates, and to improve social benefits.

Such changes would curb the state’s role, lessen corruption and encourage competition. But making them would involve a titanic power struggle. Executives of Chinese conglomerates, army generals, Politburo members, local officials and the “princeling” children of Communist Party elders have little incentive to refashion a system that fills their coffers.

Will failure to reform unleash waves of social unrest? Cracks are already appearing. Over 30 Tibetans have set themselves on fire in protest against the central government. The revolt in Wukan caught the attention of the world. And China hands are well aware that the Chinese government now spends more on internal security than it does on the military. From the Times:

The surging number of protests arising from this gap is another stress point in the China model. Officials rely heavily on domestic security forces to quell what they call “mass incidents,” which one sociologist, Sun Liping, estimated at 180,000 in 2010. In March, the government announced that it planned to spend $111 billion on domestic security this year, a 12 percent increase over 2011, and $5 billion more than this year’s military budget.

Recent years have seen a bubble in China babble among the global punditocracy’s talking heads. China’s apparent immunity to the 2008 financial crisis led many talking heads and columnists to argue that the Chinese growth model – a cocktail of authoritarian political control and so-called “state capitalism” – represented a new way forward for economies everywhere.

As history, this was simply ignorance speaking: authoritarian states and forms of state capitalism have been achieving rapid bursts of growth since the era of Louis XIV. During the Depression, Hitler, Stalin and Mussolini were all widely hailed by clueless western pundits as having found more “modern” and “efficient” methods of promoting growth than the “failed” policies of the liberal capitalist states. It has been well known for centuries that over the short term, concerted state-guided modernization drives can outperform liberal policies; the trouble is — and always has been — that sooner or later the accumulated inefficiencies, distortions, and political shortcomings of non-liberal states lead to prolonged slowdowns at best, revolutions and wars at the worst.

However, those who don’t know history are condemned to repeat the mistaken cliches of past generations as if they were shiny new truths; China babble has reigned among exactly the kinds of people who used to marvel at Hitler’s autobahns, Stalin’s steel mills, and Mussolini’s ability to make the trains run on time.

Many Chinese leaders also fell for the hype, and an over-estimation of China’s strength led directly to the foreign policy failures that paved the way for the reassertion of US power in the Pacific. The steady increase in spending on internal security suggests that not all of China’s leadership swallowed the Kool Aid; those numbers probably tell us more about Beijing’s true understanding of its prospects than the chest-thumping about a “Beijing consensus.”

Authoritarian modernization always works until it quite suddenly doesn’t; many observers hailed Stolypin’s reforms in late Czarist Russia and spoke in awe about Russia’s rapid industrial growth in the years before World War One. At Via Meadia we’re not able to give assign a date to the China correction that lies in store; the current slowdown could be a blip on the screen or the start of something more consequential.

Our hope remains that China’s transition to a more sustainable trajectory will be measured, peaceful and as smooth as possible. No sane American can wish China ill. But China is too big, too complex, too diverse and it is changing too rapidly for its future path to be easy and smooth.

Napoleon is reported to have said that when China awakens it will shake the world. What that prophecy overlooked, and what the China babblers of today also miss is that the awakening process will first and foremost shake China itself. The transformation of a nation like China cannot long or successfully be led by technocrats however enlightened and skillful anymore than the technocrats of Brussels can manage the far less demanding tasks of building Europe.

The ground under Beijing is seismically active; one doesn’t know when the next quake will strike, but come it will. The steady rise in internal security spending tells us that the Chinese understand this, even if starry eyed pundits in the West can’t figure it out.

 

show comments
  • Anthony

    China is too big, too complex, too diverse and changing too rapidly for simple and facile explanations about its future regarding both its economic model (authoritarian centered state control) and CCP governance (viability long term). Outsiders can only speculate the imponderables – even with diplomatic assistance.

    One thing is certain China geopolitically going forward matters – especially in Northeast and Southeast Asia. Recent events have made the West more cognizant of that dynamic.

  • Jacksonian Libertarian

    Excellent, a well researched and example filled article that shows why China’s growth has feet of clay.

    I do however think you missed one glaring point. China’s success is built on an export model economy, which requires the manipulation of their currency through the purchase of foreign Treasuries which they must overpay for (China has overpaid for $1.15 Trillion US Treasuries, typical Government Monopoly stupidity). This large a holding of Dollars (it represents 25% of all foreign held ($4.5 Trillion) US Treasuries) cannot be liquidated without taking huge losses, and destroying China’s export model economy.

