He forgot the exchange rate. If Yuan takes the same route as Yen in the 70s to 80s, the Chinese GDP can overtake that of the US within a decade.

But it doesn’t necessarily mean China overtaking the US though. The US will still be wealthier and more advanced in innovation and scientific research.

February 27, 2008 @ 12:59 pm | Comment

On the one hand, panda licker academics love to flaunt these numbers to bring attention to their careers. On the other hand, if this news, true or false, gets Americans off of their asses, that is a good thing.

February 27, 2008 @ 2:55 pm | Comment

Newsflash: the American public is poorly. Pardon me while I pick myself up off of the floor.

The wonders of a free media hasn’t managed to explain the link between Iraq and 9/11 (or even the absence of ghosts) to the American public… I don’t have much hope it’ll be able to explain global economics.

Remember that in the 1930s, China’s per capita income was not much below that of Japan and Taiwan, and I believe it was higher than that of South Korea (although perhaps not of the more highly industrialized North Korea, which anyway put into place some of the same policies that China had before the Deng Xiaoping reforms, and suffered a similar fate).

… you read this paragraph, and still recommended this article as being excellent? This paragraph must be referring to some other planet, because it’s surely not referring to the earth that I recognize.

Ignoring the fact that there was no “North” and “South” Korea in the 1930s, his out-of-ass analysis of the numbers are more than a little incorrect. Chinese GDP per capita was approximately 1/4 that of Japan, and about 1/3 that of Taiwan during this time period. And this analysis ignores the effects of WW2, as well as the Chinese Civil War. It also ignores the importance of average literacy/education rates during the same time frame, which were unfortunately glaringly different between China and Japan+colonies.

By the way, one measure of how implausible the idea that China’s GDP will equal that of the US by 2050 is precisely that it would require Chinese per capital income in 2050 to be equal to or more than US per capita income today. Anyone who has traveled though China will find that a little hard to imagine.

Anyone who has traveled through China 40 years ago would *not* find it hard to imagine. I think its safe to assume the author did not do so.

All in all, although I’m far from impressed with the author’s rather casual grasp of facts… I don’t really have a problem with the conclusion. Really, who cares whether China’s economy as a whole will be larger than the United States’ economy in 2030, 2050, or 2070? Is someone keeping score out there?

China’s economy will continue to grow. An average 6%-8% growth rate for the next 50 years seems well within grasp. And for the Chinese people, that translates into continued improvement in standard of living and growing international influence.

That’s good enough for me.

February 27, 2008 @ 3:27 pm | Comment

Thanks for your criticisms of the article, CCT.

Nanhe, I am going to ask you to refrain from using the term “panda licker” on my blog. You have called me the same, and I find it revolting. I wouldn’t call you a “dog licker” or anything even close. It’s a crudely pornographic phrase and I don’t like it. Thanks for your understanding.

February 27, 2008 @ 3:34 pm | Comment

Some questions?

If China economy were as big as US economy how rich would be a Chinese person compared to an US person.

If an average Chinese person were as rich as an US person, how big would then the Chinese economy be?

If China standard of living were the same as, for example France, how many resources would it need?

February 27, 2008 @ 3:41 pm | Comment

So let me see if I understand this…Ferins, CCT, JXie, Math and God knows who else can spout all kinds of crap here about wishing cancer on Kikes, but Nanhe gets a warning with “Panda licker”??

Pornographic? Please!

Something is just very wrong there, Richard. Very wrong, indeed.

February 27, 2008 @ 4:43 pm | Comment

It’s not really all that hard to understand why 40% of Americans believe that China is the world’s largest economy when more than 40% of Americans can’t even tell you where half of the other countries are located in the world (let alone their own national capital).

Still, I think there are a lot of other things to take into consideration such as, the level of education and the rate of business growth in both countries. There are a lot of other factors to think about but those are the first two that come to mind.

February 27, 2008 @ 7:47 pm | Comment

“it doesn’t seem that informed opinion in China takes the results of this survey very seriously.”

Agree with CCT: “China’s economy will continue to grow. An average 6%-8% growth rate for the next 50 years seems well within grasp. And for the Chinese people, that translates into continued improvement in standard of living and growing international influence.That’s good enough for me.”

In 1900, Great Britain was the Richest in the world, with the Largest military, was the Center of world business and finance, had the Strongest education system & Currency, and was the world standard of value with the Highest standard of living:
In 2006, there were 1.3 million US college graduates, 3.1 million in India and 3.3 million in China. Chinese Honor students alone out populates the entire population of America. 100% of the 2006 college graduates in India speak English.
In 10 years it is predicted that the number one English speaking country in the world will be China. As Karl Fisch puts it, “Shift happens.” Hopefully towards world peace.

February 27, 2008 @ 9:45 pm | Comment

I think a more accurate number to shoot for is “When will China reach half the size of US?” And that seems likely to happen well within the realm of most people’s informed imagination.

I think in 10 to 15 years China will be half the size of US.

February 27, 2008 @ 11:42 pm | Comment

Ecodelta, Ireland overtook the UK in per capita GDP a few years ago, yet today an average Irish is still poorer than an average British, who has longer time to accumulate more wealth. In that sense, China’s national wealth won’t immediately match that of the US, if China’s GDP is bigger.

As to resources, a combination of things will happen when China (for that matter, India and other developing nations) is getting richer:

* Resources will become more expensive.
* Alternative means to these resources, and alternative resources will be better funded and utilized.
* People will cut back their usages.

February 28, 2008 @ 1:27 am | Comment

The following is not a very scientific calculation, but it gives you a rough idea. Let’s assume that the average growth rate is China 7% and USA 2%.

Nominal GDP (trillion USD, exchange rate not considered)

Year | China | USA
2007 | 2.87900 | 13.75000
2010 | 3.52690 | 14.59161
2015 | 4.94666 | 16.11032
2020 | 6.93794 | 17.78709
2025 | 9.73083 | 19.63839
2030 | 13.64799 | 21.68236
2035 | 19.14201 | 23.93908
2039 | 25.09126 | 25.91243
2040 | 26.84765 | 26.43068
2041 | 28.72699 | 26.95930

PPP GDP (trillion USD)

Year | China | USA
2007 | 7.04300 | 13.86000
2010 | 8.62798 | 14.70834
2015 | 12.10119 | 16.23920
2020 | 16.97254 | 17.92939
2021 | 18.16062 | 18.28798
2022 | 19.43186 | 18.65374

So yes, China will overtake the US in a few decades (depends on how you calculate it) in GDP terms. However, in GDP per capita terms, it will take China more than a century to catch up. Also, it will take China much, much longer to catch up in military power, technology, innovation and cultural influence etc.

February 28, 2008 @ 2:25 am | Comment

> Also, it will take China much, much longer to catch up in military power, technology, innovation and cultural influence etc.

I’d have to respectfully disagree on this part. Cultural influence, technology, innovation, and military power aren’t necessarily tied to having the largest economy. There are plenty of examples throughout history to confirm this.

I don’t see any reason to think that China won’t be able to duplicate what Japan/South Korea/Taiwan has achieved in terms of technology and innovation.. but on a much larger scale. It took those other economies about 4 decades to catch up (and surpass in some cases) the rest of the world. I would say China is in the 2nd decade of a similar process. I would say that in 2 more decades, mainland China will be where Japan/South Korea/Taiwan is today in terms of technology/innovation, on the cutting edge of world development.

And in 50 years, its scale will be far larger than all of them.

February 28, 2008 @ 3:13 am | Comment

CCT:”””””China’s economy will continue to grow. An average 6%-8% growth rate for the next 50 years seems well within grasp. And for the Chinese people, that translates into continued improvement in standard of living and growing international influence.

That’s good enough for me.””””””

http://www.reuters.com/article/environmentNews/idUSPEK15525020071029?pageNumber=1&virtualBrandChannel=0

By the time you realize your precious goal of catching up with ‘development’ the rest of us who have been there and done that will be finding new ways of recovering what the CCP is destroying right now at a sickening speed.

Why do you want to follow the materialistic model? Isn’t air more precious than commodities? Westerners made a big mistake in ditching culture and slowly adopting the religion of materialism (in my opinion) and I think it was so bad that the CCP has made a madate of emptying peoples minds of anything that matters in pursuit of this dangerous ‘progress’. Anyway, they are CCP, they have to replace natural and free thinking with some absolute dogma otherwise people might start asking for a better life than the CCP can allow….

http://time-blog.com/china_blog/2007/10/chinas_birth_defects_rising.html

Theres a commentor there John Smith and I cant tell if he is joking or not. His immitation of CCP lakey is spot on if he is joking and if he is not it is shock to humanity and a terrible disgrace.

February 28, 2008 @ 3:47 am | Comment

snow,

I grew up without color TV, air conditioning, indoor plumbing, more than one change of clothes, toilet paper, or a hot water heater. I grew up squeezing myself into commuter buses and sleeping on the floor of long-distance trains.

I grew up without much milk, without fruit other than small bananas, and with only small portions of meat a few times a week. I grew up biking to school in the rain, sleet, and snow because there was no other transportation available.

Because I’ve lived without those things, and because I now have those things, I can absolutely tell you I treasure all of these “materialistic” things above the larger issues that currently concern the developed West. And the truth is, far too many Chinese are still living without these basic “materialistic” things.

I don’t mean to downplay the importance of environmental preservation. Hopefully a balance can be found. But you don’t have the right to downplay the importance of “materialism” unless you’ve actually lived in that type of poverty.

I’ll note that with all of the West’s love for preserving the environment, precious few of you have actually willingly given up your standard of living to achieve it. Buying carbon credits, using canvas bags, and driving a cooking-oil powered station wagon isn’t at all the same thing as living in a dark hut without electricity and basic amenities. Don’t ask the Chinese to sacrifice something you, and the rest of the American public, wouldn’t either.

February 28, 2008 @ 4:06 am | Comment

One thing that I noticed in China, as a possible obstacle to economic growth, was the differences in the legal system’s approach to business. On one hand there seemed to very little control of private Chinese companies, and very little chance of a consumer or an employee gaining any legal redress if they ever feel abused in their dealings.

The other issue is that the banking system is still mostly controlled by the government and bottleneck this creates when entrepeneurs are looking for startup capital.

If my perceptions are correct (I’ll admit my evidence is mostly anecdotal), it seems like these will be huge problems to overcome before China can hope to obtain the economic sophistication of Japan, Australia, North America, etc.. I suppose that China may overtake America’s GDP, just by sheer volume, but that really doesn’t mean much in and of itself. Anybody got any thoughts or sources on this?

February 28, 2008 @ 7:10 am | Comment

@Lime,

I think your observations are absolutely correct on all accounts.

There’s very little effective regulation of (domestic) private enterprise in China today. It’s the Wild Wild West, really. Private enterprises very have a tendency to cheat when dealing with customers, employees, and even government.

This is what happens when the legal + enforcement system is just about absent, or prone to abuse and corruption.

Government’s cheated on a daily basis. Capital registration requirements are treated as a joke; tax evasion is extremely common, almost all companies keep two copies of the books on hand… government policies are flouted in every way imaginable.

