It’s Ketchup damn it, not this abomination spelled Catsup.

July 14, 2007 @ 1:31 am | Comment

I spelled it the way Kynge does in the book. For the record, I, too, prefer Ketchup.

July 14, 2007 @ 3:23 am | Comment

“Although China is poised to overtake the UK to become the world’s fourth largest economy, on a per capita basis it ranks just above the world’s poorest nations, with an average income of just over $1,000 a year. Even if the country’s gross domestic product one day becomes as large as that of the US, simple mathematics ordains that its people at that time will on average be only one-sixth as wealthy as Americans.”

By PPP (Purchase Power Parity) guage, China’s per capita GDP is already around $8000 and is roughly one-sixth as wealthy as Americans.

Reference : https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html

July 14, 2007 @ 3:35 am | Comment

THANK YOU. Without knowing it, you just took a load off my mind.

I read this book maybe 6-8 months ago and have been meaning/wanting/trying to write a blog post on it ever since. But I found it impossible. The book is a relatively easy read, but it is packed with so much good stuff I never knew were to begin. About all I could think to say was “great book,” and “you have to read it.” It is a great book and you do have to read it and I am just so glad you are taking this one on.

When I read a book for review, I put post-its on the pages I want to go back and quote from. I gave up on this one because why bother if you are putting post-its on more than half the pages?

I too read it on an airplane and, believe it or not, the guy next to me was in the job of dismantling old US factories in such a way that their equipment, etc., could be salvaged for resale to China.

July 14, 2007 @ 3:51 am | Comment

CLB, that’s incredible. Thanks for the splendid comment.

July 14, 2007 @ 4:11 am | Comment

If you’ve ever seen a train wreck take place, it is also spectacular and a great metaphor. We are all paying a fantastic price for cheap products, not just the “other” 800 million chinese who have been pushed down so that the 400 million could be lifted up.

What’s that gelatenous material in my apple juice? Oh, coagulated lubricant.

The high price of low cost, and yet isn’t it the pro-business republicans in the US that like to lecture liberals about “no free lunch”?

July 14, 2007 @ 5:39 am | Comment

I read kynges book after your earlier post. I thought it was very well written and i would certainly recommend it to anyone interested in the rise of china. I had intended to revirew it on amazon but it seemed far too difficult, because, like you say, theres so much there. well done for penning this post.

Regarding the ‘dortmund steel mill’, I went there on a field trip earlier this year. The whole thing seemed to sum up everything that is wrong with western europe, on so many levels.

they had intended to ‘regenerate’ the space where the mill was by creating a lake and building executive flats around it, along with a nature area and an industrial park. However, nothing as yet has been built: there are boards up, glossy brochures and lookout towers but our guide thought it would be 10 years before any development would actually take place.

So, you just end up with a massive open space where nothing happens. There is no shortage of government money, or well paid people to spend it, but the reality is that NOTHING GETS BUILT. you just have people, sitting around, paid to talk to each other all day.

Could you imagine the same situation happening in China?

July 14, 2007 @ 6:16 am | Comment

Richard, where’s the post you wrote that you mentioned (2nd paragraph, but linked to an amazon.com page)? Is it one of the book reviews there?

July 14, 2007 @ 8:02 am | Comment

I read a few chapters of the book. It is well-balanced and very readable.

One thing (or rather a question) on the playing field. The whole political and economic system of the world was set up by the US and a few other rich countries. China is a late comer and has to play by the rules which are mainly benefit to the rich countries. So, no matter how much China bents the rules, I just can not imagine that it is China that has been said having the unfair advantages.

July 14, 2007 @ 8:22 am | Comment

“you just have people, sitting around, paid to talk to each other all day.

Could you imagine the same situation happening in China?”

To quote Mr. Big:

“Absof–kin’loutely.”

July 14, 2007 @ 8:55 am | Comment

well, when you put it that way……

July 14, 2007 @ 9:12 am | Comment

The link to my post on Germany is fixed, thanks.

Canrun’s quite right. Along with all the growth and competitiveness, you’ll see plenty of inefficiency and laziness here (see the post below on “Theft” for a good example). I don’t know why Dortmund has left the mill site undeveloped, but I do know Germans are among the most efficient and hard-working people on the planet (sometimes even a bit too efficient.)

Nanhe, you are on probation. If you can state your argument without hurling invective against China you can stay. So choose your words carefully.

July 14, 2007 @ 12:04 pm | Comment

Hey richard, I can see why that post was only ‘inspired’ by the book and how the discussion went in the direction of Germany’s work hour system, but many thanks for recommending the book.

As to why the vacant Dortmund site, a simple answer would be ‘less need’ IMO. The Chinese people’s appetite has been upped tremendously compared their current ways of living, so the needs are there, and over the years they sort of acquired the means too, so unless something goes seriously wrong (I know I’ll get the ‘as if something hasn’t’ scoff), the rapid growth is gonna continue for quite a while.

I remember visiting Berlin when it was dubbed ‘Europe’s biggest construction zone’ and I was almost amused and thought the ‘Europe’ qualifier was really in its place.

July 14, 2007 @ 12:31 pm | Comment

No 35-hours here, Richard. It’s 40 and more. Perhaps France but I am not sure about that.
But anyway, as you said, even if everybody would work 24/7 workers here couldn’t compete with Chinese workers.
The key is education and inovation.

I am not so sure about the Dortmund case. I would guess that the problem with it are building regulations or environmental regulations. While it is true that Germnany has far to much of them, China could do with the enforcement of some more of them, I would say. But it’s clear that buerocracy is a monster here which hinders faster developement.
Will have a look at the book anyway. Sounds interesting.

July 14, 2007 @ 5:02 pm | Comment

Put it this way: had the mill been replaced with a shopping mall, or a technology park, or a university, things would be different. But the fact that nothing has happened there , nor is it likely too, demonstrates more than just beaurocratic innefficiency. I t shows out inability to adapt in a global economy where china is increasingly setting the agenda, and makes kynges metaphor all the more accurate..

All the points about less demand, building regulations, environmental law… its all true. but the point is that you have a situation where there used to be hundreds of jobs, and now there are none: just a big hole in the ground. And, politically speaking, hte legacy of this is going to be very important over the next decade.

