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Tuesday, November 27, 2012

Back in La-La Land and a Reprise

Back in California from eight days back home in Miami. Tired and the Diplowife has me moving furniture in anticipation of the flooring guys coming tomorrow to rip out the disgusting wall-to-wall carpet at the house in So. California. This flooring operation will require me to dismantle my computers and internet for a couple of days. So, therefore, I provide a little repeat from the recent past.

 I noticed that others (here, for example) are finally catching up with the observations made some time back by this little blog that this century will not necessarily be China's Century. There are, in fact, many factors at work that make it increasingly unlikely that China will become the predominant power of the 21st century; the only hope they have, in fact, is if we self-destruct. That's possible, but the way the world is currently structured it would be a suicide-murder (as opposed to a murder-suicide): if we go, we're taking them with us . . .

Anyhow, here is a little piece I wrote almost eight months ago, which, in light of recent developments in the international oil industry, e.g., "fracking," is even more valid now than when I wrote it. By the way, two days after I posted this, my email was hacked, apparently by hackers based in China. Coincidence? I'll find out . . . I promise to write something new in a couple of days . . . back to moving furniture . . . "I used to be somebody . . . "


China's Century? Not if We Don't Give It Away

Years ago in Jakarta, I occasionally would meet, lunch, or dine with a husband-wife team of correspondents for two prominent American newspapers. They were very pleasant, had a sense of humor, and a great deal of experience overseas, mostly in Asia. They were well-educated, wrote well, and had the standard liberal biases of their class--e.g., they hated President Bush, hoped John Kerry would win the 2004 election, and viewed the United States as a seriously flawed country on the way to the dust-bin of history. They saw the 21st century "belonging" to China in the same way that the 20th "belonged" to us. They made the usual arguments about China's manufacturing prowess, well-coordinated and determined political class, social discipline, and education--which is the real kind, not the "women's studies" kind. Their writing reflected these views. This narrative continues today from other purveyors of conventional faux wisdom such as the annoying and boring Thomas Friedman, and the condescending and insufferable Fareed Zakaria.

Don't buy it. The 21st will prove "China's century" only if we destroy ourselves; but, if we do, odds are we're taking China with us--and the Chinese rulers know it (more to follow).

I love Chinese history; been to China several times; and like and respect the Chinese people--they work hard, like Americans, and want to study and live in America. I have dealt with China's very slick, tough, and well-trained diplomats. That said, I have found it impressive over the years to see how China has transformed itself from a poor, brutal, authoritarian police state into a poor, brutal, authoritarian police state with large foreign currency reserves. Sorry, but shoddily-built skyscrapers, and streets clogged with Fords, BMWs, Lexus, and Buicks, and lined with luxury stores and restaurants cannot hide the hard facts.

Confucius's 2500-year old Analects still provides an accurate account of China's philosophy of governance in which every person has an assigned role; failure to keep to it has dire consequences. I saw the repression at work in a visit to Tibet which escaped the control of our handlers. Even outside Tibet the legal system, to put it mildly, remains opaque, capricious, subject to political manipulation, and harsh. Avoid Chinese cops--who seem to be everywhere--and courts. For all the vaunted economic progress, control of the legal-political system remains with an unelected and corrupt Communist Party cadre. These rulers have agreed among themselves that not one will have the total power once wielded so disastrously by Mao. The top jobs rotate; major decisions are not made solo. Progress? I don't know. We saw a similar development in the USSR after Stalin: how is the USSR doing these days? The people remain cut out. The elite decide what's best, the people must comply--see Confucius. This secretive, stale, corrupt, aloof, and repressive system remains a major hindrance for China's development as a true power. Despite ham-handed attempts to block outside influence, word spreads of ways to live which do not involve fear and blind loyalty. We probably will not see a Chinese 21st century, but we will see a "Chinese Spring," and it could get nasty.

We hear a lot of heated nonsense about a GOP "war on women." To see a real war on women, go to China. Thanks to Chinese preference for sons, the one-child dictate means females in China are disappearing: they are being aborted, killed, and given for adoption overseas. This is gendercide, a human rights disaster of major proportions and one almost ignored. Moral issues aside, China is heading for demographic disaster. Marrying age men vastly outnumber women. Among those who can afford it, there is a hunt on for foreign brides. Large groups of young Chinese men charter planes to Indonesia, Malaysia, and elsewhere, and hold "speed dating" sessions at local hotels in the hunt for brides, stoking the anti-Chinese hatred which lies just beneath the surface of many Asian societies.

