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Nov 09

Pacific Rim Shots

Written by: Steve | Filed under:General | Tags:, , , , ,
9 Comments » newest 2013-06-12 03:09:49

I’d like to announce our blog to the Fool’s Mountain audience, an offshoot of this blog written by Wukailong, whose comments and posts you’re probably familiar with, and Steve (that’s me). Rather than write specifically about China, we’ve opened it up to the entire Pacific Rim and have posted articles about many countries, though because our backgrounds are in China and Taiwan, they are the subject of the brunt of our articles.

Unlike most blogs about China and East Asia, we tend to stay away from current political affairs and are more on the cultural side, though we do dabble in politics every once in awhile. We figured the political and current event scene was covered ad nauseum by other blogs out there and didn’t want to be a ‘me too’ site. If you like music, movies, photography, culture, travel and food, you might enjoy checking us out.

We also have a continuing feature, a photo after every 3rd post, from Jesse, who lives in Beijing and has his own blog where he posts one photo per day, everyday. His headlines are as good as his photos!

As the title states, our site is called Pacific Rim Shots. You can find us here: http://pacificrimshots.com/

Hope to see you there!

Mar 23

The urban myths around China’s property bubble are as compelling as they are odd. There are tales of office blocks, towering in Shanghai, Beijing and a dozen other provincial cities, behind whose mirrored-glass exteriors is a ghostly silence. There’s the story the cycling professor noting a complete absence of lights in ranks of buildings, during the most recent solar eclipse in Beijing. Of taxi drivers who ply their trade, whilst nailing down million-dollar property deals on the phone. Of couples divorcing, so they can claim an extra share of the property bonanza. Even allegations of 60 million homes mysteriously having no electricity charges for more than 6 months. Continue reading »

Jun 26

The ECFA – where next for China and Taiwan?

Written by: Raj | Filed under:economy, General, Opinion, politics | Tags:, , ,
94 Comments » newest 2011-02-07 00:32:51

The ECFA trade agreement between China and Taiwan looks like it will be signed in the near future.

It is hard at this point to be sure of who will benefit the most from it economically. There are concerns in Taiwan that there will be a net loss of jobs as a result of the agreement. Whilst Taiwan will be able to ship goods to China with fewer trade barriers, this does not mean that increased trade will employ more Taiwanese than lose their jobs due to an increase in Chinese imports. After all, some Taiwanese bosses may just pocket increased profit, though others will see increased demand and need to employ more workers. It will be easier to consider the impact of the agreement after it has been in place for a year or two.

But now that the ECFA has been agreed upon, where do Sino-Taiwanese relations go from here? The Wall Street Journal has a suggestion.

Continue reading »

Mar 29

Note: This was submitted by Rhan on the “Cultural Differences” thread but I felt it deserved its own space for comment.

“Food is central to the Chinese psyche and I think they believe that everybody should be entitled to food whereas Westerners look at it differently.”

Sorry Steve, what I paste below is a bit long, if you think the content is irrelevant, please go ahead to delete or collapse. No hard feeling on my side. This piece was written by a friend of my few years back, whom I respect very much. My intention is not to criticize the west, but to partially answer the point raise by Chinktalk.

+++ Since the First Opium War, the vast number of Chinese masses never had sufficient food to eat. Famine was a feature of China, as it was for India for much of its history. That country had 25 famines during the BRITISH administration alone. One of the worst took place at the Deccan area, which killed over four million. In Mike Davis’ “Late Victorian Holocausts,” it was estimated that there were between 12 and 33 million avoidable deaths in India between 1876 and 1908. And as late as 1943 around 4 million died in the Bengal famine, an event that some commentators have blamed on official policy, but which others have claimed as an act of genocide. All these have not been focussed or even mentioned in passing by the West. There was no talk about the failure of capitalism, of imperialism, or even racism. Indeed, if Davis has not come out with his recent book, much of the world wouldn’t have known such things happened.