July 14, 2007 @ 5:24 pm | Comment

I don’t know about the Dortmund case. So I can only speculate. But it’s not the best example for Germany’s inability to adapt, I think. There are better ones.

Take for example the refusal of the government to relax visa regulations for foreign engineers who are needed because of the little economic boom and a lack of programmers and engineers here. This mentality, unfortunately, is still very common. People too often think in the categories of a nation-state and try to find national solutions to problems were you need to think global or at least European.

The Renaissance of the Left also is a good example for the narrow mindedness of many. As the Neosocialists also propagate something for which the best description would be national socialism (not the one we had before to be clear).

The development of the next ten years will be deciding. I see some progress and causes for modest optimism as more and more people realize how fundamental the world actually is changing but there for sure are a lot causes for concern too. The next eceltion will be very important, I think. If the Left wins too many seats we will have a problem.

July 14, 2007 @ 6:27 pm | Comment

I Believe the CCP’s Monopoly of Power in China is Justified

Many people criticize the CCP for being a dictatorship, being a one-party rule, being undemocratic, and being a monopoly on power in China. I Of Course agree with such assessments. The CCP is indeed a dictatorship, it is indeed a one-party rule, it is indeed very undemocratic, and it is without doubt a power monopoly. But I very much like it like that. I think the CCP’s monopoly of power is justified, and that they should continue their current monopoly of power.

CPP spent an incredible amount of manpower and resources, sacrificed millions of lives in order to gain the power. That is totally different from the ways other government’s gained their power. How many did the current Bush Administration spend on getting power to the White House? Many several hundred million dollars, many political strategists, etc That is a trivial price and effort compared to the price the CPP paid to gain control of China.

Many of China’s revolutionary leaders had to risk their lives during their fight for power. Mao was arrested once, Liu Shaoqi was arrested three times, Zhou Enlai barely survived the nationwide communist hunt by the nationalists. During the Long March, an estimated 200,000 Red Army soldiers lost their lives.

With such a party, with such an army, with such a struggle, the CPP finally won the control of China. So of course their monopoly of power is justified and deserved. There’s a famous Western saying called “No Pain, No Gain”. One CCP senior official once said to Western journalist: “You want this regime? You want us to give up power? Show me the blood of ten million of your men, and I’ll give it to you. Because that’s the price we paid for it.”

Now, we know that the CPP always use the phrase “for the people”. Well, I think they are just being polite. I never participated in the Communist revolution (because I wasn’t even born then), so I never experienced the hardships experienced by members of the CPP who fought for their power. So I fully respect their regime because they worked hard for it. If suddenly today the CCP came to my house and told me, “Math, we are going to give up this regime, you can go back to China take over this regime tomorrow.”, I’ll be so embarrassed and I would surely refuse to accept the offer. I would say “No No No, this is too much, I can’t accept it, you guys fought for it, I didn’t do anything to deserve this.” Of course, I know that many democracy lovers here would be very very happy and clap their hands if they are invited to take over the regime. They have no sense of shame.

According to liberal economics, all human resources should be privatized. Public ownership of things leads to inefficiency. Therefore, there needs to be an explicit statement regarding the CPP’s private ownership of Mainland China; that’s a step in the direction of true privatization.

There indeed is much corruption inside the CCP. But the corruption is nothing but an internal transfer of wealth. For example, what difference does it make that a billion dollars goes into the pocket of a CCP official or into the construction of roads? It is their money. You cannot dictate others how they spend their money, can you?

Of course there’ll be people who says, “But don’t you think Democracy is better?”. Of course I do not think Democracy is better. I think democracy not only is a bad system for China, it is a bad system for America too. Why would the CCP allow what is theirs to be open for discussion? I never allow other people to decide who can make love to my wife. The only person who can make love to my wife is me and me only. (Even when I think about swingers clubs, that is my choice and is not the choice of others….). And surely it’ll be illegal if someone tries to have sex with my wife without my permission. So, for all the poor, weak, undisciplined, pathetic “freedom activists”, you think you can get power by just organizing rallies and posting on blogs for 50 dollars per post? Do you even understand what “no pain, no gain” means? How childish and ridiculous.

July 15, 2007 @ 3:09 am | Comment

Argument for CCP’s legitimacy can only be based on comparisons along China’s only historical lineage. Any comparison with other countries, especially the ‘West’, would be absurd, and at best pointless.

July 15, 2007 @ 4:35 am | Comment

http://www.atimes.com

“http://www.atimes.com/atimes/Global_Economy/IG14Dj01.html”

Jul 14, 2007

The robbery of the century
By Chan Akya

I have previously written [1] about the impending failure of US mortgage borrowers, whose failure to pay would affect not only the US economy as many of them declare bankruptcy, but also worldwide markets, as the risk has been widely sold to investors in other countries, with the bulk of the losses coming in Asia.

Ratings, securitization in brief
Banks lend money to a number of companies but, more importantly, to millions of individuals. As banks themselves

borrow money from other investors in the form of deposits and bonds, they would like to sell down some assets. However, anyone buying such assets from banks would be naturally worried about the quality of assets, and hence look to the banks to do two things: first, hold enough of the risk (what is called “skin” in the game) and, second, hire an independent evaluator of these securities.

When a number of similar receivables are packaged into a bond, what happens is that anyone buying the bond is dependent on the credit quality of people he or she has never met. For that reason, the markets depend on rating agencies such as Standard and Poor’s or Moody’s, two of the largest companies that perform such services and, coincidentally, both of which are American. The third major rating agency, Fitch, is European.

To a large extent, investors depend on these ratings for determining their investment appetite. Thus if you walked into an Asian central bank and asked what its criteria are for buying an asset, it might reply that it holds securities rated above a certain level, say double-A (the highest is triple-A, the lowest is D – as in “Default”). [2]

However, there are two immediate problems with this. First, ratings are paid for by the people issuing the bonds mentioned above, not the people buying them. Thus there is a logical business reason for maintaining the rating at a higher level than is strictly warranted by fundamentals. This is called a conflict of interest.