One quick example: the government provides favorable tax terms to businesses led by a) veterans and/or relatives, b) laid-off workers from state-enterprises, c) disabled people. And numerous (small) businesses therefore “hire” one of the above 3 as the legal representative of the company… disabled veterans are probably in very high demand.

Government has focused primarily on resolving major political issues so far. For example, resolving the very common case of fraud involving wage payments to migrant workers. (Migrant workers are often paid only at the end of the year; far too easy for “employers” or sub-contractors to skip out after work has already been done.)

All of the other issues are much harder to tackle. It will take… years? decades?… until this stuff is resolved.

But let’s keep in mind that the above corruption is common in every developing nation. Anyone who’s dealt with (for example) India or Mexico know that bribes for civil servants are a standard operating procedure. I think the only way to eliminate this corruption quickly is to return to the totalitarian government of Mao’s era (which many in China argue should happen). The only other alternative, IMO, is to grow the economy.

There aren’t many corrupt rich nations. When people have more to lose from cheating than they have to gain… that’s when the situation will finally change. When people working within the rules have the ability to buy homes/cars/luxury goods, while those caught cheating lose everything… things will get better.

Let me also give some credit to the United States government here. American businesses are (now) some of the best behaving in China, because starting in the last few years, American-based management can be charged under the Foreign Corrupt Practices Act if they’re found to be involved in corruption overseas. And from what I’ve seen/heard, it really effects the way these companies compete in China.

Frankly, this is the kind of constructive “interventionist” policy from the United States that I’d like to see more of. A million times more constructive than the “human rights dialogue” Congress would instead prefer to focus on.

February 28, 2008 @ 8:24 am | Comment

Ugh more innumerate garbage from ersatz intellectuals of the New York Times caliber.

First things first, China’s per capita GDP was significantly lower than the rest of Asia during the pre-war Republican era, even adjusting for PPP

See here
http://www.iisg.nl/hpw/papers/debinma.pdf

Per capita GDP was 3.5x lower than Japan, 2.3 lower than Taiwan, 1.3 lower than Korea, and 30x lower than the United States.

Secondly in regards to the so-called demographic crisis. The entire issue is a myth cherished by some for whatever odd reasons. The most important thing to remember is that productivity is the most critical factor to growth, and not warm bodies. Labor force size increases much lower than labor productivity. Capital formation in China and underutilized labor within the Chinese workforce have decades to go before they even begin to approximate OECD standards. It is impossible to approximate the real impact of a declining workforce for China because the composition of it’s economy is so unique and the data used so imperfect. The author admits the monumental problems, but makes a proceeds to make a half-assed guesstimate anyway.

The environmental factor is a whole lot of bullshit. Every developing economy trashes their environment. However, everyone also manages to salvage it once per capita incomes rise. Nature is far more resilient than most people give it credit for. He fails to recognize environmental trends already existent in China where areas of high per capita GDP in China are not only more environmentally aware but also willing to spend more to clean up their environment.

Comparing future per capita GDP to today’s GDP in the manner he has done is quite frankly absurd, and his conclusion that it is impossible is flawed. Employing similar logic, one realizes that China’s per capita GDP today is actually equal to that of the United States circa 1964. i.e. that is the average Chinese of today. This argument is specious of course because it ignores a boatload of mitigating factors but you get my point why this kind of analogy cannot be drawn.

To cap things off, all his numbers are based on simple exchange rate comparisons of GDP. It is almost a certainty that exchange rates today will not be where they are 10 years from now let alone 40.

February 28, 2008 @ 8:32 am | Comment

@canrun

It was a bit shocking to see how long hongxing’s post about Jews and Caucasians stayed up on this board. But overall I’d say Richard and his supporters have “Stockholm syndrome”.

February 28, 2008 @ 11:43 am | Comment

All of these comparisons regarding Chinese growth at x% overtaking the US do in fact not include the fact that Beijing has repeatedly stated it needs about 10% annual GDP to maintain economic expansion and maintain a socially stabilizing level of employment (it may actually be 9% with a cushion added).

The population bubble is not factored in by many of the straight line growth theorists here and in western academe. If you income grew by 7-10% every year but you had little if any social safety net, had to pay tuition for your one child and had to support you and your spouse’s parents (and possibly grandparents) on your income then your income growth would not be so great. Several articles, including one by Andy Xie, discuss most of China’s growing consumerism to be restricted to household items and at best a small car. To even to have the money for an infamous “shopping tour” of Europe, Canada, Japan, Oz, etc is to be upper middle class.

And the environmental factor cannot simply be dismissed because even the worst period of the West’s industrial revolution did not also see massive water resource depletion and many of the chemicals that pollute today’s China simply did not exist 150 years ago. Just look at the chemicals and metals used in the electronics industry. 150 years ago the electronics industry consisted of light bulbs and telegraphs and the chemical industry was confined mostly to the laboratory and military applications.

Add to that the fact that 150 years ago the legal systems in the US and Europe were still much stronger than in China today.

February 28, 2008 @ 11:54 am | Comment

kebab boy: It was a bit shocking to see how long hongxing’s post about Jews and Caucasians stayed up on this board. But overall I’d say Richard and his supporters have “Stockholm syndrome”.

Listen, moron – I am working off-site in a very demanding project. I have tried to explain many, many times that I am too busy to read every comment. I didn’t even know until now that there WAS a new hongxing comment. Not everyone has the luxury of sitting in front of a computer all day and night to troll the blogs. Why don’t you get a life, and stop trying to brand me as something I am not. It’s not only a lie, it’s boring.

February 28, 2008 @ 1:47 pm | Comment

@CCT
“I think the only way to eliminate this corruption quickly is to return to the totalitarian government of Mao’s era (which many in China argue should happen). The only other alternative, IMO, is to grow the economy.”

That’s an illusion. Return to Mao’s era will not solve corruption problem. I will just hide it. It is always the same old story, a big father figure that will solve everything. Same psychological need everywhere.

Growing the economy is not enough. Its like trying to escape forward. Without any measure of accountability or eligibility that could throw out most corrupt officials and give a measure of protection to normal people, corruption (among other things) will continue and even deepens.

Lack of a rule of law, and independent arbitration system is also a major problem.

Corruption basically is inherent in the system. The only anti corruption policy of the government is to chop from time to time the heads of those that go to far. Beyond that, is business as usual.

Any policy that could effectively put some restraint to the corruption would also put in question the legitimacy of the CCP. That is a big NO NO. It is a devil’s circle in the end.

Beside corruption, other problem is the miss allocation of resources and big projects decided on prestige reasons. There is little restrain and protection against arbitrary decisions for most part of the population.

Could all this put brakes to the grow in China (a risk by itself) or trigger a major crisis (economy, environment)?

February 28, 2008 @ 2:50 pm | Comment

@nanheyangrouchuan,

Well, I wasn’t sure you had it in you to make reasonable arguments. But you did very well above.

First off, the notion that China has to grow at 10% “or else” isn’t completely true. It’s only true in the sense on the short-term, in the sense that China has invested in urbanization and infrastructure projects that will only be sustainable with that level of GDP growth. But over 20-30 years, 6-8% growth rates is acceptable IMO.

On pensions…. While Chinese GDP has been growing at 10% annually, average wages in China has *not*. Wage growth in China has significantly lagged GDP growth. (This is a sore point for many urban Chinese, by the way.) And the reason for this is partly what you said above: a need to capitalize pensions, health insurance… and of course, build more physical infrastructure.

This has been progressing nicely in much of China. I don’t personally know the current situation in *every* region of China… but the few urban regions I have personal experience in, pay-in pension plans are now available with very fair terms. And I’ve also heard anecdotally that rural health insurance (as of 2007) is now also widely available.

I for one think there’s going to be a huge “insurance dividend” as rural residents can spend with greater confidence, leading to a surge in Chinese consumption over the next 2-3 years. (Which also means higher inflation… oh well.)

But yes, you bring up good points about potentially the level of environmental damage in China… no one really knows the long-term cost of some of what’s being done right now. It is worrisome… but as I said before, I don’t see an easy alternative.

As far as the legal system in US/Europe… 150 years ago, England was throwing debtors in prison, while United States law allowed men to be owned/sold as property. The Chinese legal system under imperial dynastic rule was also very sophisticated, arguably (in my opinion) more so than the European versions.

Clearly, China has regressed on the legal front. There are many reasons, from bad political rule (Communist extremism) to poverty (literacy in 19th century Europe was far higher than literacy in mid-20th century China).

But the bottom line is, as of 1980… you could probably count the number of lawyers in China on one hand.

The legal profession in China is really being recreated from scratch; many of the most *senior* practicing lawyers on the mainland today don’t even have undergraduate degrees. And don’t talk to me about judges and the prosecutors of the Procuratorate. The institutions are pretty broken, and will remain broken for decades.

February 28, 2008 @ 3:11 pm | Comment

@ecodelta,

Growing the economy is not enough. Its like trying to escape forward. Without any measure of accountability or eligibility that could throw out most corrupt officials and give a measure of protection to normal people, corruption (among other things) will continue and even deepens.

Well, you’re probably talking about “accountability” as a form of protection to normal people. I’m willing to consider the possibility.

But can you help me understand why this type of corruption remains endemic in democratic countries like India and Mexico, and how/why China will be different from those examples?

February 28, 2008 @ 3:14 pm | Comment

Geez, sorry again. The last post was supposed to read:

Well, you’re probably talking about democracy as a measure of “accountability”, and a form of protection for normal people. I’m willing to consider the possibility.

But can you help me understand why this type of corruption remains endemic in democratic countries like India and Mexico, and how/why China will be different from those examples?

February 28, 2008 @ 3:16 pm | Comment

1: the data should be nominal, not real.

2: two percent nominal growth for the USA is unprecedented.
— Past 50 years: average 7.1% p.a.
— Past 35 years: 7.2% p.a.
— Past 20 years: 5.5% p.a.
— Past 5 years: 5.7% p.a.

3. When looking far into the economic distance, go an equal distance into the past. So, for the outlook to 2050, look back to 1966. The table above that runs to 2041 suggest the 35 year time frame, which means that something around 7% should be the average annual growth rate for the US economy . . . in nominal terms !

Results? US$129.1 trillion US economy in 2040.

For China, the average nominal growth since 1978 has been 15.7%. The past 15 years were 15.1% and the past five years 15.4%. Call it 15%.

Result? Rmb2,483.4 trillion in 2040.

Observation: For the Chinese economy to be the same size as the US economy in 2007 would require an exchange rate of Rmb1.8:US$1. In 2026, that can be achieved – based on 7% and 15% growth rates – with an Rmb7.0:US$1 exchange rate, and in 2021 at Rmb4.9:US$1.

Make your exchange rate assumption, and the answer pops out very easily.

– – – – – – – – – – – – – –

The key is nominal, not real growth rates !

February 28, 2008 @ 5:09 pm | Comment

Someone remind me- what percentage of Americans believe in the existence of Satan?

February 28, 2008 @ 8:50 pm | Comment

Hello CCT

Corruption index

US: 5
Spain: 41
France: 48

singapore: 2
Japan: 17
taiwan: 25
Korea: 41
Malaysia: 51
Thailand 54

Mexico: 44
India: 115
China: 128

Source: http://www.heritage.org/research/features/index/countries.cfm

China is way way behind.
India is closer to you than many other democracies, but I have the feeling chinese prefer to be compared against other coutnries….
And you should try to get the best not the worst of each sytem….. Dont you think?