Let’s talk a bit about China’s Great Leap. That was a period of hardship or at least near-starvation as well, and indeed part of the problem was due to inexperience, incompetence, and macro-management. That’s not too surprising as, after a century of being a semi-colony, few Chinese understood the geography of China, much less how to administer the continental-sized country. Almost all of China’s main cities, rivers, and even provinces were in foreign control one way or another. Even China’s customs was in foreign hands until 1943 – a huge shame on Chinese civilization and bitterly felt by the Chinese people. The Chinese were described in travel books as incapable of logical thinking, that they were unruly and deserved to be crushed by the boots of Prussian discipline. Meanwhile, foreign-occupied Shanghai was sporting clubs with signs saying “No dogs and Chinese allowed.” This, in China! The Chinese didn’t find the West weeping for their democratic rights then. The poor, wretched, hungry masses died like flies EVERY DAY – average life expectancy was like pre-1950 Tibet – around 35 years.

If this was the situation during PEACETIME, it was worse during the war. But all things have their seasons, and in 1950 China, for the first time in over 100 years, emerged as an independent country under the Chinese Communist Party. There was much to be done, but straightaway the country was faced with the possibility of its perceived enemy at the Korean border. So Chinese troops were sent to face the armed forces of the greatest power in the world. After being the “Sick Man of Asia” for a century the country, united as never before, managed to surprise the world by forcing American troops into what Cold War architect George Kennan called “the longest retreat in US military history.” Even more surprising, it was the US that called for peace, on the threat that they would use atomic bombs if China were to refuse to negotiate.

But the war took a great toll on the Chinese, which besides the loss of over a million lives owed the Soviets billions of roubles for their often inferior armaments (only the MIG 15 was considered world class, and that too eventually was not a match for the improved American fighter jets). The country, just emerging from a century of devastation, was faced with enormous challenges both from nature and from external threats such as SEATO and the American 7th Fleet in Taiwan. China was unable to get UN help as the Americans had persuaded the world to recognize Taiwan as the true representative of all China (nowadays, with Beijing having the upper hand, the hint is that Taiwan should be independent!). Worse, Taiwanese agents were regularly sent to sabotage the mainland’s infrastructure – this was proudly shown in a magazine called “Free World” and distributed to many Malaysian schools by the USIS (my elder brother used to tear the mag to wrap his books. Once, however, I recognized the fabulous paintings of Chinese-American artist Dong Kingman, and snatched the pages from him). Threats along the coastal areas forced Mao to locate China’s industries in the hilly hinterlands, which of course was difficult and expensive. Many modern Chinese just don’t understand how difficult it was for China to develop then, not to mention the Western embargo on China of advanced industrial goods, which continues even today.

Older Malaysians – those at least over 60 – know from their geography books that China’s Yellow River was known as the “River of Sorrow.” When it flooded, millions of lives would be lost. Drought was another curse. Thus the new government started from the basics – building dams, shoring up the dikes, and planting trees to prevent desertification, cool the land and conserve water. There was little money for machinery – most were done by human labor. Yet, by the mid-fifties, the country was gaining ground – it even had some surplus grain for export.

There were often open military threats – Chiang Kaishek was probably encouraged to put the heat on China by promising “imminent” invasion on every national day in Taiwan. Meanwhile, the US had proceeded from the atomic to thermonuclear or H-bomb. China had no choice but to keep up with the R&D, and by 1958 was able to send its first sounding rockets to space.

Could it be that the progress of a few years made China’s leaders swollen-headed? Perhaps a bit of that, but the point of the Great Leap wasn’t merely a struggle to become a modern power. The mass collectivization and setting up of people’s communes was to make every commune a fortress. These communes were to make not merely basic implements for farming, but also the manufacture or repair of armaments. Mao had envisioned not only an entire country of self-sufficient farmers, but also soldiers. That was the faith he had in his people – few real dictators would dare to place arms in the hands of millions of powerless people.