    The Chinese are now trapped into using the Dollar as a reserve currency and they did it to themselves thinking all along that they were cheating the running dog American Capitalists. LOL You hear them squealing frequently now that they are going to find a new reserve currency, this is a toothless threat as they would lose their biggest customer and kill their export model economy at the same time (this will now happen even if all they do is stop buying US Treasuries).

    Eventually there will be a rebalancing of the Dollar, and all the cheating export model economies will experience snapback behavior as the US economy becomes an export model economy in the best way possible. What do I mean by that you ask? The rest of the world already has $4.5 Trillion of our currency with which to purchase American products, services, and capital investments like stocks and bonds.

    I believe we should invite this rebalancing now, by having the Fed payoff all foreign held US Treasuries ($4.5 Trillion). This would liquefy and accelerate world trade, and cause the US to experience an export driven recovery. This is the only way the US economy is going to get out of Great Depression 2.0 in a timely fashion, now that the American Family Nest Egg of home equity (the normal source of small business start up and expansion capital, which creates most of the jobs during a recovery) has been destroyed by massive Government borrowing of $6+ Trillion from the Democrat’s fiscally irresponsible spending policy.

  • Eric from Texas

    WRM,

    Terrific column! Wonderful historical summary of the fallacy of Tom Friedman and his ilk about the superiority of the authoritarian model. Not unlike the push in the US in late 1980s for “more patient, bank-centered lending” of Japan model.

    Fads come and fads go for the “central planning” crowd. As you oontinue to highlight, the superiority of the Anglosphere in the face of a rapidly changing world reveals itself time and time again to be the best way for people to live healthier and wealthier lives.

  • http://facingzionwards.blogspot.com/ Luke Lea

    I’m on a big China kick lately, reading Chinese history backwards, i.e., starting with The People’s Republic, back through the first half of the 20th century, then the histories of the Qing and Ming dynasties in that order, then skipping back to the Song and going forward thru the Yuan to the Ming again. Jonathan Spence’s many books and Mote’s Imperial China have been particularly well written, but for real insight there is nothing to equal the classic Chinese novels, The Golden Lotus and The Dream of the Red Chamber in particular (Haven’s gotten to Marsh Men or Three Kingdoms yet).

    With that background — I am just a beginner, a real amateur, let me make a few observations:

    The biggest ones are that China hasn’t fundamentally changed in the last 1000 years and that we are comically ignorant of the nature of Chinese society, upon we have staked the future of our world order formerly known as Western civilization.

    China has never known the distinction between executive, legislative, and judicial powers: they have always been one. Official corruption has always been an accepted way of life, a given, leading eventually to social revolution, at which point a new ruling clan is eventually installed, which starts our relatively honest but inevitably declines.

    There has never been an influential middle-class in China.

    The problem of succession has never been solved, even within Dynasties: coups, murder, rebellion, and every sort of treachery you can think of have been the norm.

    Polygamy has always been the norm at the top.

    Prostitution was a major institution always, including the selling of young girls from poor rural families into houses of prostitution (don’t know if this is going on now, but if it is we will be the last to find out).

    It has always been a low trust-society. Grudges are remembered, “face” is paramount, torture routine, bribery standard operating proceedure, etc..

    Political power has always trumped wealth when it comes to a showdown.

    Superstition is a major component of popular belief (which is why Falun Gong had a hundred million devotees apparently, including a lot of members of elite communist families, before it was banned.

    It’s military has never been efficient, relying on quantity not quality to overcome its enemies. Chinese armies have been a full order of magnitude larger than anything seen in the West for more than a thousand years. The focus has always been on the north.

    Social Darwinism — survival of the fittest — has been a fact of life, particularly during the past three hundred years: curiously the early Quin Dynasty (the last one) undertaxed its farm population, which led to a population explosion and a fall into a Malthusian trap. To survive at the bottom you had to work very, very hard for a bare subsistence, be smart, but not take chances, which explains the nature of the Chinese labor force we in the West are being asked (by our greedy, foolish corporate class) to “compete” with. None dare call that treason, but I will.

    I think we need to withdraw from China except for a small, balanced trade to force this mercantalist society to undertake true capitalist reform or else collapse into what it has always collapsed into after corruption overwhelmed it. China has the option of cashing in its chips (all those American dollars) which it can use to import the machinery and capital equipment it needs to develop true internal markets (the division of labor is governed by the extension of the market, and theirs is plenty big). We in the West have our hands full trying to recover from this un-Godly error.

    That’s the way I feel right now. Hope I am wrong.

  • http://knownofold.blogspot.com J R Yankovic

    “The transformation of a nation like China cannot long or successfully be led by technocrats however enlightened and skillful anymore than the technocrats of Brussels can manage the far less demanding tasks of building Europe.”