There is always a level of corruption. The question is how capable is the system to cope with it,or at least keep it at manageable levels and its consequences
There is shit everywhere, the trick is that it should not overflow the sewage system 😉

The problem in China, in my opinion, there is nothing to check it. Worst, it is ingrained in the system. Maybe even to the point that people is not aware when doing it.
Have seen some curious “cultural shock” with Chinese people in Europe about it.

Corruption waste a lost or resources, produces lots of inefficiencies in economic/social system and can also generate quite a bit of social unrest
These are things China do not need.

February 28, 2008 @ 9:07 pm | Comment

@cct

“But can you help me understand why this type of corruption remains endemic in democratic countries like India and Mexico, and how/why China will be different from those examples?”

an excellent point. one possible answer would be that the real cause of corruption is a huge gap between the richest and the poorest, and in terms of wages, govt officials tend to be poor. hence they make up the gap through kickbacks.

obviously one solution is a openly transparent system which makes it (1) easy to catch and punish criminals which hopefully leads to (2) reduced corruption due to fear of being caught. (ie the risk/reward ratio isn’t so enticing)

however i would argue the ultimate solution needs to be a more equitable society where ppl have reasonably equal opportunities for healthcare, education and a decent standard of living. if these are affordable corruption goes down as the risk/reward ratio is further reduced (why bother stealing when you can get the things you want fairly easily anyway and a large theft is likely to be noticed?)

assuming this argument is accepted, how do we get from the situation china is in now to the more equal society when it is corruption that is preventing this transition?

i’m buggered if i know, and i don’t think hu jintao does either.

@everyone

generally speaking i think the whole idea of china “catching up” is a total misnomer. where china needs to “catch up” isn’t gdp, but living standards (which can be indicated by gdp, but is no guarantee). what is easily forgotten is that the us is a outlier amongst developed nations (little public transport, minimal social security, no free or very cheap healthcare) rather than a standard example. the average wage of the uk surpassed the us and france, but personally i’d rather live in france given the choice of those three. the uk would be last choice given the cost of living in the uk is far more than that of the us and france.

February 28, 2008 @ 9:15 pm | Comment

Si’s argument that the solution to corruption is to create a ‘reasonably equitable society’ is at least partly true. It might kind of a chicken and an egg type argument though, as, I would think that one of the biggest obstacles to the equitable society is corruption. But to me, the solution to both corruption and the lack of equability seems to be intuitive; democracy.

In a democratic state keeping ‘the shit in the sewers’ should become a priority for the person at the highest level as their career can be ended by too much of it flowing onto the streets and annoying the electorate. Along with the leader/party, the careers and investments of a whole spectrum of other people who have attached themselves in one way or another to the ruling power are likely to suffer, so it’s in everyone’s interest to keep things looking reasonably clean. I know that the conditions in India contradict this argument, but perhaps there’s something else at work there. Anybody know much about Indian politics or India in general?

As for the equitable society, democracy should have the same effect. If there is the capacity to generate a great deal of wealth in a state, and especially if it’s generated through the participation of the majority of population, as opposed to say investment and reinvestment of money outside the country by the very wealthy, or a few land owners receiving royalties from foreign oil companies drilling in the country, the population grows weary of the wealth accumulating in the hands of the few and will eventually vote for a party/leader who promises to bring in wage laws and working condition standards and so on (20th century Britain and America are probably the best examples of this).

But then I got thinking; maybe this is another vicious circle. China, unlike India, has the capacity to generate wealth through the participation of most of her population. Having an extremely developed industrial infrastructure has allowed China to become the world’s number one producer of things that don’t require a lot of technical skill; toys, clothing, plastic bags, component parts of more complex machines designed and assembled outside of China, etc.. But maybe China’s able to do because it isn’t a democracy. If they were a democracy, people would do just what I’ve said; get tired of working for next to nothing and vote in a government that promised to put some labour/wage laws in place. Wages go up, cost of production goes up, and suddenly China’s not the cheapest place to get your plastic toys manufactured in anymore.

Sorry for the long post. Anybody got an argument against my theories here?

February 29, 2008 @ 1:03 am | Comment

@Richard;

You’ve got a cadre of site monitors who also watch for that type of stuff. There is a serious issue with literal racist comments by Chinese posters that linger on this site much longer than any China critiques by someone like me.

@ CCT

Last I knew, only hukou holders had access to the “three golds” in Beijing and Shanghai and that those were the only two areas with significant social safety nets. Shenzhen might have one as well due to its pretty high local GDP.

And while there may be some sort of safety net in the rural areas, the general quality of care has plummeted as all of the good doctors and nurses have sought greener pastures in urban areas or even as TCM doctors in the West.

As for the US/W. European legal system in the 1850s, there were alot of bad laws, but the courts still functioned as they do today, interpreting and enforcing existing laws. And it was the courts that started ruling against slavery and debtor imprisonment after 1850 and even before it.

February 29, 2008 @ 1:30 am | Comment

@Richard;

You’ve got a cadre of site monitors who also watch for that type of stuff. There is a serious issue with literal racist comments by Chinese posters that linger on this site much longer than any China critiques by someone like me.

@ CCT

Last I knew, only hukou holders had access to the “three golds” in Beijing and Shanghai and that those were the only two areas with significant social safety nets. Shenzhen might have one as well due to its pretty high local GDP.

And while there may be some sort of safety net in the rural areas, the general quality of care has plummeted as all of the good doctors and nurses have sought greener pastures in urban areas or even as TCM doctors in the West.

As for the US/W. European legal system in the 1850s, there were alot of bad laws, but the courts still functioned as they do today, interpreting and enforcing existing laws. And it was the courts that began dismantling the slavery system in the US.

February 29, 2008 @ 1:31 am | Comment

@ecodelta,

> Source: http://www.heritage.org/research/features/index/countries.cfm

I think you’re confused. That’s not a ranking of corruption, it’s a ranking of “economic freedom” (government involvement in the market).

This is what’s typically used in an attempt to “compare” corruption levels:
http://www.transparency.org/policy_research/surveys_indices/cpi/2007

China is tied this year with India and Mexico. (In previous years, it held a substantial lead.) China is significantly ahead of democracies like Panama, Thailand…

> And you should try to get the best not the worst of each sytem….. Dont you think?

Of course, I think/hope/pray China should get the best of everything, if possible. I’d be happy to see China eliminate corruption tomorrow, if there was a magical switch.

But what is that magical switch? Is it democracy? And if its democracy, why are India and Mexico just as corrupt as China? And why are so many other democracies *more* corrupt than China?

February 29, 2008 @ 2:02 am | Comment

@Si,

I think I agree with you on just about everything you said.

I don’t think anyone has a clear concept of how to quickly solve many of the social and economic issues facing China today. Chinese policy makers have been saying for *decades* that they’re “摸着石头过河, crossing the river by feeling for stones”.

This is a candid admission of humility: Beijing doesn’t know nearly as much as the internet geniuses out there, in terms of how to solve many of the issues facing China today. I think those who put themselves in Beijing’s shoes, and stopped to think about problems very specifically, would realize how difficult the task is.. and probably make many of the same policy decisions that Beijing has made.

February 29, 2008 @ 2:14 am | Comment

@Lime,

> Sorry for the long post. Anybody got an argument against my theories here?

I don’t. I think you’re exactly right.

Let’s pretend you just landed from Mars, and have no preconceived notions about the merits of democracy versus authoritarian rule versus anything else. All you can look at is recent world history, and what’s actually happening.

India is *not* the only example of a democracy that’s filled with corruption, and unable to solve her deep rooted social/economic problems. I don’t think for a second there’s anything particularly unique about India. Look at the “democratic” nations of Central and Latin America; do the track record for these countries show much progress in terms of eliminating corruption, reducing economic inequality, and improving standard of living?

The world is currently filled with corrupt, economically bankrupt, suffering-filled democracies. I don’t mean to imply that democracy creates this condition, as there are plenty of dictatorships filled with more than its share of suffering.

I believe your theory is basically correct: populism in democracies make it very, very difficult (maybe impossible) for a developing nation in today’s modern world to reform itself and grow into developed status.

There simply aren’t any successful examples of a democratic developing nation. (Slight exaggeration: I’ve heard Costa Rica is successful, and has been a long-time democracy.)

I think everyone who’s interested in this topic has the responsibility to think on this question. Why should China, a developing nation of 1.3 billion people that’s finally making economic/academic/social strides, make political reforms that sound ideal on paper, but have utterly failed in the real world?

February 29, 2008 @ 2:25 am | Comment

The environmental factor is a whole lot of bullshit.

It’s true that many environments get trashed in the process of “modernization”, but factors like population density can change how much it impacts human life. China needs to press hard into research on this area; and the whole thing is being bogged down by a lack of transparency.

There is a serious issue with literal racist comments by Chinese posters that linger on this site much longer than any China critiques by someone like me.

Actually there are a couple of posts by random people asking for genocide of everyone in China, but they were pretty far down and were probably missed (everyone else had stopped posting). I’m not even going to get started on the “Are Chinese Men Effeminate?” thread.

why are India and Mexico just as corrupt as China? And why are so many other democracies *more* corrupt than China?

Think it has more to do with education and having an equitable society. China needs increased wealth, better courts and more accountability on the part of officials for this. They need to relax some draconian laws as well, and allow people to publish whatever they want as long as it’s well sourced and peer-reviewed (keep the lid on ridiculous op-eds and propaganda pieces however).

Hopefully Chinese people will grow closer to Chinese culture and (moderate) Confucianism rather than draw upon individual consumerist hedonism for moral guidance. There’s room for NGOs and Overseas Chinese to help on this as well. Seems like the best bet for now.

I don’t see any reason to think that China won’t be able to duplicate what Japan/South Korea/Taiwan has achieved in terms of technology and innovation

Japan and Korea were limited by their isolation and lack of natural resources. If the CCP decides not to be stupid and enables the most intelligent Chinese in science and cultural development China could probably start producing high technology at an earlier period of development.

The reason why Japan and Korea grew slower in the past was because of their lack of resources (land, labor, farmland, natural resources). China’s development model is different, and while they need to learn from the “Tigers”, these factors along with the PRC’s huge population has to be factored into growth models.

I think it’s mostly the intelligence and work ethic of Chinese people producing everything good about modern China, in spite of the CCP bungling things up.

February 29, 2008 @ 2:36 am | Comment

Let’s pretend you just landed from Mars, and have no preconceived notions about the merits of democracy

It depends on what you mean by democracy. However the notion that every person over a certain age has equally valid opinions, and should thus be entitled to an equal vote, is fundamentally idiotic imo. The poll in the original post shows this well; at least 40% of Americans and people in general are dumb.

The quality of the electorate thus dictates the quality of candidates; and historically both have been shit. The idea that democracy is needed for developed status, especially in the context of how a nation interacts with the world at large, is a truism established after the fact. Even now, democracy has shown to be a huge failure in the last decade for America, Taiwan and Japan. Same goes for Pakistan.