The second problem is that ratings are merely opinions. It is a bit like a film reviewer saying that the latest Bruce Willis movie is fantastic, while it may well turn out to be a stinker for most people. The difference, of course, is that a bad film recommendation only costs you US$10 (less if you buy a pirated disc in Shenzhen), but a bad ratings opinion can cost you millions. The agencies, while sophisticated, do not know the future any more than the typical astrologer. They therefore use masses of data to justify their opinions, all the while employing analysis of historical information.

This is not the first time the rating agencies have gotten it wrong in the markets. Whether it was their wrong ratings of emerging-market countries in the 1990s, or telecom companies earlier this decade, and now securitization, the agencies have been disastrously wrong on every new market. Still, investors and regulators trust them to provide judgment, as there are no alternatives.

The markets, though, always look ahead. In other words, if an investor expects to receive less interest on a particular bond, its price will fall well before the interest actually falls. Thus it is that markets are prone to overreact to information, while ratings slowly catch up.

There are, however, a number of investors – for example, central banks and pension funds – that rely only on the rating agencies for their information. Thus they fail to act when the markets start moving, and are forced to act when the rating agencies admit that the quality of the bond is actually lower than was previously thought. These investors are called “hogs” in the market – they are fattened up and then slaughtered.

Pay differential
Of course, it is also important to note a perverse incentive structure that exists in all this. Employees of investment banks are among the best paid in the world, with specialists in fast-growing areas such as derivatives commanding seven- and eight-figure (US dollar) annual salaries. In contrast, the people buying the risk from them, such as Asian central bank workers, are paid hardly more than $20,000-$50,000, with some of the best ones paid more than $100,000. Only Singaporean government employees are paid more than their counterparts on Wall Street; this is a subject I shall return to in a later article.

When such an incentive structure exists, it is natural for many kinds of corruption to take effect, including soft practices such as banks paying for lavish dinners and ranging to more contemptible practices such as bank-employed agencies helping to pay for the tuition of children of senior government officials in the name of “marketing”.

Meanwhile, it is also important to note that there is no “crime” being committed by those buying such securities from investment banks, as they are required to invest their countries’ reserves in securities as defined by a pre-set policy. Thus no one takes eventual responsibility for losses on investment accounts, especially in many Asian countries where foreign-exchange reserves are a matter of national security, and leaks about holdings, profits or losses are punishable by long jail sentences or worse. [3]

This week
What happened this week was a result of the prices of mortgage securities falling sharply in the past few weeks. Finally on Wednesday, the rating agencies moved to cut ratings of more than $12 billion worth of bonds. This forced the “hogs” mentioned above to sell their bonds into a market that was already nervous about further weakness in the US economy.

The result was, of course, carnage. Being unable to sell all the securities they had, many of the investors had to sell other securities, including corporate bonds hitherto unaffected by the rating moves.

The immediate question arising from the rating agencies’ action focuses on timing. Why did they downgrade this week, based on information that had been available since February? The reason, of course, goes back to the conflict of interest – if agencies admitted that their ratings criteria were wrong, they would lose a lot of business. Indeed, financial newspapers have been pointing out over the past few weeks that smart investors such as hedge funds have been “short” the stock of rating agencies (or their holding companies) for precisely this reason.

As alluded to above, we can see that the extra time gave the big investment banks the opportunity to get rid of their existing positions, most often to big central banks around the world. We will know how much these banks lost, especially in Asia, only over the next few years rather than weeks.

Next steps
The subprime banana skin has thus claimed a number of victims, including Asian central banks that are forced to hold billions in US dollar securities because of their currency manipulation that pushes up reserves. It almost seems poetic justice that the manipulators are given losses by the very people they think they are helping, namely over-consuming Americans.

I believe that forced liquidation of many portfolios in Asia will create further losses, but American borrowers will emerge in essence unscathed from all this. Holders of mortgage securities do not have any claim on the underlying assets, only on the intermediate companies, which will of course declare bankruptcy, thus leaving empty shells for lenders to pursue. Unlike in previous crises such as that involving the telecom sector in 2002, most of the losses will be absorbed by central banks around the world rather than North American or European commercial and investment banks.

This is one of the greatest robberies of our time, and it will go unreported in essence. Hard-working Asian savers will see their central banks post billions of dollars in losses on the US mortgage crisis in the next few years, but nothing can be done about it given the general lack of accountability across Asia.

A more defensible long-term strategy for these central banks is to cut their reserve holdings by floating their currencies against the US dollar and invest in their own countries instead of in some distant delinquent borrower. What I wrote in the “scalded cats” [4] argument remains valid – Asians simply do not hold their governments and central banks accountable for performance. This allows all kinds of excesses to be permeated on savings in the name of national policy.

With more than $3 trillion in such reserves being invested (wasted) on low-return US and European securities just across Asia, perhaps it is time for citizens to raise the question with their central banks: Just whom are you working for, your citizens or American homeowners?

Notes
1. Hobson’s choice, Asia Times Online, March 10.
2. Wikipedia entry on ratings.
3. Examples of most secretive central banks invariably include all the major Asian countries, with no central bank other than Hong Kong submitting accounts for public inspection.
4. Asia’s scalded cats, ATol, July 7

July 15, 2007 @ 5:16 am | Comment

Ha ha!
That was a good post math.

You may have written a good description of the CCP leaders psyche.

Hey! We spill a lot of blood to gain power. Give it up? No way man! You are soooo childish.

And China? She is mine. Only mine. And no, she is not my wife. She is our concubine. We conquered her and we rape it any time and as many times as we want.

Not much different from the mindset of any other bloody conquerors.

But one day, “the party will be over”(tm)

Those who fought and died besides the Comunist, fought and died for a better life, and not for what the CCP turned out to be.
Those dead do not belong to the CCP. The CCP betrayed not only them, but also their sons.

From a citizen of a country that once had a single “party” rule and now is a democracy.

July 15, 2007 @ 6:02 am | Comment

…companies that thrive on the theft of intellectual property…

Some Chinese car manufacturers steal entire cars. For instance, two different Chinese companies have cloned the Citroen ZX.