In East Asia, China is deeply feared and resented. East Asian leaders would much rather deal with the United States, and are big proponents of an active US military and economic presence in the area. They do not want China (and previously Japan) as the undisputed big gorilla in the region. As a senior Vietnamese diplomat once told me, "Everybody wants to be American. Nobody wants to be Chinese. Even the Chinese want to be American." This from a man whose father, he said, died fighting the US Marines in Hue, and whose own son was studying in California. Unless you're wealthy and can isolate yourself from Chinese reality, China is an unpleasant place to live for a foreigner, especially one from another Asian country. It has little in the way of "soft power" or uplifting universal values; it does not welcome immigrants, and views foreigners with the same sort of suspicion and disdain that Chinese citizens themselves find in much of East Asia.

Even in the economic sphere there is less than meets the eye. Most Chinese, the overwhelming number of them, live in crushing rural and urban poverty, work under appalling conditions, and suffer levels of environmental pollution and food contamination that no Western society would tolerate. The mass education system is a disaster. Increasingly foreign firms, which, after all, have fueled China's economic growth, are encountering shortages of skilled and semi-skilled workers, and are no longer quite so eager to set up shop in China.

China's banks are a mystery. They are secretive, corrupt, and work closely with the Party and the government. China pursues a policy which will be coming to the end of its rope soon, that of keeping their currency artificially low to keep exports cheap and try to keep the job creation machine churning. The central bank, which holds the largest foreign currency reserves in the world, must come up with ways ("sterilization") to sop up the currency generated in China by the influx of foreign currency to prevent inflation and prevent the Chinese currency from appreciating against other major currencies. This involves forcing the banks to keep an ever increasing reserve, and forcing them to buy low or no yield government bonds. I am no expert, but the ones whom I know wonder how long that can continue. The experts ignore another aspect to this: the overseas political side of it. China's trading partners, the US and Europe most notably, are reaching the end of their patience with China's currency manipulations. A trade war is not inconceivable; China would have the most to lose.

One of the greatest threats to China's future is President Obama. His administration's reckless spending and conjuring of dollars out of thin air, is ruining us and stretching the Chinese ability to "sterilize" the effects of all these cheap dollars pouring in. It is no wonder that Chinese authorities have been lecturing Obama on the need for fiscal restraint and budgetary responsibility. China is tied to our mast. If we sink, they go with us--their billions and billions of dollars in US bonds, worthless. Let's view it as a backhanded compliment to our silly President.

As stated at the outset, China will have as much power and influence as we let them have. China's future as a superpower will be decided in Washington, not in Beijing. Under the Communists, China has not proven an inventive or innovative society; their technological progress is bought, borrowed, copied, or stolen. The USSR tried that, too. They offer no compelling alternative vision to the West's prosperity and freedom. They can try to become a military bully, but that will go only so far in their very complicated neighborhood and with the serious structural and resource weaknesses they suffer.

China should copy and try one thing from the West it has not so far: it works in Japan, in the Republic of Korea, and, ironically, in the "breakaway" Chinese province of Taiwan. I am talking about freedom, the real kind, not the Communist Party kind.


  1. Dip, I served as vice consul in Guangzhou for two years, and have a few observations, albeit dated. Also, Chinese is my other language.

    China has some serious social tensions at work. I bought my [oversized] bagels and pizza crusts from a colony of Uighur migrants, and did I ever get some juicy cables from them (even if they spoke Chinese worse than I did). Only later did I discover that the place was a No Go zone for the local constabulary, and the local Tang Ren (or Tong Yan, as the Cantonese preferred to call themselves) thought of the Uighurs as, I suppose, your average Great Russian thought of the Chechens. Some even described conditions in "Sharki Turkistan" as a "Guerrilla war".

    Also, in the countryside, especially where everyone in a village was related to everyone else, health officers who were a little too zealous to enforce the one-child policy sometimes "disappeared" while on their rounds. The county magistrates (Xian Zhang 县长)would assure all and sundry that they "followed the center" on the one-child policy, but also reported that their counties had abnormal rates of multiple births, with the different fetuses developing at different rates. Hence, the people did have a way of "negotiating" with the authorities.

