Just listen to yourselves. Geez, you all sound like stock analysts pumping dot-com stocks in 1999. Why, you're even burbling about their space program. That is so 1957. We all know the truth about the Soviet space program, why should China's be any different? Anyone know what "we have seen the future, and it works" means? Some people never learn from history.

Oh, and that Vegas reference was particularly apt, in a perhaps unintended way.

Now everybody breathe into a paper bag, and read some of the other side...

[link|http://www.taipeitimes.com/News/archives/2001/06/29/0000092042|Shanghai miracle a media mirage]

Excerpt:

People singing the praises of Shanghai having "no air pollution, a lot of job opportunities, cheap commodity prices, and convenient transportation" should look at Asiaweek's latest figures. Pollution (dust in air): 168 micron per cubic meter in Shanghai, 52 in Taipei. Unemployment: 4.6 percent in Shanghai and 2.8 percent in Taipei. Ratio of housing price to income: 21 in Shanghai and 18 in Taipei. Average commuting time: 40 minutes in Shanghai and 24 in Taipei. Life expectancy: 71 in Shanghai and 79 in Taipei.

Another statistic is about the oft discussed competitiveness. Taiwan ranked No. 18 in the 2001 global competitiveness report by the Lausanne School of Management in Switzerland -- up from No. 20 last year. China, meanwhile, fell from No. 30 to No. 33.


OpEd: [link|http://www.jsonline.com/news/editorials/jul02/57381.asp|China's economic blind spot]

Excerpt:

Without that trade and without U.S. and other foreign investment dollars, China can't fully develop its economy and find jobs for the tens of millions of people who need them. Millions of people without jobs or prospects are the fuel for rebellion, perhaps even civil war, and the Chinese know it.

[link|http://www.tradealert.org/view_art.asp?Prod_ID=548|Congressional Commission Finds Dangerous US-China Economic Trends]

The Commission found:

-- The U.S. has been a major contributor, through trade and investment, to China's rise as an economic power.

-- There is plausible evidence that the burgeoning trade deficit with China will worsen despite China's entry into the World Trade Organization (WTO).

-- The large number of Chinese students, scholars and researchers present in the U.S. academic and industrial establishment is a principle means used by China to acquire U.S. science and technology.

-- China's manufacturing capability in advanced technology products (ATP) has expanded dramatically. The US now runs a trade deficit with China in a majority of the items on the ATP list compiled by the Commerce Department.

-- Over the next 10 years China will acquire a modernized industrial capacity to build advanced conventional and strategic weapons.

-- The United States may be developing a reliance on Chinese imports that could in time undermine the U.S. defense industrial base.

I say:

Except for that last item, this is pure Soviet Union deja vu. We all know how that turned out.


OpEd+facts: [link|http://www.taiwandc.org/wp-2002-01.htm|
China's Economic Facade]

Excerpts:

According to the Financial Times of London, Chinese Premier Zhu Rongji recently told a television audience in his country that the Chinese economy would have "collapsed" in 1998 without the state stimulus spending that is currently taking Beijing's government debt to record-high levels. Zhu Rongji is someone who chooses his words carefully, which makes the term "collapse" alarming, although not perhaps, in retrospect, surprising.

Officially, China has for some time been claiming growth rates of 7 percent or more. But information casting doubt on those figures has long been available. Visitors see lots of rural people camped out at urban railroad stations or on sidewalks: Clearly they have nothing to do where they come from, or where they have arrived. Block after block of abandoned construction projects in cities suggest someone has run out of money (as does the recent proposal that money be raised for the Three Gorges Dam by selling stock). Almost daily protests by workers, many violent, are also a clue that all is not well.

Moreover, even the official figures don't make sense: How can it be that energy use is falling in a booming economy? And unemployment rising (as the official statistics show)? This is unprecedented in economic history. Finally, the state borrowing for pump priming to which Premier Zhu refers has always been public knowledge. Why, if the economy is burning up the track, has stimulus been necessary?

Once again Chinese officialdom has put one over on Western observerdom. The shining exception is Prof. Thomas Rawski of the University of Pittsburgh, who over the past year or so has been making thoroughly empirical and highly persuasive presentations across the United States on China's economy, based entirely on open Chinese sources, comparisons with other fast-growing economies and some solid economic analysis. He argues that China's economy may actually have been contracting since 1998.

There are a number of prime candidates for the red-faced list, including the CIA and others in the U.S. government who appear to have been clueless; the high-priced reports of the Economist Intelligence Unit (which did pick up Rawski's work as it became known, but whose own work was very much consensus) and others in the premium newsletter trade, plus all the major media in the West and in Asia.

How could so many people miss something that, in retrospect, was so obvious? Because of the chronic pathologies of China watchers: groupthink (in the academy and government), fear of Chinese reaction, job pressure (in the intelligence community and the media) and greed and wishful thinking (in the case of business). Once again, we look like gullible fools to the Chinese...

The result is that today China's economy is dysfunctionally bifurcated. One side is very much consumer -- i.e., demand -- driven. That demand should elicit and mold supply, but not in China. Supply is still largely determined by the Communist Party, which allocates scarce resources to state enterprises manufacturing things people don't want and won't buy.

These enterprises are kept afloat by "loans" (never repaid) from the massive savings the Chinese people have entrusted to the state-controlled banks. Their rule of thumb seems to be: If you are state-controlled and losing money, you qualify for big loans. If you are private and growing, you do not. That is a recipe not for growth but for economic collapse.


I say:

All the prosperity you see in Shanghai can be attributed to foreign investment. There's no reason I can see to think there's much more to it than that. When China goes to war, that will dry up quickly. Their exports of cheap goods will also be impacted. Such economy as Communist China has is at the mercy of the very world their government threatens.

Well, this should do y'all for starters. If anyone makes a big deal about this, maybe I'll post more. I'm sure Doug Marker would love that.