July 15, 2007 @ 7:37 am | Comment

Nanhe, you finally put up something worth reading. But I have to disagree with your pessimistic, almost conspiratorial analysis regarding Asian central bank reserves (as that’s what my job often involves). There has been no “opportunity” intentionally given to investment banks to unload their portfolios, as you note. In fact, several investment banks have been so badly affected by their subprime portfolios that if those divisions were independent companies, they would be insolvent. (HSBC, Bear Stearns)

Also, most of the reserves the national banks hold are in government securities which will not be affected by the subprime default.

July 15, 2007 @ 10:25 am | Comment

Hey MAth, I dont know if youre a real person or whatever, but do you listen to others? Anyway, I disagree with you about the CCP having earned anything. This exercpt is a good example of how the CCP cheats. They lied their way to approval and then they just killed Chinese people to the point where people are just so afraid of them. How can you commend that for China?

They say regular political parties slaughter to conquer, but the CCP conquers to slaughter…

Evil must lie. To take advantage of the working class, the CCP conferred upon it the titles of �the most advanced class,� �selfless class,� �leading class,� and �pioneers of the proletarian revolution.� When the Communist Party needed the peasants, it promised �land to the tiller.� Mao applauded the peasants, saying, �Without the poor peasants there would be no revolution; to deny their role is to deny the revolution.�[2] When the Communist Party needed help from the capitalist class, it called them �fellow travelers in the proletarian revolution� and promised them �democratic republicanism.� When the Communist Party was almost exterminated by the KMT, it appealed loudly, �Chinese do not fight Chinese� and promised to submit itself to the leadership of the KMT. As soon as the anti-Japanese war (1937-1945) was over, the CCP turned full force against the KMT and overthrew its government. Similarly, the CCP eliminated the capitalist class shortly after taking control of China, and in the end transformed the peasants and workers into a truly penniless proletariat.

The notion of a united front is a typical example of the lies the CCP tells. In order to win the civil war against the KMT, the CCP departed from its usual tactics of killing every family member of the landlords and rich peasants and adopted a �temporary policy of unification� with its class enemies such as the landlords and rich peasants. On July 20, 1947, Mao Zedong announced that �Except for a few reactionary elements, we should adopt a more relaxed attitude towards the landlord class�in order to reduce hostile elements.� After the CCP gained power, however, the landlords and rich peasants did not escape genocide.

Saying one thing and doing another is normal for the Communist Party. When the CCP needed to use the democratic parties, it urged that all parties �strive for long-term coexistence, exercise mutual supervision, be sincere with each other, and share honor and disgrace.� Anybody who disagreed with or refused to conform to the Party�s concepts, words, deeds, or organization was eliminated. Marx, Lenin and the CCP leaders have all said that the Communist Party�s political power would not be shared with any other individuals or groups. From the very beginning, communism clearly carried within it the gene of dictatorship. The CCP is despotic and exclusive. It has never coexisted with any other political parties or groups in a sincere manner, whether when it attempted to seize power or after it gained control. Even during the so-called �relaxed� period, the CCP�s coexistence with others was at most a choreographed performance.

Sorry for being off topic, this was for Math to open his view a bit.

July 15, 2007 @ 10:41 am | Comment

You can trust a communist………

…….to be a communist.

July 15, 2007 @ 11:20 am | Comment

I’ve said this before, and I’ll say it again…”Gag Halfrunt” is the greatest blog handle ever.

Glad I contributed something meaningful to the discussion.

July 15, 2007 @ 2:09 pm | Comment

Psss, hey Math, Math, over here man. Listen…

(whispers in Math’s ear)

…Math, you’re beginning to write like a Liberal Arts major.

July 15, 2007 @ 2:46 pm | Comment

IVAN you’re back, nice to see you around.

Let’s drink some stoly the next time you swing by Shanghai.

July 15, 2007 @ 4:29 pm | Comment

“I never allow other people to decide who can make love to my wife. The only person who can make love to my wife is me and me only.”

I wonder if Math fits into this category:

– “Only 22% of Chinese reported that they were happy with their sex lives (lowest percentage on earth). The global average was 44%.”

http://www.durex.com/uk/globalsexsurvey/2005results.asp

July 15, 2007 @ 6:43 pm | Comment

The steel mill was:

Not productive
hopelessly outdated, but good enough for China.

As prices increased it would have been viable to refire the cokery, but not economically in the long-term. Instead a new plant would have been much better. Alas, the whole thing has become symbol of Germany’s intertia. But it is both, a decision on modernising or closing something down.

And just to conclude the story why that cokery was dissassembled: Using scrap is better for steel making nowadays (also because of Chinese and other emerging economy’s needs)
In other parts of Germany, Eastern Germany, a manager turned a similar plant into a scrap metal processing facility and is making brilliant money. Why make steel from raw materials if you can do it from scrap metal. Indeed, the ‘only’ investment was a state of the art arc furnace. Expensive, German-built of course.

The immigration law is a disgrace in Germany. Correct.

Yet Germany is:
Still 3rd largest economy
World’s biggest exporter
GDP growth is doing best in the EU
China will copy Germany’s job education system (which will be difficult enough but yield interesting results).

And just wait until price pressures in China push wages up (inflation and the Olypics are doing their bit, in Guangdong wages are also increasing). Then we will see how far China can shake the world. China and the world is complex and certainly economics is not zero-sum. But Germany’s competitiveness currently is No1 in the world and will probably transfer well into the next few years. Take environmental technology. The world’s shooting star in solar panel making might be a Chinese listed company, but the technological breakthroughs still lie in Germany (and of course in the US and Japan). Water filtering systems are another area….

However, how sustainable is Germany’s success in the next 2 decades? That is a question I would be willing to discuss rather than a 35 hour working week existing only on paper. Look at the UK. This soooo competitive country lost almost all its manufacturing sector but still lags behind Germany in size (although not in per capita income and grew constantly in the past decade). And in Germany manufacturing still contributes a large part of overall growth. Cynics point out that is why shops are still closed on Sundays since the service sector contributes so little to the overall economy.

July 15, 2007 @ 11:33 pm | Comment

Nice to see the blog coming back, and everything remains the same.

Have to admit that US is still the most efficient economy in the world. EU has died.