China doesn’t need democracy to develop and shouldn’t even strive for it; just rule of law, government transparency, etc etc etc. Bringing back (objective and reformed) tests of merit as qualifiers would help as well. i.e no retards like Bush or Chen would ever have a chance at leading a nation.

February 29, 2008 @ 2:49 am | Comment

@ferin

I think you have a fundamental flaw in your conception of democracy’s purpose. The point of having a democracy is not to have a fast moving dynamic government with brilliant leaders. The point is to have a system that resists any dramatic change allowing the system to adjust itself gradually when there is some threat to the well being of the electorate. The vast majority of people will sacrifice any lofty political/social ideal to vote against any threat to their personal well being. This doesn’t require them to be smart, just to be capable of noticing when they’re getting poorer or when crime is getting out of control in their neighbourhood. This is why the Kuomintang is going to win the upcoming election despite the unpopularity of their stance on China.
What this means is that the candidates in an election usually run on very similar platforms when it comes the important standard of living effecting issues and differ most significantly on issues that bring out violent emotional reactions in a minority, but don’t effect the day to day lives of most (i.e.; gay marriage, marijuana legalisation, capital punishment, Taiwanian ‘identity’).
It also means that, because it requires a great deal of resources for a candidate to have a reasonable chance of winning an election, they must be tied to a whole network of other people; their party especially, but also businesses that donate, journalist and academics that write about them favourably, and so on. The huge number of people with interests at stake in an election have to make sure that the candidate is not going to do anything too stupid or dangerous, so they almost always select exactly the same kind of mediocre person. George Bush, Bill Clinton, Tony Blair, Koizumi Junichiro, Benjamin Disraeli, Chen Shui-Bian, John Howard, Kevin Rudd, look as far as you like. All smart, but not brilliant, men, willing to conform to the interests of their parties and supporters which meant, in part, maintaining policies that didn’t upset the electorate too much.
Mistakes are made of course, but almost never ones that will seriously damage the country in the long run. I’m sure Richard and others will disagree with me, but neither the Iraq War nor the US housing bubble is going to come anywhere near sinking the US state (and for the record I’m not implying that either was necessarily a mistake of the Whitehouse). Point is that you don’t get any Caesars or Peter the Greats in a democracy, but you don’t get Caligulas or Maos either.
The Chinese government is kind of a compromise right now. The general population has no political power, but it’s not being allowed to accumulate in the hands of one individual. By keeping party at large as the power broker, with many stakeholders, its actions remain rational, much like the Roman Republic. This system, while maintaining the integrity of the overall state, fails to respond at all when the happiness and well being of the average Xiao Ming is threatened.

February 29, 2008 @ 4:20 am | Comment

@CCT

Yes, you are right. That is the economic freedom not the corruption index.

A interesting links to democracy and corruption here

http://www.un.org/esa/desa/papers/2007/wp55_2007.pdf

“The acceptance of corrupt practices is culturally undemocratic. Democratic institutions are expected to diminish the possibilities of corruption in government, but there is an expected relation between a democratic political culture and corruption permissiveness as well.”

But

“The efforts to measure perception of government corruption are only one side of the coin. The other one centers on the extent to which mass publics are becoming more or less likely to tolerate or accept some corrupt practices in society.”

My comment. If f the public tolerate or accept corrupt practices the democratic system will not act effectively against corruption. If there is low corruption permissiveness the democratic system will tend to curb it.

What is the situation in China?
What will restrain a corrupt official, who is neither accountable to the people and can not be removed from office by the people to stop his bad practices?
How does the system correct itself?

And if the system has some corrections capabilities , with which efficiency do they work?

If the emperor, in old china, or the party in modern china, put an official in power you can only count in his integrity to correctly use the power given to him in governing the people who depend on his decisions.
In the opposite case, which power have the people to take in out of power, or at least restrain is behavior?

“Of course, I think/hope/pray China should get the best of everything, if possible. ”

I think/hope/pray that too.

February 29, 2008 @ 4:28 am | Comment

@ferin

“Even now, democracy has shown to be a huge failure in the last decade for America, Taiwan and Japan. Same goes for Pakistan.”
Democracy is not as system that guarantees that the best will be elected to the government, it is a system to take the worst out of it. No matter how demoniac you think Mr Bush is, he is going out of power after a mere 8 years.

Compare that with Mao�s rule for 38 years.
Any elected president, after a disaster like the great jump forward, would not be elected for the next office.

“. i.e no retards like Bush or Chen would ever have a chance at leading a nation.”
Believe me, you may disagree with them but they are not retards at all.
Quite a bit of Americans would share your taste about Bush. Not sure that the same proportion of Taiwanese will share it about Chen.

February 29, 2008 @ 4:38 am | Comment

“I think those who put themselves in Beijing’s shoes”

Would not like to be in Beijing´s shoes. Their problems are several order of magnitude greater than those that we have in the west, to the point that sometimes our problems seem risible in comparison.

Putting aside all differences between the political conceptions and taking into account China´s recent history (+100 years) it is not a small feat what has been achieved.
But I still sleep uneasy, depending on the day I give China a 30% or a 60% probability of success

February 29, 2008 @ 4:48 am | Comment

@CCT

I think there are at least a few examples of successful development in democratic nations in the past 50 or 60 years. Israel, Taiwan, Singapore, South Korea, and Chile. None are perfect examples, but Israel and South Korea are probably the strongest. On the flip side how many dictatorships have achieved and maintained a first world standard of living? There are a few, I suppose. Hong Kong, the United Arab Emirates, Spain and Portugal (maybe), and Vatican City are the ones I can think of. Then there are those in-between, what I guess used to be called Second World, states with relatively low standards of living compared to the first world and relatively high stability and industrial capacity compared to the third world, made up of Russia and the old soviet bloc and now China. I don’t know where you’d put the ex-soviet bloc democracies that are now developed or close to developed, as they span both categories (as do Taiwan and Chile I guess).
Japan’s kind of an anomaly too as it has been steadily developing through alternating periods of democracy and dictatorship.

February 29, 2008 @ 5:07 am | Comment

@Lime,

I think there are at least a few examples of successful development in democratic nations in the past 50 or 60 years. Israel, Taiwan, Singapore, South Korea, and Chile. None are perfect examples, but Israel and South Korea are probably the strongest.

I think you’ve completely misread history. Singapore is still not a democracy according to some, and Taiwan/South Korea didn’t adopt democratic institutions until they were basically developed nations.

Taiwan adopted democracy ~1990, at which point their human development index was in the high 30s. Their economic growth has steadily declined since then, by the way. When South Korea held its first free election, its inflation-adjusted per capita GDP was still 3x China’s current level. At 8% growth rate, it will take China at least 15 more years to reach South Korea’s level.

Israel’s a bit of a unique situation, I think you’d agree. It was never a “developing” nation filled with impoverished, uneducated growing into wealth. It was filled with largely emigrants from developed nations.

You’ve proven my point with these examples. The only successful development stories are countries that were brutally authoritarian, until their GDP capita reached a certain level. At that point, based on the limited examples we’ve seen so far, these now successful countries tend to engage in political reform.

February 29, 2008 @ 5:55 am | Comment

> Mistakes are made of course, but almost never ones that will seriously damage the country in the long run.

Yes, and the above is just fine with a first world country which is just trying to “resolve the contradictions” that arise in society. (Using some Chinese lingo, there.)

But a third world country already sunk deep in poverty doesn’t need to “avoid mistakes”; mediocrity just leaves these countries (and their citizen) sunk in poverty. It needs a strong guiding hand with an emphasis on development and reform.

As I’ve said elsewhere, I think it’s a shame that Western activists (for example) blame China’s government for isolated human right violations, while not putting any political pressure on democratic government in countries like India and Haiti that leave children dying in the streets. (Child mortality in India is 76 per 1000; in China, 24 per 1000.)

February 29, 2008 @ 6:07 am | Comment

Not sure that the same proportion of Taiwanese will share it about Chen.

iirc their approval ratings are both around 30%.

The point of having a democracy is not to have a fast moving dynamic government with brilliant leaders.

This is why humanity is doomed to failure. I don’t think it’s too much to limit the influence of stupid people and public opinion. After all, in an election you’re just picking one out of two or three cherry-picked asshats in a country of 20-300 million. You have everything else in a democratic system, just no culture of stupidity and lies.

February 29, 2008 @ 6:09 am | Comment

@Lime

Spain did not start to achieve an acceptable good living standard until middle/late 60s. The authoritarian regime started in 1939 after 4 years civil war. Things started to improve only in the 60s when technocrats were allowed to reach power, at the same time the country started to liberalize (Organic Democracy…). By the way, the development levels of the republic before the civil war in the 30s were not achieved until the 60s.

During the 60s there was freedom to do what you wanted long as you did not criticized the regime.
Something similar to China today….

Accountability and rule of law was acceptable, outside political issues.
I’d rather say better than China now in general, but not sure by how much.

After the democratic transition, the country really took off, being able to join the EU in 1986, eight years after becoming a democracy with the approval of the constitution by popular referendum.
Now GDP per inhabitant is 105% above EU average. Starting from one of lowest positions in Europe.

Portugal is not doing so bad. After the Carnation Revolution which lead to democracy and some dubious economic starts, the country later on really took off. Quality of life now ahead of Germany, France , UK and S.Korea.

Similar east European countries. Slovenia, Czech Republic (velvet revolution), some if not all of the Baltic countries and Hungary , in that order I think.

Trailing behind at a not big distance Poland.

Last in the line Bulgaria and Romania in that order. (The EU has a bad time digesting the last one.)

German Democratic Republic is now part of Germany so it does not count….. 😉
(West Germany has still a bad time digesting the East side)

Of course, the start situation in all those countries can not be compared to China�s.
In “right” authoritarian countries like Spain and Portugal society+economy was not so mangled up, some basic government and political structures were maintained.
Worst situation in “left” authoritarian regimes. Economy+society really mangled up. Even in the GDR, most advanced east country, took and still takes time to solve them. (huge environmental problem by the way, still cleaning it…)

Still society+economy was not so degraded/dislodge like in China after Mao, and most of those countries had a historic past to rely upon to build up their recovery.

And a lost less people too…….

February 29, 2008 @ 6:23 am | Comment

“mediocrity just leaves these countries (and their citizen) sunk in poverty. It needs a strong guiding hand with an emphasis on development and reform.”
The opposite can be also disastrous. Better a mediocre good leader than a brilliant tyrant.
Specially if you can not put him out of office….

“while not putting any political pressure on democratic government in countries like India and Haiti ”
Quite a bit of pressure is been put also on them, not only on China. And by the way, is China about we are talking about. Would you prefer China to be at Haiti levels? 😉

“isolated human right violations,”
No isolated at all! Should I mention Aids+Hunan province for example or Tibet. To mention a few.

“irc their approval ratings are both around 30%.”
Not a bad acceptance rate in a democracy, you can almost be get elected with that if your opposition get less. If you get so much in China a propose you should run for some political position.

“This is why humanity is doomed to failure. ”
For the moment we are doing fine, thanks 😉
(sometimes you sound really like a depressive person)

“. I don’t think it’s too much to limit the influence of stupid people and public opinion”
The problem is… Who are the stupid people? Who defines it? According to which rules?

