China

Beijing Travelogue

by

Over a course of two weeks at the end of May and the beginning of June, I had the good fortune to take a class on international trade, focusing on China and the WTO, in Beijing. Naturally, I brought back many pictures, and I’ve written the trip, as reflected in the pictures, in nine parts at my blog. Not all of my reactions and reflections about China are expressed in the write ups, because there was just so much. Still, if you’re interested in what I do have up, please visit:

  1. UIBE
  2. Beijing in General
  3. Tiananmen Square and the Forbidden City
  4. The Great Wall
  5. Clubbing
  6. Food
  7. Farewell Banquet
  8. Hanging Out
  9. Post Script

Enjoy!

Don’t Drink the Water!

by

It is no secret that China’s one burning ambition is to meet and eventually exceed the United States in…well, everything! Military might, global prestige, cultural influence, space exploration. They think they should be king of the hill, and they are going to try and claw their way to the top.

Of all the categories mentioned above, it is Chinese efforts to build up their military that most Western analysts find to be the most troubling. We would welcome it if a liberal democracy like, say, Canada would actually stop the slow slide into oblivion that they have decided is the future for their armed forces. But a totalitarian state like China? Not so much.

Read more

Quote of the Day

by

One Western-trained Chinese economist said: “We just don’t know how to do capital markets. The only countries that get the message — proper financial risk accounting, etc — are the ones that were formerly in the British Empire. Anglo-Saxons seem to have something the rest of the world just hasn’t got.”

***

Asked about reserve diversification, a senior Chinese official told a leading Western banker that China took the long view: “In half a century from now, there will still be the dollar and there will still be China.” What this remark drily acknowledged was a truth overlooked by the “decline of American power” school. Viewed from one angle, the US is the world’s biggest debtor. Looked at from another, however, it has taken over the business of managing the world’s savings.

Taking note of Asian Achilles’ heel (Financial Times)

India Compared to China, Again

by

Or should I say “as usual”.

This paper, China, India and the World Economy, by T.N. Srinivasan, is worth reading, or at least skimming.

I like it because the conclusion basically says things I have long thought to be true. �China lacks some of the key institutional foundations of a market economy�, and notes that India has already created some very important institutions that China lacks, e.g. an independent judiciary, an accountable government, etc. India, due to its democracy, is slower to make changes, and it has to make compromises along the way. However, the legitimacy of these decisions is established by the process, where in China the public has to take what it gets from the leadership. This can create a false sense of stability, with major outbreaks of disorder instead of the usual friction and log-rolling of a more representative system.

Note that none of the foregoing is wishing China not to succeed. A successful China is a key to world prosperity and peace. However, the prospect of serious problems for China seems to me to get too little attention. And, the possibility of a successful and prosperous India is a prospect that seems to get too little attention.

I quote the key, concluding paragraphs from the conclusion of the article below the fold, and I highlighted the one I think is most important.

Read more

Singapore Pundit on China (and India, and Singapore)

by

(My good friend whom I’ll call Singapore Pundit is a businessman who speaks Chinese and has been in Asia, first Hong Kong, then Beijing, now Singapore for many years. SP read this post, and had a few comments. I pass on his thoughts with his permission.)

I read your post on the blog. It is a little like a University of Chicago dinner conversion in cyber-space.

China versus India? Well, I think that both the Chinese in power and the Indians in power both believe that economic development via free markets is the right path. They know that FDI and WTO are important. They also seem to agree that social and international stability are critical factors to economic growth. Interestingly, India has the Kasmir issue and China the Taiwan issue which are both lighting rods for the nationalist in their respective countries. A wrong step by either country over these issues could derail their economic development and unfortunately these issues are so emotional and sensitive that they could blow up.

I would observe that both China and India are very complex countries in all dimensions. Just think of the US and how complicated a place it is and add a few thousand years of history and triple the population and speed up the growth rate and social change and the place is wildly complex and difficult to fully understand.

So, both China and India are difficult to comprehend, hence I agree that the average American doesn’t have a good change to really understand what’s going on either place. Frankly, even the experts don’t agree on many points and have what are strange opinions and outdated views.

I have mentioned to you before that I don’t think that the central government in China and the party are that all powerful and in control. If they are unable to provide steady economic growth and the resulting prosperity and social stability, their reign of power is not going to last and they know it. They very much look to the west and other countries developed countries for models and experience to help them succeed. The big threat to the “Communist” is regional leader completely going their own way and destabilizing the whole country. The leadership in China must look at what is happening in Iraq in fear and cite it as an example of what could happen if they lose control. My impression is that debate and information is much more free in China than what people in the US realize. There is also I believe a desire in large parts of the government to get to more democratic institution and more open society. Deng Xiaoping completely changed China from a truly Soviet-style state to something that in the seventies the US government would identify as a free society (something like Korea, Thailand or Taiwan). Now all of the countries have become democracies with relatively little bloodshed (Taiwan didn’t have any major unrest, where both Korea and Thailand had their militaries killing a significant number of their citizens). This should give us hope. It is possible that China could behave like Germany and Japan in the thirties, but my gut tells me that leader don’t have that mentality.

Most of my Indian friends think that it is very difficult to get things done in India. If the government want to build a road, getting the rights-of-way is almost impossible so infrastructure needed for economic growth is not getting built fast enough. This is hampering economic growth. They actually like the way thing get done in China. It seems that India has a well developed legal system, but it is undermined by corruption.

I am going to slightly change the subject and try to rap up my comments. I saw the national day rally speech of the Singapore Prime Minister. I think you would find it very interesting. All kinds of stuff on being open and critical, taking risk, being Singaporean and patriotic. Singapore is a special one party state. And I suspect that both China and India are interested in what Singapore says and does. Perhaps this is a model of English institutes/ideas married with Chinese administration and politics.