The plan was good, even revolutionary, but the implementation was disastrous. First, China was such a large country that one really could not tell the peasants what to plant – they knew their land better than the leaders in Beijing. So it was an error to turn rice fields into wheatlands, or vice versa. Moreover, local uneducated cadres, always wanting to be heroes, would send glowing reports of their districts when crop disaster was staring at their faces. If China were a small country like England, things might’ve been easier. It was not that easy to find out the truth in a huge land with primitive infrastructure (a more democratic press might’ve helped, as Amartya Sen suggested).

On top of administrative failures and backward technology was one of the worst droughts in modern Chinese history. Plants withered in many places, and many people didn’t have sufficient water for daily use, not to say watering the crops. Deng Hsiao-ping, to impress his newfound foreign American friends, later claimed that about 16 million died during those years. If we take the years 1958 to 62, that would mean about 4 millions per year – somewhat the same as the Bengal famine of 1943. But I doubt that figure as many of us in Malaysia had relatives who, despite telling us of their hardships, never gave any hint of any famine. Foreign visitors, including well-known ones such as BBC head Felix Greene, reported hardships but no famine. Another reason for the numbers could be the normal deaths from decades of malnutrition: the revolution was merely eight years old and many of the survivors were born during a time when life expectancy was around 35.

But that people were in near famine conditions – that I believe was a possibility. It was brought about through over-optimistic planning, bad administration, and the worst drought in modern history. However, the 16 million, already inflated to support Deng’s “reforms”, was as usual doubled to 30 millions by the West, and a decade or so later that was doubled again to 60 millions. We all know the Western play on figures. The tens of deaths at Tiananmen was inflated to “hundreds, if not thousands” whereas, DURING THE SAME DECADE IN KWANGJU, KOREA, over 2000 students were run over by tanks and armored cars by the US supported Korean dictator but often reported as “200.” In the Korean episode, the massacre was approved, if not planned, by the US military (did the mass media report on that at all?).

Whatever the case, the Great Leap was a disaster, but the farmers knew that the drought had played a large role, and on the whole did not blame the CCP. This was proven in an indirect way: around 1962 the US, knowing that China had experienced great economic difficulties, thought it might be time to support a Chiang invasion. Chiang’s troops were ready, and so were the transport ships. The invasion was debated by Congress, and finally given up because American intelligence suggested that the peasants would rise up and demolish Chiang’s troops. The US did, however, persuaded Australia from selling grain to China – another sign how caring that country was towards the Chinese people (and the crocodile tears they shed today).

The Russians under Khrushchev did not help either: instead, they demanded that China send grain to them as part of the agreed payments for Korean War loans. That, and little else, was why China became the Soviet’s bitterest enemy, until the break-up of that country.

The Leap was the only agriculture disaster in the last 50 years. Industrially, though many of the goals were not achieved, there were progress in a number of fields. One was the manufacturing of farm products that were inexpensive yet helpful to peasants, such as a rice-transplanter machine that made backbreaking labor a thing of the past. To alleviate the energy problem, biomass – the use of rotted vegetation for energy – was used to give even the remotest villages electricity. Small hydro-electric equipment that could be placed across streams were used by poor farmers around the country: it was so useful that the product was exported to countries in Africa and especially the Philippines. Though not really a success, the experiment saw a population that began to understand the requirements for an industrial state: this experience was to pass on to a new generation which, after the Cultural Revolution, saw China’s explosive growth.

It was clear that by the 60s, socialism was the best way to develop, but what Mao saw an insidious growth of capitalist tendencies. Towns and cities seemed to grow at the expense of rural areas. New hospitals flourished, while peasants were left to their own devices. In a famous speech, he scolded the Ministry people: “Why call yourself the Ministry of Health? Why not the Ministry of Urban Health? Better still, why not call yourself the Ministry of Urban Gentlemen’s Health?”