“After all, in an election you’re just picking one out of two or three cherry-picked asshats in a country of 20-300 million”
More than two or three to be precise, you are forgetting congress+senate+state level+municipal authorities.
Cherry-picked ass hats? Maybe. But Cherry-picked ass hats we can throw away if we think they did not serve the people well, and then make accountable for any crime they may commit, plus a deep scrutinity of free media so the have to word hard to hide them.
Maybe we do not choose the best, but we do not have to suffer the worsts… at least for long time.

The need for a “strong leader” reminds me of
Aesop fable “The Frogs Who Desired a King”
http://en.wikipedia.org/wiki/The_Frogs_Who_Desired_a_King

February 29, 2008 @ 6:51 am | Comment

@CCT
You’re absolutely right about South Korea. I was way off there. Singapore, I contend, is a democratic nation. Just because there is only one party that ever wins doesn’t mean the elections aren’t fair. But yeah, the government uses censorship and defamation law suits and all that, and it is a city state which makes a special case too.
Taiwan and Chile were not developed nations when their dictatorships ended, but you’re right in that they were a damn sight better off than when the dictatorships had started and better off than most of their contemporary neighbours. So they do fit your argument that in the post-WWII world, a dictatorship is needed to pull a society out of poverty, before the mediocre leadership of a democracy can be put into place. ecodelta’s figures on modern European dictatorships and post-dictatorships certainly support it too. You make a good argument, though I’m not quite ready to give up on democracy in the developing world. I’ll have to think on it.

@ferin
“You have everything else in a democratic system, just no culture of stupidity and lies.”
Not sure what you’re saying here, mate.

February 29, 2008 @ 7:01 am | Comment

@lime

Not quite right. I did not imply in may comment that a dictatorship was needed to pull the country up to a level where democracy can be implemented.

Actually in Spain+East Europe the situation was reversed. The authoritarian regimes sunk the living standards, real improvement came afterwards. Some authoritarian regimes liberates somewhat to improve living conditions as a way to reduce social pressure or/and perpetuate themselves, sometimes it ends changing the system of putting the basis for a change.

Anyway, authoritarian regime or not, some conditions must exist first to implement a democratic system.
Previous historical experience, external power (i.e Germany+Japan), wish to emulate other country, surrounded by other democratic countries (with greater standard of living), etc, etc, etc.

Not much luck for China in that respect. Rather the opposite.
Maybe that explains the different mindsets in the posts. Do we have a cultural shock here?

February 29, 2008 @ 7:22 am | Comment

The problem is… Who are the stupid people? Who defines it? According to which rules?

You know who they are. They’re the people who say China is larger than the U.S, etc.

Tests on the basics (who the candidates are, how the economy works, the governments of foreign countries) would quickly to show who all the morons are. You have the draw the line somewhere, if 12 yearolds and the mentally retarded can’t vote why can the stupidest 30% of the population? Why not illegal immigrants? Tests might not be perfect, but they’re better than popularity contests. That’s why schools, employers, militaries, etc grade you on performance and quality and not popularity.

And the extent to which Americans have “gotten rid of” Bush is questionable. He had a good 8 year run in the most powerful position in the world. He should never have been a candidate in the first place.

Bleh I don’t feel like getting into it. Just let China vote in Hitler, Mao 2, George Bush or Chen Shui-bian. All the fenqings and communists will then start having billions of babies to outvote everyone else.

February 29, 2008 @ 8:21 am | Comment

asdfds *who say China’s economy is larger than that of the U.S

February 29, 2008 @ 8:22 am | Comment

@ecodelta
What was the previous historical experience that Eastern Europe had that China didn’t? (Eastern European history is not one of my stronger areas, I’ll admit. Neither is Korean history, incidentally).
I guess I misunderstood. Didn’t you say the quality of life improved under Franco’s dictatorship in the 60s?

February 29, 2008 @ 9:39 am | Comment

cct is way off base on Taiwan.

By his logic, the shift to greater democracy caused slower growth.

One needs look no further than Japan to see the obvious flaw: Japan had much, much slower growth in the 1990s than in the 1980s, yet didn’t have the “causal” factor cct seems to require.

February 29, 2008 @ 9:43 am | Comment

DOR, how the heck has life been treating you in these years? Solid comment on the nominal GDP!

For those who are interested in the yen move against US dollar in the 70s and 80s:

http://fx.sauder.ubc.ca/etc/USDpages.pdf

February 29, 2008 @ 10:15 am | Comment

@DOR,

I’m “way off base” on Taiwan? I’ll be the first to admit I’ve only suggested correlation between the onset of democratization and Taiwan’s slow-down in GDP growth.

So? Have you some how been able to conclusively “prove” that Taiwan’s slow-down in GDP growth in the ’90s is directly due to Japan’s slow growth?

On the democracy issue, I’m making a circumstantial case here. There are no (or at least precious few) examples of successful developing nations that adopted democracy early on, but numerous examples of successful developing nations that began with an authoritarian focus on economic reform, and only addressed political reform later.

February 29, 2008 @ 2:26 pm | Comment

“. There are no (or at least precious few) examples of successful developing nations that adopted democracy early on, but numerous examples of successful developing nations that began with an authoritarian focus on economic reform, and only addressed political reform later.”

Except that China’s leaders don’t want political reform because it would diminish their power and make them actually accountable. They want to work “economic reform” for personal wealth until they die.

And the US had political reform long before it had economic reform, as well as England. That is what allowed them to weather significant economic downturns that are inevitable and that is why the US and UK are where they are today.

And all of the pro-China posters here forget that Taiwan and SK did not use authoritarianism to promote rapid economic growth, they needed it because they were (and still are) under threat of destruction from certain neighbors.

I would say Taiwan’s growth slowed after democratization but became more balanced. China’s growth has pretty much destroyed its environment and corrupted all sense of morals in the country.

February 29, 2008 @ 3:33 pm | Comment

A voice of reason.

February 29, 2008 @ 4:38 pm | Comment

i think that all of these posts miss the point to a degree which is the common belief that the style of govt and economic growth are intertwined. i would agree that democracy and economic growth are not necessarily intertwinned. democracy isn’t about economic growth – it is about the basic human diginity of having the right to have a say in the running of the country you live in without having to sign up to a certain ideology. the us currently may have little between the two parties, but this is not necessarily always the case. historically in europe and japan there have been major parties whose ideologies have been very far apart.

all this picking of peanuts out of pooh in examining different states in different moments of development miss this.

February 29, 2008 @ 8:48 pm | Comment

Kevin: Amen. At times, kebab boy may be crazy, but he is no fool.
Si: Seconded. But what did you expect of CCP apologists?

February 29, 2008 @ 10:04 pm | Comment

democracy and economic growth are not necessarily intertwinned.

Recently the Japanese government bungled some construction bill that did slow growth by quite a lot. I guess it could be worse and they could have someone like Mao Zedong, but the system isn’t even close to perfect. I’m not suggesting China should embrace any system in which a psychopath could take power either.

Anyway, “having some say” doesn’t matter so much if you get outvoted by an opposition that is essentially an incompetent propaganda vote. Regardless, it seems to me the CCP has less to do with China’s economic growth than they say. They just use SK, Taiwan etc and compare rates to justify their sluggishness when it comes to implementing even minor political reforms.

they needed it because they were (and still are) under threat of destruction from certain neighbors.

You could say the same about China from the 1800s until now. Russia and Japan (as well as other members of the notorious eight nations) pretty much did destroy China, and the Mao era was more or less a manifestation of that.

March 1, 2008 @ 12:26 am | Comment

@nanheyangrouchuan,

Except that China’s leaders don’t want political reform because it would diminish their power and make them actually accountable. They want to work “economic reform” for personal wealth until they die.

I see I’ve obviously failed in my attempt to convert you with my fancy numbers and false propaganda. You already know the truth nature of the Communist Party… and who am I to debate the Truth.

And the US had political reform long before it had economic reform, as well as England. That is what allowed them to weather significant economic downturns that are inevitable and that is why the US and UK are where they are today.

The US and England, in case you hadn’t noticed, started their climb up the economic ladder in the 18th/19th/early 20th centuries. The economic challenges faced by today’s modern nations are completely different. (I could also mention the slave trade, the opium trade, colonialism, and genocide of the native population is no longer acceptable behavior in the 21st century… but that’s a different topic.)

I think there are two major differences between the 19th and 21st centuries:

– first, the United States / UK were on the cutting-edge of technology. Even though they had “poor” living standards by modern world standards, they were by far the most efficient and productive economies on this planet in the 19th century. They had first-mover advantage, you could say.

And what about today? What can Bangladesh possibly do to overwhelm the rest of the world in terms of economic efficiency?

– second, globalization is another huge change between today and yesteryear. An isolated China which didn’t trade with, and had no knowledge of, the rest of the world could probably manage a happy democracy without much concern.

But in an open economy… there are natural tensions in a developing nation between the urban, educated elite who see opportunities to prosper by interacting with the rest of the world, and the (usually rural) poor who see the elite as being exploiters. I’m not speaking of just China here; I’m speaking of Mexico, Brazil, Indonesia, India, Venezuela, Bolivia… any open, developing country.

Just riddle me this: if political reforms that helped countries “weather economic downturns” eventually leads to economic strength… then what in your opinion has gone wrong in the 3rd world over the past 50 years? What’s wrong with Brazil, Mexico, and India?

China’s growth has pretty much destroyed its environment and corrupted all sense of morals in the country.

Ever read Upton Sinclair’s “The Jungle”? Ever look into the British Industrial Revolution?

March 1, 2008 @ 1:16 am | Comment

@Si,

democracy isn’t about economic growth – it is about the basic human diginity of having the right to have a say in the running of the country you live in without having to sign up to a certain ideology

You’re absolutely right about that. That’s exactly what democracy is, and that’s exactly why there is such a disconnect between the developed and developing world.

What’s dignified about growing up in an Indian slum, even if you “have a say in the running of the country”? What’s dignified about growing up homeless in a Rio slum gang, just because you are “free” from government oppression?

Here’s a Chinese saying for you: ±¥ºº²»Öª¶öºº¼¢¡£”A full man can’t know the desperation of the hungry man.”

Are you American, Si? I don’t get the impression that you are. But let me bring up a facet of American society that I’d like you to explain.

Mexican migrants, in the millions, have crossed the border illegally into the United States. There, they will live away from their families for years at a time. They will toil in back-breaking menial labor that Americans won’t do, at comparable wages. They will have zero access to medical insurance or health care. They will have no legal protection from an abusive employer. They can be deported at any instant; their property/job/friends lost. And obviously, they don’t have any political rights.

What do you think motivates them? They have the dignity of a democracy government that they can participate in at home, in Mexico. Why do you think they leave that “dignity” behind, and instead choose to live and work like animals in a distant land where they have no dignity, political or otherwise, at all?

March 1, 2008 @ 1:30 am | Comment

@CCT

“(I could also mention the slave trade, the opium trade, colonialism, and genocide of the native population is no longer acceptable behavior in the 21st century… but that’s a different topic.)”

You could, but those activities have been going on in the human race before anyone had a writing system. The US and UK actually started shedding that behavior in the 1850s.

“And what about today? What can Bangladesh possibly do to overwhelm the rest of the world in terms of economic efficiency?”