    IMO, highly appropriate parallel between the two. I’m sure differences between “hard” and “soft” authoritarianisms look very considerable on paper, and at conferences. But the fallout arising from mislaid and mismanaged – to say nothing of grossly exaggerated – expectations does not seem to have translated into terribly different results on the ground. Expectations that were fueled, if I remember correctly, by politicians, bureaucrats, planners, investors, consultants and companies throughout the developed world. Including a few, I’m told, in that most economically dynamic and enlightened of all possible countries, the United States. And all of it premised – pardon me if I simplify – on the further, deeper, more hairspring-trigger-accurate (just in time?) integration of a seamless global economy. No utopian vision, mind you: simply where the Irresistible Future was taking us at the time. And meanwhile if certain recalcitrant realities on the ground kept popping up – like the massive, centuries-old cultural differences between China and the West, or even between northern and southern Europe – well, they’d just have to smoothe themselves out, wouldn’t they? (Or be beaten down? Or swept under the rug?)

    Again, “on the ground.” Which MAY be just the place we’ve been failing to look at in recent decades. But then wouldn’t that be just like our modern technocratic “expertise,” the farther it’s removed from the backward, inefficient, barely-employable slobs it must ULTIMATELY govern: local and regional communities? Almost as if some big, rich, important patient had been ignoring sudden changes in the behavior of a few of his own body’s cells, because the region of those same cells had always been so “minor,” so “unimportant” – or so easily manipulated. Or as if households, localities, even whole electorates had become so many ingredients in a chemical lab experiment, to be shuffled, mixed, rearranged, even dissolved, almost at the whim of some bureaucrat or metropolitan planner. (Not that stern, bold, visionary concepts like “growth,” “infrastructure” or “eminent domain” should ever be regarded as whims, of course.)

    My point is that I doubt either Europe nor China could have made such rapid, democractically unaccountable “progress” without our encouragement and confidence. And lest anyone be tempted to confine his mud-spattering to Right or Left, the bipartisan American consensus of the past three decades, as thibaud has so aptly phrased it, was a strong, well-orchestrated one on these points. Nor is it necessarily clear just where it came up in the color spectrum from Red to Blue. That may be the more accurate work of future generations. For now I’m tempted to call it Late Blue (or Deep Blue, or Decadent Blue, or even Depraved and Degenerate Blue). At all events, it would be interesting if future US historians’ conclusions suggested a pattern of as much – and as little – continuity between 1940 and 2000 America as between, say, the Republic of Scipio Africanus and the Empire of Caligula.

    And in any case I know what I’m hoping: That the “consensus” will be remembered as the one element in US history whose eager financing of Chinese and European “miracles” (hopefully only) all but broke the global economy.

    And one last thanks for some other very interesting, instructive historical parallels.

  • http://facingzionwards.blogspot.com/ Luke Lea

    In sum, our new China policy should be a combination of containment (particularly at sea) and peaceful co-existence. The same one we had with old Soviet Union. We will have to ally ourselves with Russia eventually, might as well start thinking about it now.

  • http://knownofold.blogspot.com J R Yankovic

    “Social Darwinism — survival of the fittest — has been a fact of life, particularly during the past three hundred years: curiously the early Quin Dynasty (the last one) undertaxed its farm population, which led to a population explosion and a fall into a Malthusian trap. To survive at the bottom you had to work very, very hard for a bare subsistence, be smart, but not take chances, which explains the nature of the Chinese labor force we in the West are being asked (by our greedy, foolish corporate class) to ‘compete’ with. None dare call that treason, but I will.”

    Very well-put, and (and if I may so) long overdue. And in particular the second-to-last sentence. I can just hear the original pitch as it was put to us c. 2000 (in so many words): “That’s right, folks, they’re our NEW competitors. You know, like Japan, Taiwan, etc – only bigger, better, SMARTER. And you all know what that means, don’tcha? Yep, that’s right, folks: GET WITH THE PROGRAM …”

  • Rich K

    Today its China, tommorrow its germany/russia/america/japan, etc etc. Change always happens and not even Nostradamus got it right most of the time.Thats what makes punditry the bestest kind of writing ever,no responsibility to ever get anything right.Just ask Paul Krugman.

  • http://reformaliberal.wordpress.com/ b5blue

    Excellent article. This is the insight our republic desperately needs on a daily basis.

  • http://www.pacrimjim.com PacRim Jim

    The anomalous growth of the Chinese economy over the past decade or so has created expectations in China.
    When these fail to eventuate, expect chaos in China.