July 16, 2007 @ 4:29 am | Comment

Off topic but since Germany and Sunday was mentioned I have a question. 30 years ago or so were shops open on Sundays in Germany/UK, Europe? I remember 30 years ago many shops and stores in towns in the US were not open. That was not due to economic reasons/hardships. It was simply a day of rest. Do we really need to go shopping everyday? I think it is a good idea if we returned a shopping/business free day. Would that be so bad?

July 16, 2007 @ 9:24 am | Comment

http://www.businessweek.com/globalbiz/content/jul2007/gb20070712_852647_page_2.htm

July 16, 2007 @ 9:52 am | Comment

I have not yet read the book Richard is talkin about but, this article mentionned by nanhey above is super important.

July 16, 2007 @ 1:46 pm | Comment

China’s collapse may not come from an uprising against the government, or the PLA being smashed trying to take Taiwan or any other geopolitical scenario, but simply from the country not having enough water to drink or for food, poison/sterilizing itself, and the gender imbalance as the icing on the cake.

And Beijing is still too cheap, too stubborn and too weak in the distant provinces to stop the coming trainwreck.

And if the expat community likes to look reassuringly at its passports, remember you are being poisoned every time you draw a breath, touch something, shower, wash things or eat in China.

July 16, 2007 @ 2:16 pm | Comment

I think all this willy waving over who has got the biggest economy is a bit redundant. Surely the most important things are education, healthcare and social security administered in a socially just manner. in those terms i’d prefer the uk to the us and france or germany to the uk. it is not the size that matters, but what you do with it that counts. CCP doesn’t understand this, and that is why China is in the mess it is in.

July 16, 2007 @ 6:49 pm | Comment

Richard, glad to see TPD did not expire from bird flu as previously announced. Great post and comments, even the ones I didn’t agree with.

July 17, 2007 @ 1:58 pm | Comment

The Phoenixsee site is to be completed in 2008. In Germany the construction must be done according to the environment regulations and with agreement of local community – unlike China.
German companies do not cry about China being more competitive – they go to China and build new business. Kynge is right about many things in China, but Germany has other oportunities, especially with the opening of East Europe and Russia.

July 18, 2007 @ 3:23 pm | Comment

Joachim:

I agree that it would be much better for everyone in Europe to near-source to Eastern Europe and bring them up to speed rather then deal with *)(*@&^$$#@(* China any longer.

And maybe, just maybe the US will return outsourcing to Mexico and the Caribbean, as well as throw some respectable work to Africa.

There is no value and no need for China any longer.

July 19, 2007 @ 5:24 am | Comment

“inovation”

Europe innovative, lol.

July 19, 2007 @ 6:01 am | Comment

“I agree that it would be much better for everyone in Europe to near-source to Eastern Europe and bring them up to speed rather then deal with *)(*@&^$$#@(* China any longer.”

Yeah except their profit margins. I think you’re forgetting that Europeans are still pretty greedy.

“And maybe, just maybe the US will return outsourcing to Mexico and the Caribbean, as well as throw some respectable work to Africa.”

Hahaha, you go do that. Go run off to pure-hearted and utopian Africa and Mexico. Once you have Africa developed halfway to the point where China is, i.e in 30 years, enjoy the AIDs explosions, 44-60/100,000 crime rate, psychopathic genocidal dictators, ultranationalist terrorists and what-have-you.

And Mexico.. ahh, how nice it’d be to have 30 more Slim Helus and everyone else roasting in disease-ridden barrios.

“There is no value and no need for China any longer.”

It’s more like America and Europe will have outlived their economic usefulness if they follow your ideas.

July 19, 2007 @ 6:36 am | Comment

“It’s more like America and Europe will have outlived their economic usefulness if they follow your ideas.”

The US and Europe did just fine without China for centuries and will do just fine without China in the future.

July 19, 2007 @ 1:10 pm | Comment

The dismantling of the Dortmund steel mill is exemplary of Chinese will power. It has been done over the last two decades in numerous places. Many mills were also dismantled and painstakingly moved from eastern and central China into Szchuan and Yunnan in the 1930’s to escape the Japanese and provide manufacturing capability for the war effort. China always had the capability to do monumental tasks, so long as she harnessed and directed the spirit.

July 20, 2007 @ 12:02 am | Comment

“The US and Europe did just fine without China for centuries and will do just fine without China in the future.”

No, they won’t, because the rest of the world is going to nuke and invade these countries if they try to colonize for resources and labor again.

The only reason why Europe isn’t the backwater shithole it always was since 53,000 BC until the 1400s is because they commanded the entire world’s labor and resources with gunpowder/compass/shipbuilding transferred through the Middle East.

But then again in your populist peabrain I’m sure you’re scheming up a brilliant solution to have the 10-15 million or so unemployed in America cover 500+ million 70hr/wk manufacturing jobs, lol.

July 20, 2007 @ 3:11 am | Comment

Ferins – you said Europe was a “backwater shithole…since 53,000 BC until the 1400s”
(For full context see Ferin’s last comment).
Would you care to clarify that statement or are you only able to sling mud? I don’t wanna get into a pissing contest with you but when you make such a strongly worded statement I’d like to see it supported by some kind of evidence.

July 20, 2007 @ 1:02 pm | Comment

read up on the recent single origin hypothesis and then take a look at pre-renaissance times

the cave painting of a man standing behind a deer with an erection in modern day italy is about contemporaneous with the time china was in rammed earth walls and silk.

July 20, 2007 @ 3:20 pm | Comment

Ferins, you’re getting out of line.

Nanhey–while what you said makes sense from a geopolitical perspective, thank god the United States and Western Europe are free market economies where profits prevail over politics. And with the lack of social order in Africa (along with AIDS) as well as the lack of manpower in the Carribbean, I don’t see any nearsourcing to those countries anytime soon.

Si–you are correct. All this talk of GDP numbers used to excite me when I was an econ undergrad in college (oooooo I study those numbers for class!!! sexxyyyyyy). But honestly, a nation’s attractiveness to global talent (which is about as important a resource as oil) is quite dependent on the intangibles–freedom of speech, healthcare, the environment. And without those, I fear China may never reach the next stage of development.