Bangladesh is hopeless, if for no other reason than getting smashed by numerous typhoons every year. Its like living in New Orleans and getting one Katrina plus a few smaller ones on a regular basis.

“if political reforms that helped countries “weather economic downturns” eventually leads to economic strength… then what in your opinion has gone wrong in the 3rd world over the past 50 years? What’s wrong with Brazil, Mexico, and India?”

They have only begun to make real political reforms, plus they were caught up in the US/USSR struggle. Brazil has world leading technologies in biofuel technologies that not even the US or EU have, China has nothing at that level. Another problem with both Brazil and Mexico is that their poor barely even count as people, in Mexico local censuses often do not count the poor, mostly indigenous people.

“China’s growth has pretty much destroyed its environment and corrupted all sense of morals in the country.

Ever read Upton Sinclair’s “The Jungle”? Ever look into the British Industrial Revolution? ”

And we fixed our own problems, what’s China’s excuse? Especially since China and others have ready access to the West’s experiences in reform.

March 1, 2008 @ 3:16 am | Comment

@nanheyangrouchuan,

I don’t even know what to say in response to you, because you aren’t engaging me on the substance of what I said.

I’m not looking to give the United States and the UK a black-eye for colonialism and slavery; I’m just reiterating that the economic path these countries took to “developed” status isn’t available to developing countries in modern developing countries. Is that clear?

I’m also not ready to dismiss Bangladesh entirely. If the Netherlands can become wealthy while existing below sea level; if Israel can flourish on the edge of a salty desert… Bangladesh isn’t “hopeless”. It needs wealth. Is that clear?

As far as Brazil/Mexico/India… you say they have “only begun” to make “real” political reforms. What real political reforms are you referring to? What are the new political solutions that these countries are trying now that have not been tried before?

And if democratic Brazil and Mexico doesn’t count the poor as people… will a democratic China be any different? Do you believe a democratic China would be better than a democratic Brazil or Mexico? And why?

And we fixed our own problems, what’s China’s excuse? Especially since China and others have ready access to the West’s experiences in reform.
Time. China’s excuse is that it hasn’t had enough time, and that it needs time. China’s excuse is that when China is finally as rich on a per capita basis as the United States was in the 1930s or 1940s (and it’s not there yet), we can finally address some of these problems. China’s excuse is that no one else on this planet has been able to follow the West’s rise to success, if they engage in political reforms too early.

March 1, 2008 @ 3:39 am | Comment

One thing that I think we got to consider here is that life almost everywhere, for the last fifty years has been getting steadily better for almost everyone, under both dictatorships and democracies. A lot of this is attributable directly to technology (the green revolution in India and elsewhere), but its also partly because we?ve stopped killing each other at such an amazing rate and settled down enough to concentrate more on producing things for each other (in other words let our economies grow). The exceptions are all democracies where an election derailed a government and civil war ensued (Kenya at the moment), dictatorships where you have a Pol Pot Caligula type in, like I?ve argued before (Zimbabwe and North Korea are the best examples right now), or are communist and post communist states that were so badly managed they?re still in a state of collapse (Russia). It?s relative of course; in India you still might be living a danger ridden existence with no modern amenities but you?re not in immediate danger of starving to death, in China you?re working ridiculous hours in a sweatshop but now you?re whole family doesn?t have to work to scratch out an existence from tiny plot of land with no electricity or running water.
Some of our disagreements here come from the ambiguity of developed vs developing. When exactly did Taiwan become a ?developed? nation? Life has been steadily improving at least since Chiang Kai Shek bit the bullet, and continues to do so, albeit at a decelerated pace in the past few years (which I believe has a lot more to do with A-bian?s protectionist policies than anything else). Human ingenuity is quite incredible really. I think that as long as we?re not killing or terrorising each other, we will find ways to make our lives better.
And to give the devil his due here, the post-Mao CCP has done nothing more laudable than to seriously restrict their killing and terrorising.

March 1, 2008 @ 3:42 am | Comment

@Lime,

“One thing that I think we got to consider here is that life almost everywhere, for the last fifty years has been getting steadily better for almost everyone, under both dictatorships and democracies.”

Sorry Lime, I can’t agree.

http://hdr.undp.org/en/media/hdr03-summary.pdf

More than 1.2 billion people¡ªone in every five
on Earth¡ªsurvive on less than $1 a day. During
the 1990s the share of people suffering from
extreme income poverty fell from 30% to 23%.
But with a growing world population, the number
fell by just 123 million¡ªa small fraction of
the progress needed to eliminate poverty. And excluding China, the number of extremely poor people actually increased by 28 million.

South and East Asia contain the largest numbers
of people in income poverty, though both regions
have recently made impressive gains. As
noted, in the 1990s China lifted 150 million people¡ª12% of the population¡ªout of poverty,
halving its incidence. But in Latin America and the Caribbean, the Arab States, Central and Eastern Europe and Sub-Saharan Africa the number of people surviving on less than $1 a day increased.

If you take a big picture view, things have improved on average over the past 50 years. We’re human beings; history is going forward, and we’re supposed to be making things better.

But suffice it to say that this progress is intolerably slow, and often negative, for much of the world.

March 1, 2008 @ 4:57 am | Comment

Crap. That last post is horribly formatted. I hope one of the moderators will be kind enough to fix it for me.

When exactly did Taiwan become a ?developed? nation? Life has been steadily improving at least since Chiang Kai Shek bit the bullet,
Depends on how you define “life improving”, but from an economic growth point of view, the fastest GDP growth by far for Taiwan came during the CKS era.

I didn’t correct you when you made an allusion to this yesterday… but actually, Taiwan had a GDP per capita that was about 20% greater than South Korea when it finally adopted democratic reforms in the early ’90s. In other words, Taiwan was even more developed than South Korea.

March 1, 2008 @ 5:02 am | Comment

@CCT:

We play on my field, not yours.

“I’m just reiterating that the economic path these countries took to “developed” status isn’t available to developing countries in modern developing countries. Is that clear?”

These “developing” countries have been around for a long time and still can’t get it right.

“Bangladesh isn’t “hopeless”. It needs wealth. Is that clear?”

Apparently you can’t grasp the effect of one small country at sea level being repeatedly hit directly by typhoons. The Netherlands had the luxury of being nestled in Europe and had access to capital and technology to build its barriers and flood control systems.

“As far as Brazil/Mexico/India… you say they have “only begun” to make “real” political reforms. What real political reforms are you referring to?”

Putting power behind the courts, standing up to crime lords, making the military obey the civilian leadership. How about those reforms, reforms China has yet to undertake.

“Time. China’s excuse is that it hasn’t had enough time, and that it needs time. China’s excuse is that when China is finally as rich on a per capita basis as the United States was in the 1930s or 1940s”

Time is just a weak excuse, especially from a country that claims to have invented the sun, moon and stars and sliced bread.

“China’s excuse is that no one else on this planet has been able to follow the West’s rise to success, if they engage in political reforms too early.”

China’s excuse is its defense for its own lack of true progress and its own apparent failings. To say that everyone must endure unending authoritarianism, social chaos, abuse and neglect. How do you explain African nations like Kenya, whose GDP is far below China’s, but are experiencing a domestic renaissance through democracy, good governance and even handed rule of law. They are far from perfect but they are improving their lives in a more organic and sustainable fashion without big shopping malls, shoddy local products and car choked streets.

March 1, 2008 @ 2:55 pm | Comment

I don’t disagree completely with your assessment but..

“They are far from perfect” is not very specific. Kenya’s crime, poverty, AIDS rate, income inequality, corruption, are all ridiculous and far surpass that of China’s even at a similar time. Every advantage they have is thanks to a large amount of natural resources, a smaller population and the huge amount of aid given to them in the past.

March 2, 2008 @ 12:24 am | Comment

“It depends on what you mean by democracy. However the notion that every person over a certain age has equally valid opinions, and should thus be entitled to an equal vote, is fundamentally idiotic imo. The poll in the original post shows this well; at least 40% of Americans and people in general are dumb.”

Do you belong to those 40 %? And if the USA are so bad, why don’t you just go back to your great motherland? Maybe those foreign teachers you detest so much have more guts than you have?
And by the way,

“Not only are you a dumbass, but a filthy lying whore subhuman. Get cancer and die.

Posted by: ferins at December 23, 2007 03:54 AM”

Two simple questions:

1. Why hasn’t Ferin been banned yet, while so many other people have?

2. Why hasn’t the comment above been deleted yet? Not vile enough?

March 2, 2008 @ 10:13 am | Comment

If China is so bad why don’t you go back to your country? 🙂

March 3, 2008 @ 12:06 am | Comment

You really belong to those 40% of people who “in general are dumb.” You pathetic little troll just make assumptions without knowing anything. I’ve left China before I even started talking to you. Still, I would like to point out that I’ve never talked about China the way you keep talking about the USA.

March 3, 2008 @ 5:16 am | Comment

Are we all lost in “translation” now? I cannot believe that almost all the comments assume China will continue with at least 8% growth for the next 50 years. That is absurd!

First, the country doesn’t have any more resources to support the growth. Water, which is extremely critical in a country’s development, is a scarce resource in China, almost to the extent of “extinction.” If you had the chance to travel close above the ground throughout differenct provinces and cities in China, you would easily observe that the rivers are completely dry, and water reservoirs are so depleted that make one wonder if this country is actually in crisis stage. But because the government controls the medias, as well as China hype, people don’t seem to observe anything anymore.

Second, the banking systems are bankrupt. Yet, the Chinese government has successfully arranged to buy the problem loans prior going public, then has them listed in overseas (perhaps Hong Kong is no longer considered overseas anymore). As long as the managements of those banks are appointed by the government, or controlled by them, then the problem will be “repurchased” again. In essence, what I am saying is that the financial books are “cooked.” I actually think those US investment banks should be brought to accountable to US investors should one day these bankrupt banks face problems again.

There are many crisis that this country are seriously facing. I think if this country does not become chaotic within the next 15 years, the Chinese should feel lucky and we should feel the same way too, as the repercussion will be so immense because of the interconnectivity.

We are dealing with a different kind of “animal” in China. Our perception as we are used to in the west is not applicable in China. In China, an animal that waddles like a duck and looks like a duck, is definitely not a duck; otherwise, it will not look and waddle like a duck.

The country and the people (not all the Chinese people, of course) have brought the arts of mimicry to the highest level.

I hope people in the west are more cautious in their investment. It is after all not easy to understand this country.

Please don’t see this writting in the context that I don’t like China, or anything like that. I just want the truth to be known, as I deplore the propaganda that the country is specializing, to cheat its citizen and us who are living in open society.

March 3, 2008 @ 11:26 am | Comment

@JXie,
I wondered if that was you! How’s life?

I dropped out of CDF a while back when work got more intense, and frankly there was too much posting as a matter of record rather than actual discussion going on.

Other than that, not much has changed.

.

@CCT,

I didn’t mean to imply that BECAUSE Japan ran into a wall in the 190s, therefore so did Taiwan. No need for any link between the two at all, aside from the usual trade and investment flows.

On the democracy issue, you are making a circumstantial case, and presenting it as if there were facts to back it up. They’re aren’t, and that’s why I called you on it.