  • James

    My older sister insisted that the ‘China’ model would be the wave of the future.
    I asked her ‘What about the Chinese Democratic Revolution?’
    She looked at me quizzically and I said ‘You don’t think the Communists will rule forever do you?’
    I guess we’ll see

  • http://chizumatic.mee.nu/ Steven Den Beste

    Much of the “China Miracle” has been caused by China’s huge trade surplus. But in the long run that isn’t sustainable.

    For one nation to have a trade surplus, someone else has to have a trade deficit. It’s a zero-sum game. And with China running immense trade surpluses for such a long time, it will eventually accumulate immense piles of foreign currency — which it has. Eventually there must come a reckoning, and if it hasn’t collapsed for any other reason by then, this will bring about the collapse of the Dollar, and maybe also the Euro.

    China has kept the game going by controlling the exchange rate for their own currency at an unrealistic low level. But when the dollar (and Euro) collapse, that won’t be possible any longer. And then the price of Chinese goods will rise in the rest of the world, and sales will fall, and China won’t have a trade surplus any longer.

    Problem is, then you’ll get huge layoffs in China at all those factories, and maybe a revolution.

  • Angel Martin

    on the estimate for a timeline, there is typically a 2-3 year lag between when real estate prices peak and the stock market crash that precedes an economic crash,

    For examples see USA in 1926, Japan 1988, Thailand 1995, USA 2006 etc.

    China real estate prices appeared to have peaked in late 2011 so that suggests they still have a disinflationary financial assets bubble to work thru before their big crash.

  • teapartydoc

    I disagree with those who say we should minimize trade with China. Revolutions usually occur on the heels of raised and disappointed expectations. A lack of trade simply gives excuses to nationalists at the expense of denying ourselves less expensive, sometimes better quality goods. And, as Bastiat said, if goods do not cross borders, armies will.

  • Micha Elyi

    $1 trillion in US Treasuries could buy enough EB-5 visas to relocate two million Chinese families to the US heartland.

    Think about it.

  • don

    Looks like a modern reiteration of that classic Tower of Bable story. Except in the original story everyone was on the same page already, speaking the same language to better build their way to heaven, and only after offending God with that threatened heavenly gate crashing were different languages created and imposed by a jealous God to confuse the barbarians. And thus began the era of warlords.

  • http://www.worldcpa.com alan

    People don’t seem to realize that when you burst a bubble, you don’t get an orderly outflow of air. You get a bang. To expect China to have an orderly decline in GDP is irrational. Bubbles are based on euphoria. When bubbles burst, euphoria turns to outright despair. People will no longer be borrowing money to buy property. They will be trying to sell the property and pay off their debt. They will cutting expenses to make loan payments. Demand and prices will continue to decline for a long time.

  • http://facingzionwards.blogspot.com/ Luke Lea

    Corruption in China, this is how it works:

    http://tinyurl.com/chram95

    How do you clean up a society like this?

  • Ganpat Ram

    Mead laughs that “China babble has reigned among exactly the kinds of people who used to marvel at Hitler’s autobahns, Stalin’s steel mills, and Mussolini’s ability to make the trains run on time.”

    Quite right.

    Stalin’s steel mills did not have anything to do with winning the Second World War. Who uses autobahns these days?

  • Kris

    May I say: “Steven Den Beste”!

  • valwayne

    I actually wish the Chinese well. I hope they find a way to continue strong growth while moving to a freeer and more democratic system. In the meantime my real worry is saved for the U.S. under a President who with the help of his political party is destroying what used to be the most vibrant economy in the world with his old, tired, failed, estreme left wing ideology. The U.S. is being pushed into permanent decline by the worst most failed Presidency in the history of the U.S. The world really will be in a sad spot if China falters, and Obama continues to damage the U.S. so terribly!

  • Pragmatist

    In physics, the theory of general relativity states that once an object approaches the speed of light, more and more energy is required to produce further acceleration. Economics is somewhat similar. The larege an economy gets, the more innovation and investment is required for further growth. Europe and the US are feeling that pressure now in a time where capital is limited and China has been enjoying this as playing catch up to the rest of the world is much easier than innovating.
    China may be taking it’s first baby steps into becoming a modern, innovation-based economy and is wobbling. What remains to be seen is if the baby will keep crawiling or learn to walk and run. If the former, China will lose it’s productive edge to emergine economies in Africa and will enter an era of stagnation on par with Japan in the past 20 years. If they can manage to produce something on their own to sell, maybe they can survive.
    But as things are now, China has been the worlds factory, but is pricing itself out, and unless an alternative is found, China will once again recede back into relative obscurity in the face of a much more dynamic African economy.