July 20, 2007 @ 3:31 pm | Comment

@ferins: thank you for your thoughtful, intelligent and in-depth analysis. i will be sure to show to my friends as an excellent example of the amazing genius and analytical skills of the Chinese people. where did the 53,000 bc date come from?

@t_co: i agree. i think the main thing for China has to be the environment if they wish to keep and attract talent. many of my students who wish to go overseas cited it as a reason why they wanted to leave china. i think the whole thing about competing with china is a red herring. china can’t compete in terms of higher value products and won’t for a long time, if the quality of the majority of students i taught is anything to go by (rampant plagiarism, inability to follow basic instructions, little to no creativity, corner cutting and general laziness) japan has not grown much recently, but still has an excellent standard of living and a low gini co-efficient. surely that has to be the aim of economic expansion, not just money making for its own sake.
it also has to be remembered in developed countries these things go on population. uk and france’s gdp is about equal as is their population. germany is the largest economy and the largest country in europe. japan is larger than germany, the us larger than japan. it would be a poor lookout for the us if its economy wasn’t bigger than western europe combined, given its population is also larger than western europe combined (If i remember correctly, do correct me if i am wrong)everyone also forgets about east germany. the reunification wasn’t so long ago, and the west has had to pull the east up.

July 20, 2007 @ 8:44 pm | Comment

Hey ferins:

Here’s a shocker for you, “Otzi the Iceman” from 3300 BC had marks all over his body that were exactly aligned with or approximate to the markings for accupuncture. Now, China began using accupuncture about 3000 years ago, which falls a bit short of 5300 years ago.

Did Mediterranean people (pre-Europeans) invent accupuncture? Then *** China stole it!

July 21, 2007 @ 1:33 am | Comment

The logical conclusion is that someone had to have used a spaceship to transport him to the alps! No, Europe did not independently invent stern-mounted rudders, the compass, or discover gunpowder on their own. Textile printing and subsequent refinements were most likely independent. Learn how to make distinctions.

45-55 kya, by the way, is one of the estimates of when the ancestors of Europeans began to populate that continent.

Do I have to spell everything out for you? Jesus.

“attractiveness to global talent (which is about as important a resource as oil) is quite dependent on the intangibles–freedom of speech, healthcare, the environment”

Usually healthcare, environment (being able to breathe in the larger cities would be nice), infrastructure, business opportunities (present), crime rate (already low), etc. China needs to continue tightening things up so they can at least retain Chinese talent.

“Free speech” really isn’t as important as just letting your people publish and read well-sourced, objective materials. They see the value in keeping the lid on idiots like NHYRC/Lou Dobbs. I don’t think they see the value in having their citizens read Crackhead Nostradamus predicting the nationality of campus shooters and the economic collapse of Hong Kong.

July 21, 2007 @ 4:54 am | Comment

Si,

Chinese students are not as bad as what you described. I don’t know about your background and qualification for you to say that. I was only a little bit above average students when I was in China. I came to the US and I attended Stanford. From what I see in the US, students from China are just as good as anyone.

July 21, 2007 @ 5:48 am | Comment

“Europe did not independently invent stern-mounted rudders”

Neither did China, that credit would go to the Phoenicians, who were crossing the Atlantic at will with sextants while the Chinese fuddled with coastal fishing boats.

The compass started out as a “qi meter” and gunpowder was likely as much of an accident.

“”Free speech” really isn’t as important as just letting your people publish and read well-sourced, objective materials. ”

That is part of free speech, versus reading material bent to support a “big leader’s” philosophical leanings.

And what does the 45-55,000 years ago have to do with anything? Oh please don’t bring up “Beijing man”.

July 21, 2007 @ 6:16 am | Comment

“Neither did China, that credit would go to the Phoenicians”

Nope. China’s rudders are nothing like that of the Phoenicians and China first started using theirs much later.

“The compass started out as a “qi meter” and gunpowder was likely as much of an accident.”

They were both put into practical use immediately. Regardless, both were the result of having a well developed society and agriculture (i.e using seed drills and not just scattering seeds around to feed birds, taking the time to irrigate the land on a large scale, etc) with strong division of labor; it freed up time for more experimentation in the upper classes.

“That is part of free speech, versus reading material bent to support a “big leader’s” philosophical leanings.”

They don’t need “free speech”. Just fewer restrictions, but the CCP sees a need to filter out idiocy. No one in China listens to a “big leader’s” philosophy anymore, if you haven’t noticed. The big leaders don’t philosophize anymore.

“And what does the 45-55,000 years ago have to do with anything? Oh please don’t bring up “Beijing man”.”

Heh it means modern Europeans have been milling around for some time before humans even reached Northeast Asia (which was pretty cold and desolate at the time), Siberia, North and South America, and Southeast Asia. But they spent some 20,000-40,000 years sodomizing the wildlife.

July 21, 2007 @ 9:01 am | Comment

“china can’t compete in terms of higher value products and won’t for a long time”

They said that about every single developing country before it finished developing, heh. Including South Korea and Japan. But the CCP welcomes hubris in its future competitors. Italy thinking they’re the only ones capable of making chairs is one amusing incidence.

“if the quality of the majority of students i taught is anything to go by”

It’s not. From my experience in the American public school system, 98% of your children are practically mentally retarded. And they’re definitely not creative, unless you think scratching misshapen vaginas and scrawling misspelled obscenities into bathroom stalls is artistic genius. But America still manages to be the richest country in the world, anyhow. The high school I attended was even one of the best public schools in the nation and I live in one of the richest counties in America when I’m there.

“japan has not grown much recently”

Actually, their economy is starting to recover and is moving faster than that of the EUs or America’s. For the time being.

“but still has an excellent standard of living and a low gini co-efficient. surely that has to be the aim of economic expansion, not just money making for its own sake.”

It should be. But more and more people are getting sick of cutthroat money for money’s sake thinking. I believe China has seen that peak, and they’re slowly starting to mellow out and gain some sense, from the trends and statistics I’ve been reading about at least.

July 21, 2007 @ 9:23 am | Comment

i taught in China for nearly half a decade, at all levels. i spent much of my time reading essays copied off the internet telling me chinese people are incredibly smart and that the rest of the world is a vapid, cultureless void populated by people leading empty, immoral lives.

thank you once again ferins for your mature contribution to the debate. fyi i’m not american.