On the topic of successful nations that adopted democracy early on, my first thought was “what defines early” ? Japan is a very old nation, but might be considered to have adopted democracy “early” (if we can agree what that means), and certainly has to be said to be successful. All of Eastern Europe, however, was under authoritarian leadership and not a single one would be considered to be even close to an East Asian standard of “success.”

.

@Si,

You make a good point about government and growth. In my view (and, there is plenty of evidence to back it up), policy choices favoring greater freedom of trade and investment are the main reason why some nations succeed, and choices against globalization are why some nations fail.

Pick a hundred nations. Put them on a line as to more or less economic freedom. Match the ranking with standards of living (caloric intake, GDP at PPP, whatever). Find any examples of countries more successful with less freedom to trade and invest.

Globalization leads to prosperity.
Winners all around.
Test it yourself.

(CCT: that’s an answer to your question: “what in your opinion has gone wrong in the 3rd world over the past 50 years?” — not enough globalization.)

.

@Lime,
“One thing that I think we got to consider here is that life almost everywhere, for the last fifty years has been getting steadily better for almost everyone, under both dictatorships and democracies.”

Amen.
When 3 billion people in poverty become 2 billion, over just 10 years, man that’s amazing.
When someone has to exclude the most successful poverty fighting nation (China) in order to “prove” that Things Are Getting Worse, that’s just propaganda. (Hey there, CCT !)

.

@mor

Let’s all remember than 40% of the people are below average . . .

March 3, 2008 @ 11:39 am | Comment

@cct

you are saying that given the choice between two democracies a mexican will choose the richer of the two? what a surprise. what you also fail to mention is that mexicans born in the us are americans, and that mexicans have been agitating (successfully) for greater rights in the us. in the long term, there is a pay off in both economic, political and social freedoms.

as you say, i am not an american, i am english, so i have little knowledge of mexico.

@dor

those figures pointing to open economies being successful are a bit of a misnomer, as economies become open after they become successful. the us and the uk protected their economies to a large degree until they were in a position of absolute dominance.

@everyone

the reason these countries are still poor are multiple and complex but include geographic location, lack of intellectual and material resources, lack of investment, chronic corruption and debt (africa is an annual net exporter of currency, the amount of aid going to the continent does not even cover the interest of the money owed)

to reduce such complexities to a simplistic explanation of govt/economy is ridiculous.

March 3, 2008 @ 4:37 pm | Comment

I agree with Mor’s comment about Ferin. Ferin, you need to understand that this blog is significantly more intellectual than you are probably familiar with. You cannot resolve any issue or engage in any discussion by using blatant abusive words and asking Mor to leave China. What the heck do you think you are? You should stay with the average Chinese blogs that have prevalent use of “four-letter” words and unrestraint nationalistic ferver, to the extent of a “frog in the well” syndrome.

But people like Ferin are common and abundant in China, as well as the Chinese from China who are now residing in Singapore, US, Canada, Australia, Japan, and other western countries. They are extremely nationalistic; yet for economic reasons, they live overseas and desperately continue to apply their relatives to migrate to overseas. I deplore them. I think they are cowards. But on the bigger issue, these nationalistic Chinese will eventually create problems to the structure of world order as we know it now.
We should devote more discussions on the implication of this nationalistic Chinese and its impact to the world, because we might need to detect early to avoid any potential or even looming “dark cloud” that happened in early 20th century. Everything starts from attitude and perception, and the symtoms are abundantly clear. My question is simply: This dogmatic driven nationalistic ferver of the Chinese in China or the Chinese who currently live overseas but born in China will it result to sufferings and pains to others in the future?

March 3, 2008 @ 9:47 pm | Comment

@Si,

Which came first, the dramatic increase in standards of living such as the world has never seen in all of human history, or trade and investment liberalization policies?

My history and economic textbooks say it was policy that drove development, not the other way around.

And, if the reasons countries are poor are (in your order) geographic location, lace of intellectual and material resources, lack of investment, etc, etc, then we certainly wouldn’t have expected Hong Kong or Singapore to have made it, would we?

The corruption angle is a direct hit: no highly successful economies are among the more corrupt, and all very unsuccessful ones are.

Compare South Korea and Pakistan.

= = = = = = = = = =

@Arbutus,

Your bigotry is showing.

March 4, 2008 @ 10:25 am | Comment

DOR, life is good… Have done a lot of traveling in the past few years. Currently in the process of moving my base to China. This is it! I’ve seen the light. Every time I go to China, the optimism and naked energy remind me of the 90s bull market is the US, but ironically can’t be found in the US any more. Of course, the successes of some of my friends certainly make that decision much easier.

From my vintage point, the currency, the business environment, the labor force, the infrastructure, etc. in China today all scream the likelihood of the greatest bull run we’ll ever see. I will be damned if I am not a part of it.

To supplement your point, I think engaging in trading, entrepreneurial culture, saving/investment, and emphasis on education are what advance a nation’s living standard.

March 4, 2008 @ 11:52 am | Comment

@dor

which countries are you referring to when you talk of a dramatic increase in living standards?

presumably you don’t mean africa, the asian countries’ main economic boom came when their economies were protected (the chinese economy still is very protected and the govt is dragging their heels over the implementation of certain wto rules) and obviously the west benefitted from being able move money in quickly producing a short lived boom and then pulling it out, causing a major problem. the poor suffer, the west gets the profits.

hong kong and singapore are both reasonably well located – they are ports near the pacific ocean meaning any goods produced can be moved cheaply. they had significant foreign investment, a well educated workforce and benefitted from the largesse of western countries during the cold war as they were seen as bastions against the red menace. the order i gave was not in order of importance, but the order in which they occurred to me.

regrading arbutus, (s)he is clearly not a bigot as (s)he does refer to the nationalist chinese which are a concern, rather than the chinese overall. i think we can debate how common people like that are in china, but arbutus does not say all chinese are like that. we should assume good faith.

March 4, 2008 @ 5:10 pm | Comment

@Si,

> you are saying that given the choice between two democracies a mexican will choose the richer of the two?

No, not at all. I’m saying a Mexican will choose a life in purgatory, where they’re denied all political and civil rights, just to work and live in a richer country. I think that’s significant.. don’t you?

(A majority of Mexican migrant workers don’t settle in the United States and acquire citizenship.)

March 5, 2008 @ 1:51 am | Comment

To Jxie: You are evidently excited about China. Everyone (yes, almost all) is excited when one travels, either for business or visit, to China, because the contrast and the attitude that everything is doable. Labour is cheap.

But wait until you pass the first stage of setting your business. The first stage is exciting because you only spend money, on investment, on hiring, on getting the licenses etc. The local people are good in making people to be “convinced” and “excited” about the future prospect. Once you are in, the ballgame changes dramatically. There is no rule, and the Chinese government doesn’t follow rules or regulations – It simply CREATES them to protect the locals to squeeze you. Watch out! I am speaking from experiences but I was in Beijing, where the business bureaucracies are notoriously more complicated and infamous for the “attitudes.” Don’t even think that because you are a Chinese decent, you are EXEMPTED. Stay in Shanghai or the south.

To Dor: Bigotry! Anybody who criticizes China is a bigot. What an attitude!

Let’s have the facts straight. Almost all the Chinese from China (different than the diaspora Chinese from Singapore, Taiwan, or HongKong) only had the opportunities to study in the US because of the full scholarships from the US higher learning institutions, followed with the jobs offered and subsequent sponsorships to get green cards, and finally to be the citizens. These generosities of the US institutions and citizens led many of these Chinese to the dramatic life changes to the better – I might say that it is a turning point. However, what puzzles me is the attitude that being a Chinese decent, one should be a nationalist, by showing his/her negativities toward western culture, western countries, especially the US, when he/she speaks among the Chinese officials, and the local Chinese people, stirring further resentment and another full cycle of antiwest feeling. In my opinion that is bigotry and sychophant (I hope the spelling is correct).
As clashes of ideas and perceptions are inevitable in this era, and might be positive if openly discussed, but being nationalistic, especially a narrow-minded nationalistic attitude or pervertly so, only increases the potential conflict. If you believe in free choice and free will, you might want to consider my points, not directly jump to the conclusion that I am a bigot. Just to let you know that I had sponsored two Chinese to study overseas, so I have no grudges on the Chinese people, but I certainly resent the stupidity and the lack of sense of right and wrong of this nationalistic attitude that seems so prevalent , and growing exponentially in China.

To Others: Learn Chinese and try to reach a higher understanding of China. It is a very complicated country, plenty of industrious Chinese, plenty of Chinese who want to progress, plenty of unscrupulous business people, 99.999% of government officials are corrupt and rotten; many Chinese have suppressed nationalistic feeling toward foreigners disguised under smile and politeness, but will talk openly about it after a few drinks among the same kind; many feel China will bypass the west soon and be the real power — I think the government propaganda and education system produce this attitude. Check their mandatory political and history subjects in their high schools and universities to believe me. It is scary that the education concept brainwashes the students to feel that China is the best and other countries are imitating China. Simply put, China is extremely complex; go beyond the smile and the enterpreneur spirit that are commonly encountered in major Chinese cities. Afterall, if one is not careful, our children might have to face the consequences, whatever it is.

As I said before, I want people to be aware the real China, the good as well as the bad part, because it is a big country with a huge population that can destabilize others when it goes against the norm, or benefit the world if it pursues a positive change that increases its citizen’s ability to think right and wrong, fair play, and treat equally other citizens and their businesses.

To the overseas Chinese holding the passports of US or other western countries: you are also being discriminated by the Chinese government and the people in China in general. You know it because you understand their mentality, so don’t be ignorant and blindly stick with this nationalist attitude that might endanger your and your decendants’ future. Your best bet, I think, is still to be wisely loyal to your adopted countries where you can exerecise your judgement of right and wrong, and freely express your opinions, which you can not do in China for a very very long time to come.

March 5, 2008 @ 2:07 am | Comment

@Si,

If you saw a country that looked like this over a 10-15 year period . . .

31.3% increase in per capita protein supply;
9.3% rise in caloric intake;
10.0% rise in rural access to safe water;
39.5% drop in infant mortality;
44.9% drop in under-5 mortality;
41.1% drop in maternal mortality;
69.8% drop in the number of people living below the poverty line;
An increase from 75% to 100% in the ratio of girls-to-boys in secondary school and from 52% to 95% at the tertiary level.

. . . would you call that a successful increase in standards of living?

See http://www.adb.org for the raw data on which to do your own calculations.

– – – – –

— China’s economy opened far faster than any other emerging economy in the post-WWII era.
— Hong Kong was the famous “barren rock” before free trade and investment were introduced.
—Singapore was a malarial jungle.

Add open markets and stand back . . .

– – – – –

@Arbutus

I didn’t call you a bigot because you criticized China; in fact, you didn’t.

Rather, it was the sweeping generalizations about people that led me to that conclusion.

If you make, broad statements about “people like XXXXX are common and abundant in China;” “the Chinese from China who are now residing in Singapore, US, Canada, Australia, Japan, and other western countries;” and then conclude with “I deplore them. I think they are cowards,” well, in my book that’s what I call a BIGOT.

More?