His speech galvanized the movement of medical care to the countryside. The country began to train people in providing basic care to the poor. “Barefoot doctors” roamed the countryside, giving traditional Chinese medicines and acupuncture and helping to build sanitation facilities. Every Chinese – from civil servants to the poorest peasant – had by then been required to have a midday nap. All had to wake up as the sun rises for morning exercises. In the cities, lights were off not long after dark. Traditional martial arts were modified for health purposes. Chinese life expectancy rose from the pre-1950 35 to over 65. China’s population boomed. At the end of the 70s, it was clear that China needed a population policy. The one-child system was adopted a few years later.

But all the while, from 1962 onwards, there was much dissatisfaction among urban people WITHIN THE CHINESE COMMUNIST PARTY. These were people who’d travelled abroad and attracted by the brights lights and big cities of their neighbors. And they wanted a change in policies. On Mao’s side were young people who wanted China to continue its own unique journey, who saw the desire for personal wealth as a vice. They also thought, correctly, that those who wanted some of the old ways to return were reactionaries, for the old ways inevitably would bring about great disparity in wealth, promote a dog-eat-dog world, result in prostitution, in people believing in ancient superstitions, etc. Mao’s struggle to wipe out the old was not necessarily all that was old – that was a charge by his enemies – but the vices that he’d seen before when he was a young man. But the very idea of building the new without the old, something that demanded a total change in mentality, was not something that many party members could accept. Hence the ferocity of the Cultural Revolution.

Most of Mao’s Red Guards were young, inexperienced, idealistic students. These were no match for their enemies in the CCP, who would often put around THEIR own armband and called themselves “Red Guards.” A lot of violence were committed by these fake Maoists – which prompted a commentator to mention about “using the name of Mao to go against Mao.” But the number of deaths was never in the hundreds of thousands. Mao’s order, after all, was to “bombard the headquarters!” In other words, his enemies were within the Communist Party, and if we divide them into two roughly equal sides there was hardly a couple of millions on each side (like all conflicts, most would stand at the sidelines). Moreover, most people don’t deal with guns, and the deaths mentioned even in the West were often stuff like beatings with sticks and so on. As usual, the West and their proxies would inflate the numbers, and in this some in the present leadership would even support as justification for their present oligarchical rule.

Deng’s revision of history found much support in the West: Time magazine pronounced him as China’s greatest leader. Zhou Enlai, when asked about what he thought about the French Revolution, said “it was too early to tell.” Whether the present move to capitalism is really that wonderful remains to be seen. Much of the “success” of the new regime was accomplished on the backs of the poor. As I said before, a couple of years ago I’d even suggested on some websites a new guerilla war against the present CCP. Since then, the leadership has been focusing on helping the peasants who were and still are most responsible for the rise of New China. We just have to wait and see.

I’ve taken this opportunity to provide an alternative view of China’s history. Part of the idea is to give an inkling as to how important the rice bowl is to China. For most of the past century, rice was a luxury for the average Chinese, which is why older Malaysians of Chinese ancestry might remember the slap on their faces if they dropped even a speck of the grain. Let not any Chinese tell me he’ll rather go without food than free speech. I’m not impressed. I agree, however, that China can now afford both food and free speech. It will improve in due time, I hope. +++

Feb 08

As the Chinese New Year approaches, I think I should write some lighter posts.  So here is something funny I stumbled across on WSJ’s China Realtime Report: Continue reading »

Jan 13

Google issued a press release on their blog just a few hours ago pertaining to their operation in China. It is big news and will take some time to digest. I don’t want to comment, just get the story out.  Continue reading »

Sep 14

main_educationIn the second part of our interview with Robert Compton, We delve more deeply into his film “Two Million Minutes” which looks at the pre-university educational systems of India and China and compares them to the equivalent curriculum in the United States. Some of the topics discussed are:

1) What are the comparative number of science courses taught in high school and the amount of time spent on the social sciences and world history?

