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The Great Fall of China
The Biggest Reason to Fear Economic Trouble in China

China has been working to instill more patriotic values in its students, the New York Times reports:

Chinese students, already immersed in classes and textbooks that promote nationalist loyalty to the Communist Party as a bedrock value, must be made even more patriotic and devoted to the party, even when they are studying in universities abroad, according to a new directive sent to education officials.

The directive, issued by the Communist Party organization of the Ministry of Education, calls for “patriotic education” to suffuse each stage and aspect of schooling, through textbooks, student assessments, museum visits and the Internet, which is the chief source of information for many young Chinese.

This story points to the biggest reason to fear economic trouble in China: not the gloom and doom from outside analysts, but the mounting evidence that the Chinese government is in some sort of panic about the loyalty of its citizens. We’ve had the purge, we’ve had trouble for foreigners, we’ve had crackdowns on human rights NGOs and Christians, and the propaganda at last week’s New Year’s Eve celebrations was noticeably shriller than usual.

Meanwhile, the people who know China’s situation the best, who have access to inside information that the rest of us don’t, have been giving pretty clear signals that they are terrified of unrest. And while the accelerating capital flight from China has a lot to do with the economy, it is another sign that insiders want out for other reasons, too.

Something big seems to be happening in China, and the increasingly desperate attempts by the regime to assert power suggest that the people who run the country are losing their confidence in the future. Even more than collapsing equity prices or a volatile currency, the political situation in China should make everyone very, very worried.

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  • Jim__L

    They’re worried they have lost the Mandate of Heaven, or whatever secular communists figure is the modern equivalent.

    Historically, this is accompanied by the some of the most vicious “kill everything that moves, burn everything that doesn’t” wars humanity has ever seen. In fact, World War I was *not* in its time the most lethal war in history — one (maybe two) of China’s infamous dynastic collapses claimed the “bloodiest” honor. (Death tolls in the mid-10 millions, proportion of population slain sometimes as high as 50%). It took Europe *two tries* to have a war as bloody as a Chinese dynastic collapse, and Europe had to drag the rest of the world along with it to get the numbers over the top.

    So, from a Risk Management perspective (percent chance of risk times severity of risk), the Chinese may not be applying these mitigation measures because they fear collapse is a high probability. They may be applying these measures because they know exactly how appalling those collapses tend to be.

    • Dale Fayda

      The Taiping Rebellion and which other one?

      • Jim__L

        Apparently the An Lushan rebellion and the Qing conquest of the Ming could both qualify as bloodier than WWI, depending on what estimates you believe. The Three Kingdoms period beats them all, although that’s a series of wars.

        https://en.wikipedia.org/wiki/List_of_wars_and_anthropogenic_disasters_by_death_toll

        From a purely humanitarian point of view, I’m not sure that I blame them for wanting to forestall another of these “interesting times”. Of course, they might try a pluralistic democracy with periodic votes instead of wars…

  • Dhako

    Aah, the wishful thinking of the collapse of China, is still strong in some quarters. Perhaps, its the anxious feel some are having about the contradiction of what the American’s exceptional-ism was supposed to be about. And of course, the ugly reality of seeing the likes of Donald Trump making the running (or running circus around every political assumption of what respectable politics was supposed to be about) makes some exceedingly nail-biters.

    Moreover, given the fact that the promise of America Dream, in which the alleged exceptional-ism was always based on, seems to be turning out to be hollow and a cruel con for many people in America, particularly the Blue-Collar industrial workers in many Rust-Belt regions in America, may account for the desire to see ill wind blows for others, indeed

    Hence, the notion of wishing the collapse of China in which many in the West deeply harbor, is really akin to that old truism of: “misery loves company”. Since many in the West, and in America in particularly, are having a miserable time in their politics and seeing the clearly the contradiction in which the conceit that America political exceptional-ism was supposed to be based on.

    Consequently, I do not begrudge some in the Western’s Geo-political strategists community in their thinking, that, if, as it seems to be apparent now, that their “End of history thesis” is not coming through (at least for China), then at least lets hope that other political template (such as the Chinese state-led capitalism and development) should be at least as fraught as ours is, or should have within it the possibility of it’s own demise like ours is, as the phenomena of Trump and Sanders are proving it.

    Or failing that, they seems to be saying, lets talk up, ceaselessly, the possibility of others, like China, collapsing out of its economical contradiction, as ours is helping to unravel the conceit that was American Dream, which was predicated, that if you try hard enough, then the world is yours.

    Subsequently, it seems that its race to which system has inherent durability. And since the likes of Trump is already indication of the metastasizing political cancer within America’s political template; then, its obvious which system is speedily losing its legitimacy. Contrary, to whatever the likes of American’s strategists – like Walter in here – may wish for China. But, we shall see,

    • Pete

      Ah … the Chinaman has spoken. Thank you for your … er .. “insights?”.

    • Jim__L

      I wish this post had not been so fact-free. I think it would be interesting to see what evidence Dhako can present to back up his one-upsmanship.

    • Angel Martin

      speaking of indoctrinated overseas students…

  • Anthony

    You cannot understand the vulnerable state of the U.S. and global economies – and nervous stock markets – without coming to grips with the crash of “emerging-market” countries. Led by China….” http://www.realclearpolitics.com/articles/2016/02/10/the_crash_of_2016_129631.html

  • christophergreen

    The Chinese Communist government shouldn’t have anything to fear about their students in U.S. universities. They get a very strict socialist indoctrination in our universities.

  • Jacksonian_Libertarian

    China has a history of violent bloody revolution, and the corrupt and incompetent Chinese Communist Party officials are right to be worried that they might soon be hung from the lampposts. No nation in history has seen such massive capital flight in such a short period of time, $1+Trillion in the past year, or close to 6% of China’s GDP. So we don’t know really what will happen to China’s economy, just that it will be very bad, and the Chinese people are going to justly blame the Government.
    The commonly used method for politicians faced with such an economic problem is to deflect blame onto foreigners, and start a war to generate patriotic support. So China will likely go to war, which will see a strategic blockade of their ports, and then they can blame the foreigners for the bad economy. None of which will change the fact that the Chinese Communist Party is incompetent and corrupt, and will eventually have to face the music.

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