    While in Guangzhou, I discovered that a county from which my wife descends was the de facto fief of smuggling gangs. Oddly enough, those same Hakka folk smuggled themselves into Taiwan back in the days when the Qing emperors tried to limit settlement on that island.

    Finally, I noticed something straight out of Bancroft's _Moral Basis of a Backward Society_--people tended not to trust those outside the family or tribal circle.

    And, despite all you've heard about the great strides in education made in the PRC, I found that a lot of people from the southern provinces still can't speak Mandarin--including youngish folks. It was a bear for the immigrant visa processors when someone's brother or bride appeared from the depths of rural Zhejiang or Jiangxi (we were pretty well covered, though, for the dialects of Guangdong and Fujian).

    However, I wouldn't put it past official China to try something drastic in the Taiwan Strait or South China Sea. I'm sure they think America is a weak, foolish pushover now that we've elected Obama twice.

  2. Mr. Diplomad,

    I sure would like to hear your comments on this from the Canada Free Press.



  3. The chinese monetary situation reminds me slightly of Spain in 1500s' to 1700s'. How an influx of money (or gold and silver) can destroy a closed classed ridden society. Have fun in Cali., remember, Liberals are always there we they need us!

  4. Since you mention the "breakaway" province of Taiwan, I started my career as an English teacher and p/t preacher (Calvinist--not Mormon, since people will invariably think that) there. For the record, I believe that whether Taiwan calls itself the rump of the Republic of China founded in 1911, a new nation of Taiwan, Great Liuqiu, Dongning, or even Charlie, it deserves international recognition (now that I'm out of the State Department, I can say that out loud).

    Taiwan can be a rough place for a foreigner to live, too--albeit largely because it's very crowded and the water is still bad. Further, while they're very nice to you if you at least know Mandarin (and it helps if you have tried to learn something of one of the local dialects), I learned from some less self-disciplined fellow Lao Wai (佬外)that the police and judges have a presumption in favor of their own in case you get in a bar fight or get into a conflict with a racist neighbor. Further, things can be very rough for the crowds of SE Asian guest workers living there.

    While flying over there the last time to visit the in-laws, I watched a film dealing with the life of a Vietnamese bride in Taiwan. The film treated her sympathetically, but a major subtext was that she ultimately adapted to the local life. That's probably good advice for anyone who lives as an immigrant in another culture.

    Last of all, back in the early '90's, when I was in Guangzhou, and the wounds of Tiananmen were still raw, my wife's being from Taiwan was something positive to most of the ordinary people we met on the street--although they tended to be shocked at her high-quality Mandarin (ordinary Southerners aren't supposed to know it well). However, the tribalism of Chinese society came out every time we dealt with another Hakka-speaker in a store or while traveling; we got far better treatment.

  5. Lew,

    Wonderful to read your comments again after all these years. Just got back from Rome and realizing that worrying about the Republic is rather pointless. Things change and empires decline. Twenty-five hundred years later, the second-rate power is still a pretty wonderful place to visit.

    R. Roberto

  6. Off topic, but have you seen this? http://www.canadafreepress.com/index.php/article/51346

  7. I too think US declinism is quite overstated. I really think the shale gas revolution is a game changer, and that we are already seeing a rebirth of US manufacturing!

  8. Welcome back to LotusLand. Great post on China. Much more on target I think, than Mr Friedman at the NYT, and the folks at Stratfor. Passing it along to Belmont Club.

  9. @Israel attack Iran

    I've followed the shale gas revolution as a retirement investment. I'm not an expert and my opinion is only my due diligence which may be very faulty. There is concern that shale gas recovery is overstated as road to energy independence as well decline is incredibly rapid and capital expenditure in shale gas areas are high. There is lots of hype going regarding that sector.

    Nothing, but nothing, is as good as easily and cheaply accessed oil in politically safe places and they are far and few to find.

    Our "Progessive"(I'm at a loss at what to call them anymore) Overlords and their libtard science challenged followers want to burn to the ground carbon based energy by whatever means they can. Watch for every roadblock they can thow at any success in the technology or the profit of fracking.