2) What do Indian and Chinese educators see as the areas most in need of reform within their own schools? Are there myths within the Chinese and Indian educational establishment as to their own perceived weaknesses?

3) How are China, India and the United States approaching the key 21st century industries, especially the ones concerning environmental and energy issues?

Continue reading »

Sep 13

Ma’s ECFA – a win-win policy or selling out local business?

Written by: Raj | Filed under:General | Tags:, ,
8 Comments » newest 2009-09-16 17:05:11

Given the recent post on the verdict in former Taiwanese President Chen Shui-Bian’s case, I thought another topic on Taiwan would be a good idea. The proposed China-Taiwan Economic Cooperation Framework Agreement is a key piece of legislation for Taiwan’s future and therefore worthy of discussion.

A question I’ve increasingly asked myself is whether this is a win-win agreement for Taiwan as the KMT and other Pan-Blues would have it, or actually win-win for a handful of big companies and lose-lose for smaller, local businesses. AFP have an article on the ECFA and its potential impact on this part of Taiwanese industry. Continue reading »

Jul 15

China auto after Detroit

Written by: TonyP4 | Filed under:-guest-posts | Tags:, ,
21 Comments » newest 2009-07-22 08:41:31

China is finally coming after Detroit from this WJS article
http://online.wsj.com/article/SB124761586630042303.html

Random thoughts.

* With the recent bad quality problems of Chinese products, China really cannot establish a name brand outside China – at least for a while. It is a good way to buy a brand name.

* Cost too much to build dealerships in foreign countries and learning international marketing and laws. It is a good and cost effective way. They are many former US dealers begging for dealership with ample of cheap retail space.

* China still lacks a lot of expertise in top auto technologies such as engine, transmission and environmental control devices. All these can be transferred from Volvo. A win-win situation.

* With China’s (or the company’s) reserve, it is a timely bargain that will return better than most of the past foreign investments, let alone the US treasuries.

* Why China will succeed in this deal?
– The $25 or so (with exception of Mexico) hourly wage cannot compete with $1 hourly wage else where.

– The huge and growing market of China itself.

– The Chinese engineering graduates are no dummies. They’re so dedicated and they work longer hours than most in the west. 12 hour work for one engineer actually equates to 16 hour work of the counterpart in the west working 8 hours when you consider coffee breaks, socializing in the office, holidays, vacations…

* It is the major part of the auto market. Electric cars from another Chinese company is a very small part of today’s auto market. I was a little surprised they did not bid on some division of GM like Pontiac.

* Volvo is a good and reliable car, but on the more expensive side. My friend after surviving from a could be fatal accident with a Volvo is buying Volvo cars for life.

Hope it will not go to Germany way to build cars so sophisticated that it is a big problem to own one in US with expensive parts and unqualified technicians.

Jul 15

This is the full session between Niall Ferguson and James Fallows at the recently held Aspen Ideas Festival. Allen had posted excepts and we promised you the complete discussion as soon as it became available. Niall Ferguson had coined the term “Chimerica” to describe the symbiotic relationship between the economies of China and the United States. He currently sees this relationship as being in jeopardy, while James Fallows feels the relationship is far stronger the most realize. This video is slightly over 75 minutes.

Continue reading »

Jun 26

Is China faking economic recovery?

Written by: guest | Filed under:-guest-posts, News | Tags:, , ,
47 Comments » newest 2009-08-16 13:51:27

I found this story on an Indian newspaper based out of Mumbai, DNA (Daily News and Analysis) on how the GDP of China, as announced by the country is fabricated and the actual GDP is much lower. They have quoted Albert Edwards, chief global strategist, Societe Generale and International Energy Agency (IEA) to come to such a conclusion. Here is the full exerpt on the story

Venkatesan Vembu / DNA

Hong Kong: Cynical crunchers of statistical data believe there are three degrees of ‘mistruths’: lies, damned lies and statistics.