  • Will Osuna

    Summary:

    Thomas Friedman is to China what James Fallows and Paul Kennedy were to Japan.

    That is all.

  • Some Sock Puppet

    Thank you for the continued excellence in reporting on China. I still hope for a peaceful resolution, but fear the nationlism angle by a desperate-to-keep-power party. Much like the latin American countries, they play up the “other” instead of addressing their own faults.

  • Andrew P

    I can’t stop wondering if all observers are missing something about China. The country is a black box, and what do we really know anyhow? If the Chinese economic miracle comes undone, who knows what might happen. Perhaps the Chinese could do the unexpected and turn to religion, much like the Tibetans did more than a thousand years ago. But if China turns to religion, which one will they gravitate toward? Christianity is ruthlessly repressed by the Government, and Islam is the only religion with the strength and ruthlessness needed to overthrow a totalitarian Communist state. The prospect of an Islamic Revolution in China is one of the scariest things I can think of from the standpoint of US survival. I sure hope I am off-base here.

  • DonB

    Interesting piece, as usual. You note, quoting the NYT, that China’s spending on “internal security” this year will be approx 5% greater than it’s “military budget”. I wonder how those budget categories are defined and how on an apples-to-apples basis they compare w similar spending in the US.

  • Ganpat Ram

    Read this about the state of US banking for those who are super-confident about Americanism:

    http://www.nytimes.com/2012/05/14/opinion/krugman-why-we-regulate.html?_r=1

    When you meet ordinary US guys they are not so arrogant as the elites. They are scared about the out of control inequality of the US economic order and afraid of what the future means for their kids. It is only the elite like Mead who get preachy and assume the US has all the answers.

  • First Advisor

    First in importance is that life is easy for opinion columnists like Mead these days. He doesn’t need to expend any effort on thought, all he needs to do is write yet another China-bashing column, and his popularity with the American public, and his paycheck, are guaranteed. Sadly, he still makes some cardinal errors of fact and reasoning.

    Most importantly again, China’s material success has nothing to do with communism. Calling the Chinese government the Communist Party is simply an emotionally loaded buzzword, used to manipulate dumb Americans, and arouse the hostility of 100 percent indoctrinated American brains, filled with jingoism propaganda, and incapable of independent thought past the age of eight. For instance, the sentence, ‘Decades of rapid economic growth granted legitimacy to the Chinese Communist Party and helped minimize social unrest,’ is utter nonsense, completely and totally untrue. The government of China is legitimate and social unrest is minimal because the central government is the best, most competent national government in the world, and the economic prosperity of the past generation is merely one aspect of that superior competence in governance. The image of the government ever losing power in China is preposterous, the fairytale fantasy comic book of a 12-year-old, and that reality has no relation to whether the official name of the party contains the word, ‘communist’ or not. Knee-jerk American patriots only make themselves look like imbeciles with such ludicrous beliefs. The very idea that any people would willing give up the best government in the world is fatuous. Only an American could think something that dumb.

    Second, the decline in growth in China is a minor occurence of trivial significance to the Chinese. Every nation’s economy is always gradually changing, and little peaks and troughs are meaningless. Mead knows this, just as he also knows most of his readers are too uneducated to catch the mistake, and he’s too lazy to write a real column on the subject, when all he needs to do is throw in the occasional ‘communist’ and he’s got all the fans he could ask for. The plain fact that Mead needs to quote one American propagandist from the NYT for his own propaganda reveals that he has no real evidence to support his absurd position. As if the opinion of an American was fact! What a cretinous premise.

    Finally, there is nothing wrong or bad in China. The country is experiencing no more difficulties than any other nation does. The petty items Mead mentions will have no effect on the future of China, the present government will still be in power 300 years from now, long after the nation of the US is dead and gone history, and if American used stocks and bonds salesmen don’t like it, that’s just too bad. The writer is simply brushing off one more brainless, sensationalistic, controversial column he doesn’t need to think about, to keep those paychecks rolling in. That is the sole meaning and purpose of this column.

  • john werneken

    China is politically ignorant economically backward militarily insignificant and would not be worth an exchange of ambassadors, were it not for its past history.

  • Stefan Stackhouse

    The one fundamental fact about China which is of greater significance than anything else:

    By definition, 50% of a nation’s population is above average in intelligence. If anything, the median for IQ in intelligence is at least as high for China as it is for the US and other countries; if anything, it might be a tad higher. Thus, given a population of 1.2 billion, this means that there are AT LEAST 600 thousand Chinese of above average intelligence, possibly more. They are also products of a culture that values hard work, attention to detail, and frugal living.