July 21, 2007 @ 5:22 pm | Comment

and i’ve spent 15 years in an american public schools learning that americans are politically retarded and most of them don’t even bother plagiarizing to make their garbage sound halfway decent.

and how economically successful is your country compared to america? ok then, so we can assume dumb students on average won’t matter that much.

stop spamming unsourced anecdotes and drawing idiotic conclusions, plenty of people plagiarize.

July 21, 2007 @ 11:38 pm | Comment

and about this:

“thank you once again ferins for your mature contribution to the debate.”

you’re welcome. sorry i came in and rained on some peoples’ china bashing parades. what were you debating again? was it the stupidity, lack of creativity, big bad racism, ignorance of chinese students or the uneconomic claim that china is worthless to the world economy?

so far there was some good discussion until people just came in to complain and not offer anything constructive, as usual, and then there was the typical doomsday scenario, anecdotes, and of course nhyrc defecating on what remained.

i assume if nhyrc’s gibberish isn’t deleted, nothing will be. so far i’ve learned cho seung-hui is a chinese national, hong kong will collapse in 10 years, the phoenicians went to great britain (just like zheng he went to america!), and the fact that american murder rates are high is a thing of national pride (we’re better with guns! **** YEAH).

July 21, 2007 @ 11:48 pm | Comment

Ferins,

I’m beginning to construct a new theory about you…

…you were created by the CCP, as an examplar to warn all Chinese people of why they should not drink.

July 22, 2007 @ 12:26 am | Comment

ferins, you are losing it, first with poorly substantiated attack on countries and civilisations that you knew very little about, then by over-reacting to plagiarism allegations. Take my advice: back off, cool down and come back again when you’re calm and collected.

July 22, 2007 @ 12:30 am | Comment

Alright. Ferins, do you want to hear some REAL China-bashing?

(Richard, please allow me license to do this, just to teach Ferins a lesson):

This is my impression of a typical Chinaman, after I spent five years in China:

“WHOOAAH! (hock! spit!) Whaaa! (The Chinaman – a CCP member – walks like a bow-legged peasant and shakes his head back and forth while he says),

“You don’t under-stand China! WHAA! (Spit, jump a queue, knock over some other pedestrians in the rudest way while you walk down the street.) Oh, oh, OHHH! You Foreigner, do NOT TALK ABOUT POLITICS! Politics can be inconvenient. Many bad things can happen! Oh, OHHH, do not talk about politics! You don’t understand China. Chinese people are (here he takes a pregnant pause)…

…PRACTICAL! Chinese people are MATERIALIST!
PRACTICAL! (This, the Chinaman says, while he is surrounded by the worst pollution in all of World History – and as for the Chinese being “practical”, he glosses over the Great Leap Forward and its famine.)…”

The Chinaman continues:

“…Chinese people, are very reserved!”

(Oh yeah. The Cultural Revolution was a model of “reserve”, and the way Chinese people shout in public is “reserved.” Insert sarcasm emoticon here.)

“Whaah, China is oldest continuing civilisation in the world!”…

…and yet, they don’t even know the most essential basics of public courtesy – which is the foundation of any civilisation….

…because Mao and the Communists destroyed China’s civilisation, at least in the PRC.

Whatever remains of the truly ancient and noble civilisation of China, survives now outside of the PRC, in places like Hong Kong and Taiwan and, yes, Japan. Actually, MOST of what remains of China’s ancient civilisation today, is in Japanese culture.

And almost none of it survives in the PRC, and all true Chinese patriots should curse the Communist Party for that.

July 22, 2007 @ 1:12 am | Comment

Uh I guess technically I was, because the CCP chased my grandparents out of the mainland onto Taiwan.

It doesn’t change the fact that plenty of people in America are just arrogant, paternalistic meddlers looking out for themselves primarily (or just venting their close-minded bitching) and with all the resources and money in the world are still too dense and uncreative or greedy to do anything to encourage China (or the rest of the developing world for that matter) to do the best thing.

It seems like many are just interested in dick-waving and confrontation when it’s been proven for what, 50 years? That that approach doesn’t work with the CCP’s hardline conservatives. Or North Korea. Or Saddam.

And yes, I know enough about history and archaeology. Enough to not spew ridiculous ahistorical claims like that of nanhe’s. Phoenicians in Britain, lol. India had lasers as described in the Mahabharata!

The reason why I bring in what some see to be irrelevant (the history of Europe) is because it totally delegitimizes arrogant claims being spewed here on morality or creativity. Maybe once you gain some sense you’ll realize that whining, hand-wringing, doomsayer/chest-thumper rhetoric gets you no where. Unless this is actually a dumpster for anti-Chinese tirades by butthurt sex tourists, then I was misled because there are mainly rational, genuinely concerned and intelligent people making the posts.

And I thought the CCP was diplomatically retarded.

July 22, 2007 @ 1:17 am | Comment

PS, and now, just for good measure, as a prophylactic against any ignoramuses who might accuse me of being “anti-Chinese” for my above comment:

1. One of my greatest teachers and mentors was the son of Chinese immigrants, whose parents escaped from China to the West during the Japanese invasion. He taught me how and why to love Chinese civilisation – the civilisation which Mao and the Chinese Communists destroyed. And he also taught me how and why to love Japanese culture. I repeat: he is the son of Chinese refugees from the Japanese invasion, and yet he taught me how to love Japanese culture – because he is a true warrior, and this is how true warriors think. And it breaks my heart (and it breaks HIS heart a thousand times more) to know that there are very few true warriors left in the PRC.

2. Throughout my five years in China – and even now, in my new home in a Western country – I had a Chinese coin minted at the beginning of the Tang Dynasty, the time of my favourite Chinese poet, Li Bai. (aka Li Po.) I kept it on top of my computer throughout my five years in China (and it’s on my computer now in this Western country), to inspire me to write well.