Increasingly, economy watchers are beginning to believe falsehood could go a step beyond: China’s GDP numbers. Ever since the official Chinese statistical agency announced earlier this year that the country’s GDP grew 6.1% in the first quarter of 2009, there have been murmurs of scepticism about the authenticity of those figures. A few have observed that the GDP data are inconsistent with other data, such as weak power production.

Those murmurs have in recent weeks turned into a high-decibel chorus that is beginning to openly rubbish the validity of the official numbers.

“The Q1 6.1% GDP outturn is simply a lie,” notes Albert Edwards, chief global strategist, Societe Generale. “It helps explain why the Chinese data is derided by so many economic commentators.”

Commodity prices worldwide have surged in recent weeks on the hopes of a robust V-shaped revival in the Chinese economy. But Edwards, who had rightly called the Malaysian economic crisis of 1997 and the dotcom bust of 2000, believes that “to the extent that the renewed surge in commodities and the metals and mining sectors are based on the Chinese growth miracle, the markets are relying on a combination of hype, lies and wishful thinking.”

Edwards isn’t alone in questioning the validity of the official data. Last month, the International Energy Agency (IEA) observed that China’s first-quarter GDP data “does not tally with oil demand data, which contracted by 3.5% year on year.” One explanation for this, IEA analysts reasoned, “is simply that real GDP data are not accurate, and therefore should not be taken at face value.”

Simultaneously, analysts at Lombard Street Research, a London-based economic consultancy, too argued that the 6.1% GDP growth figure was inconsistent with the 20% decline in trade volumes over the same period, because it would have required domestic demand to expand by 9% in real terms. Using official nominal annual growth rates for GDP and consumption for the first quarter, and consumer and fixed investment price indices as deflators for consumer spending and investment, respectively, Lombard analysts claimed that domestic demand expanded at most by 2% year on year in real terms.

They therefore concluded that real GDP growth in the first quarter was probably slightly negative or nil at best, and even in the fourth quarter of 2008, real growth was likely negative or flat. “If so, the last two quarters would effectively signal, from a Chinese perspective, a recession of a rare magnitude.”

China’s official statistical agency, the National Bureau of Statistics, responded to IEA’s scepticism with a stern rap on the knuckles. “It is regrettable that the point of view in the… article is groundless,” a notice on its website said.

“We believe that, for an international organisation, this approach lacks seriousness.””
Even economists who point to anecdotal evidence of China’s recovery concede that interpreting official Chinese data is problematic.

“Trying to understand China’s GDP data is always a nightmare for professional China economists,” observes Credit Suisse chief regional economist Dong Tao. “Since I joined this industry 14 years ago, I’ve had this trouble, I still have this trouble, and I suspect I will continue to have this trouble.”

He points out that there is abundant anecdotal evidence of a “phenomenal improvement” in China’s economy over the previous quarter too. “Go to restaurants, talk to real estate agents, count the number of shipping containers at terminals, see the number of cars being sold… I believe in my eyes.”

The plain-speaking Edwards, however, argues that “if the bubble of belief in China’s medium-term growth prospects finally bursts, it will have huge investment implications.”

It is all too easy, he reckons, for investors to buy into “beguiling growth stories, which are in fact utter nonsense.” He concedes that China’s mammoth 4 trillion yuan stimulus has had a beneficial effect on economic activity this year, but says that he still questions the “quaint notion the markets now seem to have that the Chinese economy can grow at a respectable rate when the rest of the world is in a deep recession.”

The “bullish group think on China is just as vulnerable to massive disappointment as any other extreme of bubble nonsense I have seen over the last two decades,” says Edwards. “The fall to earth will be equally shocking.”

Now the questions to be raised here are:
1> Why would China do it? To project themselves as the new economic centre of the world?
2> Does it do more harm than good? Considering economic decisions involve a lot of speculation… if trade has picked up because of these figures doesn’t it do good for the world economy?
3> It is okay for a country (assuming this report to be true) to project false figures to prevent people from panicking?