    The bane of these people throughout their history has been their government. It has been the Chinese governments over the ages, more than anything else, that has held the Chinese people down and back. Any time the government gets even just partially out of their way, then watch out! This is exactly what has happened over the past three decades. This is the big story, everything else is of secondary importance.

    This is also the fundamental difference between places like Nazi Germany, Fascist Italy or the Soviet Union. Their numbers of intelligent, hard working people would hardly populate even one province in China. That is why you can’t just take the template of past experience and expect it to fit in China’s case.

  • Some Sock Puppet

    First advisor: Really trying to get a raise from your 50 cents, neh?

  • http://facingzionwards.blogspot.com/ Luke Lea

    @ First advisor: “The government of China is legitimate and social unrest is minimal because the central government is the best, most competent national government in the world . . .”

    First advisor reminds me of one of those WWII Japanese soldiers who came out of the jungles forty years after the war was over.

  • http://facingzionwards.blogspot.com/ Luke Lea

    Let me put in a good word for the Chinese for a change. Not for the state but for the people: China has produced some of the most beautiful, talented, cultured, individuals in history. (Lu Xun is a perfect example.)

    Unfortunately those individuals have had zero influence on Chinese democratic history, whch doesn’t exist. The reason is simple: idea of voting is an absolutely alien concept. I know that is hard to believe. That’s because voting and consensus has been an element in Western thinking all the way back to the days of Sumer. But China does not descend from Sumer.

    If the liberal idea is to take root in China it will have to start from scratch. There are things we can do to help push it along but they themselves must take the first steps. They haven’t taken them yet.

  • http://facingzionwards.blogspot.com/ Luke Lea

    More on Lu Xun: Here is a good introductory essay. Here are links to some of his stories and essays online..

    If you want to compare him to anybody in the West I would say Checov — for his talent and the breadth of his human sympathies. This guy will live forever.

  • Kris

    I find First Advisor’s comment @28 to be even funnier than the updated Gettysburg Address.

  • Dick Eagleson

    On the question of when China’s current governmental form is swept away may I modestly propose that the answer is to be found by applying Eagleson’s Iron Law of Totalitarian Collapse, the relevant formula for which is Summer Olympics + 9. The Nazis hosted the games in 1936; by 1945 the Third Reich was history. The Soviets hosted the games in 1980; by 1989 the Berlin Wall had fallen, touching off a process of collapse that was so vast it took two more years to complete. The Chinese Communists hosted the games in 2008; 2017 will the year the current regime comes unstuck. You heard it here first.

  • mnjam

    Drivel

  • jh79

    I’m not sure what I’m missing, but the most important component in the long-term picture is not noted here: China’s future has already been blighted by low fertility. There is no chance that a nation with China’s demographic profile can strut the world stage. China’s population will be older than the US by at least 2030, and that presumes their fertility does not fall further (which it will). They face Japan’s future without Japan’s wealth. While we can marvel at the ChiComs’ continued dedication to the insane (and immoral) one-child policy, it should be pointed out that Hong Kong and Macau and the Overseas Chinese also have rock-bottom fertility rates without the One-Child Policy – for whatever mysterious reason, the Chinese just don’t seem to want children. (in Macau, your median Chinese woman will never have a child.) The Chinese labor force has already peaked, and while there are still plenty of farmhands who can be put into factories, the numbers available will decline more and more quickly. Chinese fertility rates crashed in the 70s – China right now is buoyed by the fact that the last pre-crash generation is in the middle of its prime working years, and that this generation has few children and few elders to support. In 20 years, this generation will be approaching retirement, with few children and even fewer grandchildren to support them. China will have to begin diverting enormous resources to social services and health care to sustain them, which will effectively eat up any possible GDP growth – and, of course, a country of old people doesn’t have much GDP growth to spare. They will have to choose to either build old folks homes or aircraft carriers, they won’t be able to do both. The Japanese have confronted their aging by investing in China – where will the Chinese invest their money? Sub-Saharan Africa? Latin American countries run by Bolivarian crackpots? Good luck with that! I see no end to America’s troubles in the near-to-mid-term, but I would not trade our problems for China’s for all the tea in you-know-where.

    @First Advisor: Mr Friedman? Is that you?

  • Bebe

    While I disagree with Prof. Mead’s conclusion that China will experience an overall economic slowdown, I do agree that the present political model is outmoded. Or as we would say in my history classes, the Party may be losing the mandate of heaven. So, as I read some of the comments, I was reminded of a recent encounter. During a conversation with friends at a business event, an acquaintance introduced a pleasant woman to me, who, upon learning that I speak Chinese, commented, “Funny, you don’t look Chinese.” I became literally breathless, and politely pretended I had not heard her. Many of the posters in general have this same problem, but the insights of Luke Lea especially exhibit the classic tyro mistake when approaching China. Of course, when one has spent much of life studying China, the particulars become of greater interest than the generalizations, so you will excuse the sharpness of my response.