3. The main reason why I hate the CCP, is because they destroyed Chinese civilisation.

4. Just a bit of ephemera, when I was seven years old, my first girlfriend was the daughter of Chinese immigrants in America. She took a special liking to me because I was so sensitive and intelligent – which is typical of women who come from REAL Chinese culture, quite unlike the women of today’s PRC. 😉

July 22, 2007 @ 1:34 am | Comment

Despite #4 being a little gross, I can understand- only I know I share roots with people on the Chinese mainland so insults tied to genetic determinism (and don’t deny there have been many of them) are insults to people from Taiwan; regardless of how much some of them might deny their heritage.

But I wonder how much anyone knows about “Chinese culture” when they think Starbucks, McDonalds, and sex-tourists-slash-businessmen slobbering over China with their pants around their ankles is anything like Chinese society. Where were they when warlords were ravaging the ROC? Or when Japan first started attacking in 1937? Or during the Long March and towards the end of the civil war?But I digress.

Mao’s hell transitioning into mini-America into uber-America (i.e eating the world to death with its excesses) is something that would make any real Chinese person lose their lunch. It’d make you sick too once some charismatic fool goads the rural theist voter bloc into permitting a launch of biological agents at Taiwan, Japan, America, Britain (can’t forget the Opium Wars) and Russia.

My general observation of most of those complaining on this thread is that their views lie on ideological spectrums and is grounded in ineffective, confrontational measures; i.e saying things that will just piss 95% of (PR)Chinese people off and make them (and thus their connections) more nationalistic.

Just rambling, though.

July 22, 2007 @ 1:54 am | Comment

I admire many individual Chinese, especially those that are tilting at windmills against corrupt officials and rapacious businesspeople. But since coming to China two years ago I have found that I admire the country and its culture less each day. I really don’t think the Chinese have much to be proud of. Much of the culture is destructive. People only care about money – only in Tibet will you find spirituality. China seems to be a society without a soul – at least a soul that non-Chinese could recognize. China may be booming but I see nothing to be proud of.

July 22, 2007 @ 2:18 am | Comment

China now isn’t even Chinese. Mao killed that.

But don’t pretend they’re the only ones who want money. They’re poor.. what’s everyone else’s excuse?

July 22, 2007 @ 2:43 am | Comment

Ferins, please take my friendly advice to chill-out before you come back again. You are making no sense. It’s rather dumb to have responded to Nanhey’s provocation. It’s even worse when you actually quoted him wrongly. Nanhey never said anything about “Phoenicians in Britain”. You did. Your problem is not so much with your lack of knowledge in history or archaeology. It’s got more to do with the fact that you don’t read. So go and read Nanhey’s comment again if you really want a good argument with him. Otherwise, don’t bother.

As for your other comments:

“only I know I share roots with people on the Chinese mainland so insults tied to genetic determinism” – No, you’re wrong. The target here is the Chinese Communist Party, not the Chinese people. Why do you as a Taiwanese find it necessary to defend the CCP? I don’t understand. Please enlighten me.

“Where were they when warlords were ravaging the ROC? Or when Japan first started attacking in 1937? Or during the Long March and towards the end of the civil war?” – you are not seriously blaming expats in China today for what happened in China prior to the founding of the PRC? So are you telling me that the corruption of the Chiang Kai-shek led KMT regime, the power struggle within the CCP and the inability of the 2 political parties to form a united front against Japanese invasion did not contribute to the suffering of Chinese people during WWII and the civil war?

“My general observation of most of those complaining on this thread is that their views lie on ideological spectrums and is grounded in ineffective, confrontational measure …” – So are yours. And you don’t even read before you start ranting.

July 22, 2007 @ 2:51 am | Comment

Heh, he said “sailing the Atlantic”, trying to draw modern connotations. There’s no point in trying to have a “discussion” with him, since he lack basic reasoning skills.

The things I write make perfect sense; comments by most from the U.S on China are idiotic. They’re about as far from reason as CCP propaganda. Only they are on the opposite side.

July 22, 2007 @ 4:33 am | Comment

so ferins, what you are saying is you lack a response. All you can shout is “bah, mantou!”

July 22, 2007 @ 5:13 am | Comment

er, you’d have to say something worth responding to.

bragging about gun deaths in america was a good one. it takes a lot of skill to shoot your wife from 2 feet away!

July 22, 2007 @ 5:31 am | Comment

ooh, good one.

But not as good as chinese parents who toss their kids out of apartments to show power or get revenge.

July 22, 2007 @ 4:01 pm | Comment

I probably shouldn’t reply – but just for the record.

Obviously my comments are “unsourced ancedotes” – they are my ancedotes. I don’t pretend to have any deeper knowledge than that. I didn’t say that Chinese students are stupid, just that in my experience lazy and propaganda spewing. It is a shame.

Certainly plenty of people plagiarise. I don’t recall arguing that China is unique in this.

Nevertheless I didn’t think these charges were bad enough to warrant the spleen and the attempt to insult me by saying that Europeans used to sodomise animals. As Fat Cat said reading carefully what people write will be helpful.

And again, I am not an American.

Anyway I won’t reply to any of ferins’ comments, as it seems to merely wind him/her up further

July 22, 2007 @ 4:57 pm | Comment

“ooh, good one.

But not as good as chinese parents who toss their kids out of apartments to show power or get revenge.”

a nice read for you would be the statistics on country and crime rate.

japan, korea, china, taiwan, hong kong, along with middle eastern states (sa, qater, morocco) occupy the bottom of the list, despite poverty, crowding (causes stress), etc etc.

keep the anecdotes, ahistorical claims, and unfulfilled prophecies coming.

“I didn’t say that Chinese students are stupid, just that in my experience lazy…”

http://news.bbc.co.uk/hi/english/static/in_depth/uk/2002/race/educational_achievement.stm

http://www.asianweek.com/2001_07_13/news07_satscores.htm

“Europeans used to sodomise animals”

http://en.wikipedia.org/wiki/Historical_and_cultural_perspectives_on_zoophilia

A cave painting (photograph) from at least 8000 BC in the Northern Italian Val Camonica[4] “depicts a man complete with full erection standing behind a female deer.

http://www.archaeometry.org/images/sxc6.jpg

“Anyway I won’t reply to any of ferins’ comments, as it seems to merely wind him/her up further”

Guess people don’t like it when they get bashed back.

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