Mar 24

In our Dalai Lama Warns of Looming Violence thread, Wukailong linked to this essay covering three political scenarios that China might face in the year 2020. The author, Cheng Li is Senior Fellow at the John L. Thornton China Center of the Brookings Institution and William R. Kenan Professor of Government at Hamilton College. His summary is as follows:

Continue reading »

Feb 24

Internal Divisions and the Chinese Stimulus Plan

Written by: Steve | Filed under:culture, General, politics | Tags:
17 Comments » newest 2009-03-04 20:36:55

I ran across this article today on Stratfor, the geopolitical global intelligence service. It discussed a side of China’s political and economic situation that we have touched upon here and there but never delved into that deeply. It highlights some of the intraparty differences within the CPC and expands on the philosophies of those factions.

I’d like to hear everyone’s comments, and especially those from our bloggers living in China, about how they view the two primary economic factions and their strategies within the party. There are several links within the article that take you to further analyses of those particular subjects.

Continue reading »

Jan 28

China and the Economic Crisis

Written by: ag2559 | Filed under:-guest-posts, General | Tags:, , ,
26 Comments » newest 2009-02-08 01:19:34

Intro: China’s accumulation of foreign currency is a hotly debated topic. Secretary of Treasury Geithner recently characterized it as “currency manipulation,” a legal term of art which allows the United States to take retaliatory measures.

I have written a paper that approaches this practice from a different angle, and recommends a different solution. The paper can be downloaded here http://ssrn.com/abstract=1332842

In this paper, I revisit the historic ideas surrounding miserliness and usury. I explain why these were economically pernicious activities, and why they were socially stigmatized or made illegal. The paper then moves onto international relations. I argue that China has been acting as miser and usurer on the world stage, at the expense of its own needs and global productivity. The world needs to balance spending vs. saving/investing/lending, and if there is too much of the latter then a rebalancing is inevitable. China has been doing too much of the latter, and the current economic crisis is that rebalancing.

The preferred solution to this problem is not trade protectionism, but rather increased trade. Over the past decade Americans have spent trillions of dollars on Chinese goods and services. This created employment in China and helped the country achieve its potential. The Chinese have responded by hoarding and lending that money. But a relationship where Americans spend and Chinese save and lend is not viable. Only when China takes the dollars Americans spend to employ Chinese, and uses it to employ Americans, will there be a sustainable relationship that can tap the productive potential of both countries. The United States has taken the first step and spent to establish this relationship. It is now China’s turn to spend, to advance that relationship.

I am interested in comments before the paper is published, so please do not hesitate to write me at the link above with any feedback.

Note: post title and content changed per the author’s request. -admin

Dec 05

Shanghai’s Tower of Babel

Written by: chinayouren | Filed under:Analysis | Tags:, , , , ,
35 Comments » newest 2008-12-09 12:19:37

If you’ve been reading the Chinese press this week, you might have come across two strikingly unharmonious pieces of information.

I am speaking of the treatment of the Shanghai Tower news by China Daily (ht Shanghaiist). In the space of 3 days from 11/28 to 12/01 China Daily has changed its tune radically in two articles about the construction of the new tower, which started last Saturday.

The first article is pretty neutral. It announces the beginning of the works, and has Shanghai CCP’s Lin Xu declare that spending on infrastructure will “help companies to weather the crisis“.

The second article, an unsigned editorial, is ripe with criticism of about every possible aspect of the project. Including some juicy ones: “symbolizes that blind worship and race for skyscrapers has reached a new high” and “The money could still be spent better elsewhere on so many priorities“.

What is going on here? Who forced this article into Beijing’s China Daily, the largest English language newspaper in China? It is a quickly written and poorly edited/translated article, someone obviously overrode the usual procedures of the newspaper to get this text to press ASAP. Someone you wouldn’t dare to edit or reject.