    If you have found your ideas on Chinese law from Prof. Spence’s The Death of Woman Wang, realize that book is written in a delightfully sensational style like In Cold Blood, though without the monetary impetus. Check out Jerome Cohen’s writings on the modern Chinese legal system, or better search out the late Derk Bodde from UPenn, to whom Prof. Spence is greatly indebted. You’re on safer ground with Fritz Mote of Princeton, who created that school’s department along with Marius Jansen, a scholar of Japanese history. Just be aware that Prof. Mote enjoyed hanging out in the Yuan and Ming Dynasties, which, by the way, are worth-while periods to peruse so as to counteract the sweeping generalizations of which you are enamored. You might also look at Immanuel Hsu’s China’s Entrance into the Family of Nations, still relevant after 50 years, to understand the Ch’ing Dynasty’s response to European aggression. Grand histories are wonderful, often well-written, and of use to the non-specialist. The keenest example in East Asian Studies is the two-volume set, East Asia, The Great Tradition and The Modern Transformation, prepared by (among others) John King Fairbanks and Edwin O. Reischauer. Messrs. Fairbanks and Reischauer were respectively the deans of Chinese and Japanese studies in the U.S., and to read their works is to comprehend much. I count both men among my own teachers, and they are educational heroes for initiating and promoting East Asian studies in a United States ignorant of cultures beyond Europe. Still grand histories are insidious in their need to create statements of proverbial truths about the societies they attempt to reveal. Not one of us is free from cultural bias in our rendering of history, as can clearly be determined by many of your generalizations.

    I was amused by your attempt to glean political and economic trends in Chinese history through the reading of traditional novels like Red Chamber Dream, Golden Lotus, and Water Margin. You have neglected to include Journey to the West. Such novels offer social, historical, and even artistic commentary: read them without awareness of one’s own bias and cultural differences, and one arrives at the conclusions you make. You praised greatly Lu Hsun: do you know he called Chinese society cannibalistic (chih jen she hui)? A great catch-phrase I have found useful on occasions, but Lu Hsun was a good polemicist, and could ignore mutual-aid societies, Buddhist welfare, and the presence of local entrepreneurs and families to bring social uplift to their communities. No middle class? I’m sure the artisan and merchant classes might disagree, but go to Fritz Mote’s Ming studies. No division among executive, legislative, and judicial branches (how American of you)? Read the detailed monographs by Silas H. Wu on the Manchu/Ch’ing Court memorial system. Official corruption always a way of life? Not really under the Sung or T’ang Dynasties, but certainly under the Ming who reduced bureaucratic salaries perhaps because the founding emperor, Hung Wu, was once a beggar, and thus sought to relieve the tax burden on farmers and to reduce the central government by shifting oversight to the provinces (in retrospect it seems that reducing taxation and the size of the government need not lead to a stimulation in growth). As for China’s military, General Sun Tzu would certainly debate you on how inefficient it may or may not have been. Your comments on democracy in China had me chuckling in how they echoed those of the students sent by the Ch’ing Court to study in the U.S., U.K., France, Germany, and Japan so as to improve the country with foreign ideas which did not consider political or social realities. Ch’ing Court policies of low agricultural taxation caused population explosions? Let’s see: the first 100 years were quite politically stable; crops from the New World like corn, potatoes, and peanuts arrived to enhance the diet; crafts, steel, and textile industries prospered; trade with Europeans for tea, porcelain, and silk created an inflow of silver cash; and until the mid-18th century there were no internal or external wars. There is a saying, Read 10,000 books; travel 10,000 miles. Read about China, and visit China, for the study of it has no end.

  • http://knownofold.blogspot.com J R Yankovic

    “Your comments on democracy in China had me chuckling in how they echoed those of the students sent by the Ch’ing Court to study in the U.S., U.K., France, Germany, and Japan so as to improve the country with foreign ideas which did not consider political or social realities.”

    Makes me wonder if the present age hasn’t been experiencing a similar but exactly opposite problem, over roughly the past 20 years, with respect to the exchange of ideas between mainland China and the West.

    “Not one of us is free from cultural bias in our rendering of history, as can clearly be determined by many of your generalizations.”