Continue reading »

Nov 09

China announces aggressive stimulus plan

Written by: DJ | Filed under:News | Tags:
25 Comments » newest 2008-11-13 14:49:46

I have expected some major efforts by the Chinese government to encourage internal economic development and consumption in the face of the global meltdown. In particular, I thought it would be the time to spread the benefits of infrastructure and its followup development to areas beyond the coastal areas. Nevertheless, I am surprised about the scale of stimulus package announced by Beijing. $586 billion is on a par with the $700 billion financial rescue plan passed in the U.S. But in terms of relative size and impact, the Chinese plan sounds much more impressive. That $700 billion is, after all, a rescue effort with modest effect at stimulating the economy. The real stimulus plan in the U.S., is yet to be figured out and waiting for Obama.

[Update] Here are some details of the Chinese stimulus plan, as reported in Chinese news media.

Continue reading »

Oct 29

(Letter) Crisis and The Great Wall of China

Written by: chinayouren | Filed under:Analysis | Tags:, , ,
24 Comments » newest 2009-02-04 20:45:13

During my travels these last weeks in Europe and Asia, and on my return to China, I have observed some rather striking contrasts. So much that they made me think a lot about the present state of Chinese economy, and here is a word about it.

Two different ways of seeing the world

I was in Europe for the last time the week of the “Meltdown Monday”, the one when the Lehman Brothers declared bankruptcy. Quite scary, but the news didn’t seem so surprising for anyone. Ever since the beginning of the year most people had seen the crisis coming. On the Spanish beaches, there were less tourists to be seen this summer, and the variable rate mortgages were getting stiffer for all. The governments that were not in electoral campaign had profusely announced what was to come.
Continue reading »

Oct 08

Lessons for China from the world financial crisis

Written by: Nimrod | Filed under:Analysis | Tags:, ,
46 Comments » newest 2008-10-14 18:40:00

With Iceland close to bankruptcy and the world’s financial system going to hell, China stands somewhat apart in its relative isolation. Asia Times has an intriguing article on this:

“In the past, China has been blamed for the low-degree of internationalization of its financial industries. Now it seems we are profiting from this ‘fault’,” the commentary said.

Many Chinese economists share this view. “Our not-fully-open financial system and not-fully-convertible currency saved China from being rattled during the 1997 Asian Financial Crisis. And now again this seems to be a strong dam to protect us against the current financial tsunami,” an economics researcher with the Chinese Academy of Social Sciences (CASS) said.

“It is evident that the financial industries cannot become entirely market oriented. The semi-market, semi-government-control system may prove a better [system]. The problem in China is that the part of government control is too big and thus reforms are needed to deregulate.”

In early September, Steven N S Cheung, a Hong Kong-born Chinese-American economist living in exile in China, being wanted by the US government for alleged tax evasion, claimed that China “has formed the best system in the history of human kind”.

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Sep 29

(Letter) Chinese Premier Wen Jiabao’s Interview with CNN

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3 Comments » newest 2008-10-01 20:38:32

It was on Fareed Zakaria GPS (http://transcripts.cnn.com/TRANSCRIPTS/0809/28/fzgps.01.html).

Sep 21

So let’s have a discussion on this please. How does this affect U.S – China relations. What is the ramifications for the Chinese economy, the world economy?要案 Continue reading »

Aug 05

In 2002, the GDP of China was 10.2 trillion yuan, and the GDP of the US was 10.6 trillion US dollar. At the year-end exchange rate, China’s GDP was 11.7% of the US’. In 2007, the GDP of China was 24.7 trillion yuan, and the GDP of the US was 14.0 trillion US dollar. At the end-end exchange rate, China’s GDP was 24.0% of the US’.

If we assume the relative paces of the underlining economic numbers remain the same, China will catch up the US in 2019. That’s scenario #1. The key underlining economic numbers are: nominal GDP growth and currency exchange rate. Continue reading »