    It certainly is vital to try to read Chinese history with an awareness of one’s own Western blinders. I was almost tempted to say that it’s equally important – and perhaps doubly urgent? – for Chinese scholars, politicians, economists, etc, to try to read Tibetan history with an awareness of their own Han Chinese blinders. It may be, too, that immense strides are being made in these areas even as we write. But even so I wonder, is their rate of progress anywhere near as satisfactory when viewed from the Tibetan as from the Chinese side of things? And might not the former occasionally wish for even faster progress in these Chinese efforts to understand Tibet?

    But then on second thought I decided I’m not so sure even about this. It is at least arguable that the Chinese are a civilization that has properly made its way and earned its place at the “table of the world,” so to speak. Whereas the Tibetans? . . .

    Those, anyhow, are the kinds of assumptions I can imagine many US political, business and academic leaders, whose preconceptions of China are by no means negative, might have brought to the discussion of Chinese issues regarding everything from minorities and religious freedom to labor and the environment. Maybe not so much nowadays, but, say, 10 years ago?

    My point is that there are all kinds of blinders and prejudices Westerners can insert into their examination of Chinese culture. And not all of them unfavorable by any means. For instance, what about the kind of scholar (and sorry, I hope you can excuse my not remembering names: though it was once a passion – and much as I once enjoyed reading, besides Fairbanks and Reischauer, Joe Levenson, Franz Schurmann and Simon Leys, among others – it’s been a LONG time since I’ve attempted any serious study of Chinese history) – what about the kind of scholar who, while not in the least excusing episodes of atrocity, oppression, corruption, etc, tends to approach even the worst of them with something like the assumption: “However reprehensible an act might otherwise seem, believe me, if the CHINESE did it, you can be sure there was a GOOD reason”? What would the polemical Lu Hsun have made of THAT “lover of China,” I wonder?

    Imagine it (though, as I’ve warned elsewhere, my imagination tends to run morbidly): Whole cohorts of elite, cultured, educated Westerners being most cheered by PRECISELY those aspects of modern Chinese political and economic life that China’s poor and voiceless, marginal and agrarian find most disheartening and hope-destroying.

    Certainly there are many voices – at least among the forums I tend to read – reminding us of the dangers of uncritical criticism. But what about the dangers of uncritical enthusiasm? And particularly of that Western kind which seems most enthusiastic about precisely those aspects of Chinese history, or strands of Chinese tradition, or layers of Chinese political culture or whatever, that are not only most explicitly contemptuous of democracy, but most disdainful of the rights, dignity and humanity of the individual (and especially of workers and the poor)? And most brutal in regard to rulers’ treatment of local communities? Which enthusiasm, I’m told, can often become even more “Sinophile” to the degree that that same “traditional” authoritarianism is yoked with modern economic dynamism and efficiency. (And while I’m sure you can cite many instances of a similar and equally brutal “dynamic” authoritarianism at work in the modern West, that is exactly my question: Is the West more likely to improve acc. to these humanitarian measures, or more likely to regress, by making modern MAINLAND China its model of development or competitveness?)

    I sincerely hope Mr Lea isn’t pretending that the particular side of Chinese history he’s highlighted is the entire picture. And yet to many Westerners, including myself, it seems to be if nothing else a very prominent, recognizable and recurrent side of the picture – at least of the past 400 or so years. I don’t believe most Americans (however deplorably ignorant we may otherwise be) are hostile to China or Chinese culture per se. But I do think many of them are concerned about this particular strain, or stream, of Chinese political thinking and behavior. Thank God it’s not the only strain – or even the most historically significant one. That alone ought to give us hope. (Speaking of which, why nowadays do I NEVER read, as a counterpoint to glib generalizations re Maoist agrarianism and Kuomintang militarism, anything about Hu Han-min, Chen Chi-tang and the 1929-1936 “Golden Age of Kwangtung”?)

    But meanwhile, the fact that democratic elements are indeed a part of Chinese political history is no reason NOT to encourage those elements, or draw on them, or work with those likeminded Chinese best able to give them renewed impetus. The pivotal question for me is this: By ignoring, making light of, minimizing or whitewashing the aspects of Chinese history Mr Lea has underlined – as I think many recent advocates of ever-closer Western engagement with Beijing have been wont to do – do we strengthen and give hope to those countervailing elements and traditions, or do we weaken them?

  • Lucian

    By the way the response was created and it’s visible partiality to the communist leadership I wonder if “First Advisor” isn’t part of the “internet security” apparatus in China.

  • http://www.tomwinnifrith.com Tom

    there will be no soft landing… never happens as bubbles burst. Second warning from me in a month – things are moving fast:

    http://tomwinnifrith.com/articles/131/china-bubble-soft-landing-my-arse-crash-alert-no-2

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