“Almost all the Chinese from China . . . ”
“99.999% of government officials are corrupt and rotten”
“many Chinese have suppressed nationalistic feeling toward foreigners disguised under smile and politeness,”

What next? Shuffle their feet when they walk? Lazy? Shifty?

– – – – – – – – – –

“Learn Chinese and try to reach a higher understanding of China.”
Been there, done that since 1979.
Still there, still doing that in 2008.

= = = = = = = = = =

JXie,

Best of luck in China! But, remember the outcome of that 1990s bubble . . . China has not yet had its own financial crisis, but it will.

March 5, 2008 @ 11:55 am | Comment

@JXie,

Great stuff! Best of luck to you. I’ve seen your writings online for years, and I’m sure you’ll do well.

Just keep in mind that China is 1.3 billion people, and you’re only one. Based on sheer mass alone, China will change you more than you can change it.

Just focus on taking care of business and succeeding at your personal ventures and tasks… and be confident that in some small way, your presence will certainly change China for the better.

March 5, 2008 @ 2:03 pm | Comment

@dor

i am unconvinced that you are interested in debating with me as you are simply bringing out statistics (though of which country you don’t say) that you feel support your argument without engaging with any of my points.

you have no comments on africa, none on my contention that the asian economies main boom occurred when closed, no source for the assertion that “China’s economy opened far faster than any other emerging economy in the post-WWII era.” and no comments on my comments regarding the asian financial crisis.

i believe your contention is deeply simplistic and there is nothing you have written that is convincing me otherwise.

@cct

“No, not at all. I’m saying a Mexican will choose a life in purgatory, where they’re denied all political and civil rights, just to work and live in a richer country. I think that’s significant.. don’t you?

(A majority of Mexican migrant workers don’t settle in the United States and acquire citizenship.)”

so you are arguing that mexicans will suck it up for a few years before returning to mexico, where they enjoy rights again. don’t you think this defeats your initial argument? if money is all they want and are not concerned about their rights why don’t they stay in the us where they are richer but have no rights?
all you are really arguing is that mexicans are willing to suffer for a few years to save a bit of money. sure. this is hardly justifying people living continually under an oppressive system, is it?

March 5, 2008 @ 10:23 pm | Comment

@Si,

> all you are really arguing is that mexicans are willing to suffer for a few years to save a bit of money. sure. this is hardly justifying people living continually under an oppressive system, is it?

What’s the distinction? If a man will “suffer” say, 5, 10, 20 years in order to save “a bit of money”… where’s the cut off?

Are you familiar with the Chinese Exclusion Act of 1882? Over 100,000 Chinese came to the United States in the late 19th century. The Chinese Exclusion Act expressly denied them citizenship for the next 60 years, finally repealed in 1943. The Chinese continued to emigrate to the United States whenever possible for the economic opportunities alone.

March 6, 2008 @ 1:47 am | Comment

@Si,

That bit about the stats, well, I should apologize for that.
It wasn’t fair.
See, in the area of comparative economic development, the experts who pay attention to this stuff for a living would have instantly said, “Oh, you mean China, right?”

And, the bit about corruption had Africa written all over it.
As for the “Asia only boomed when it was closed,” that was dealt with in the three lines on China, Hong Kong and Singapore.

The bit about China’s economy opening faster (and further) than any other is simply historical fact. Get an advanced degree in East Asia’s development since WWII and you won’t have to ask.

Sorry, I sometimes forget to be more specific with laymen.

March 6, 2008 @ 9:29 am | Comment

@cct

the distinction is between a temporary and a permanent situation. i think we are arguing each other to a stand still and losing the main initial point. my initial point was that economic development and democracy are not interlinked – human rights are a stand alone issue. your contention remains that some people will put up with a lack of human rights in order to profit – fair enough, but it does not deal with my central point. i think you have to show that a lack of human rights and economic development must go hand in hand to prove your point.

@dor

that was probably one of the most patronising comments i have ever read on this blog (which is saying something), so unless you can deliver on your arguments rather than talking to me like i am a dim witted primary school student, i don’t see how i can respond to you again. spare me the shit about the advanced degree, everyone has a phd on the internet. (you also assume i don’t have an advanced degree, how amusing!)

much of china’s boom is of course to do with coming more open. but it also has to do with the very low level of welfare after the cultural revolution, so achievements look that much more impressive. also china’s poverty line is $1 a day, rather than the usual $2 a day, which helps the figures. you didn’t date the statistics, are they before or after the recent announcement that china’s economy is 40% smaller than previously thought? perhaps a link to your killer statistics might help in the future. i was interested in your statistics – why is a 31.3% rise in protein supply particularly good? it could just mean people are eating more and getting fat. furthermore, supply does not mean consumption and it could also simply mean that it grew from a very low base. if the base was low enough, a 31.3% rise might not be especially great. also an average doesn’t deal with the enormous differences between urban and rural development.

anyway, the real issue is that the chinese economy remains closed to a large degree, which you should know, given your “advanced degree”. if the ccp was really committed to open markets they would let the rmb float and open their companies to all competition. they don’t do this – not really the stuff of libertarian economic wet dreams, is it?

you also ignore the fact that taiwan, japan and korea all remain closed for a long time, and it was after economies opened in asia that there was the asian financial crisis. china’s avoidance of this crisis was due to the govt control and lack of openness. ha joon chang, amongst others, has written compellingly about this. given you have an advanced degree, i was surprised you didn’t spot this (i take it you have read his stuff, given he is one of the leading development economists in the world) and have a better counter argument.

i am glad that you feel that you can deal with the entireity of the far east (in three lines no less – how brilliant you are) by pointing to china, singapore and hong kong. apart from the fact you are wrong about china being open, you have left out the three countries previously mentioned and most of se asia. i accept that hong kong and singapore boomed when open but they are exceptions to the rule. they also comprise of 20 million people total, which is hardly demonstrative of the entirety of the far east, let alone of developing countries. you also need to acknowledge how far china has opened.

you also neglect the role of the us in development in the far east – they extended a largesse to the area that wasn’t forthcoming for south america or africa. us aid to korea from the 50s to the 80s exceeded their total aid to the entire african continent. again you presumably know this, with your advanced degree. a pity you didn’t explain why you feel this is an amazing example of non govt interference. perhaps this is because it isn’t.

i think that it might a good time to put down your copy of Thomas Friedman and engage with the complex issues and alternative viewpoints rather than patronisingly dismiss them without considering them. personally, i find it hard to believe you have an advanced degree in the subject area, as you appeared to be ignorant of my viewpoint, which is by no means a rare argument within the development field. your inability to deal with my responses says more about your ignorance of the field than it does mine. i hope you can be a little less arrogant, rude and dismissive in the future, as this is not a sign of knowledge but of ignorance. if you really knew your stuff you’d be able to answer me in greater depth rather than give shallow three line dismissal. if i am wrong i am perhaps more likely to accept your arguments if they are delivered in a well mannered and persuasive manner, rather than in your off hand and dismissive style.

apologies for the long post

March 6, 2008 @ 5:08 pm | Comment

@cct

the distinction is between a temporary and a permanent situation. i think we are arguing each other to a stand still and losing the main initial point. my initial point was that economic development and democracy are not interlinked – human rights are a stand alone issue. your contention remains that some people will put up with a lack of human rights in order to profit – fair enough, but it does not deal with my central point. i think you have to show that a lack of human rights and economic development must go hand in hand to prove your point.

@dor

that was probably one of the most patronising comments i have ever read on this blog (which is saying something), so unless you can deliver on your arguments rather than talking to me like i am a dim witted primary school student, i don’t see how i can respond to you again. spare me the shit about the advanced degree, everyone has a phd on the internet. (you also assume i don’t have an advanced degree, how amusing!)

much of china’s boom is of course to do with coming more open. but it also has to do with the very low level of welfare after the cultural revolution, so achievements look that much more impressive. also china’s poverty line is $1 a day, rather than the usual $2 a day, which helps the figures. you didn’t date the statistics, are they before or after the recent announcement that china’s economy is 40% smaller than previously thought? perhaps a link to your killer statistics might help in the future, so i can all of them and not just the ones you choose to highlight. i was interested in your statistics – why is a 31.3% rise in protein supply particularly good? it could just mean people are eating more and getting fat. furthermore, supply does not mean consumption and it could also simply mean that it grew from a very low base. if the base was low enough, a 31.3% rise might not be especially great. also an average doesn’t deal with the enormous differences between urban and rural development.

anyway, the real issue is that the chinese economy remains closed to a large degree, which you should know, given your “advanced degree”. if the ccp was really committed to open markets they would let the rmb float and open their companies to all competition. they don’t do this – not really the stuff of libertarian economic wet dreams, is it?

you also ignore the fact that taiwan, japan and korea all remain closed for a long time, and it was after economies opened in asia that there was the asian financial crisis. china’s avoidance of this crisis was due to the govt control and lack of openness. ha joon chang, amongst others, has written compellingly about this. given you have an advanced degree, i was surprised you didn’t spot this (i take it you have read his stuff, given he is one of the leading development economists in the world) and have a better counter argument.

i am glad that you feel that you can deal with the entireity of the far east (in three lines no less – how brilliant you are) by pointing to china, singapore and hong kong. apart from the fact you are wrong about china being open, you have left out the three countries previously mentioned and most of se asia. i accept that hong kong and singapore boomed when open but they are exceptions to the rule. they also comprise of 20 million people total, which is hardly demonstrative of the entirety of the far east, let alone of developing countries. you also need to acknowledge how far china has opened.

you also neglect the role of the us in development in the far east – they extended a largesse to the area that wasn’t forthcoming for south america or africa. us aid to korea from the 50s to the 80s exceeded their total aid to the entire african continent. again you presumably know this, with your advanced degree. a pity you didn’t explain why you feel this is an amazing example of non govt interference. perhaps this is because it isn’t.

i think that it might a good time to put down your copy of Thomas Friedman and engage with the complex issues and alternative viewpoints rather than patronisingly dismiss them without considering them. personally, i find it hard to believe you have an advanced degree in the subject area, as you appeared to be ignorant of my viewpoint, which is by no means a rare argument within the development field. your inability to deal with my responses says more about your ignorance of the field than it does mine. i hope you can be a little less arrogant, rude and dismissive in the future, as this is not a sign of knowledge but of ignorance. if you really knew your stuff you’d be able to answer me in greater depth rather than give shallow three line dismissal. if i am wrong i am perhaps more likely to accept your arguments if they are delivered in a well mannered and persuasive manner, rather than in your off hand and dismissive style.

apologies for the long post.

March 6, 2008 @ 6:42 pm | Comment

sorry for the double post – it didn’t seem to come up so i posted again.

Oops! Sorry….

March 6, 2008 @ 6:43 pm | Comment

To Dor: I pondered your view about my bigotry. I didn’t make a generalized statement. Aren’t my observations correct though.. that 99.999% government officials are corrupt, etc. I stated that most of the Chinese are industrious, NOT LAZY, as you claimed I did. However, I didn’t want to dwell on your absurd contention, as I realise that one’s opinion is often linked with his/her livelihood. And I respect that choice. I just wonder how you do come out with your observations that they shuffle their feet when they are walking and shifty. I don’t see those points.

To others: If you love the great-looking China statistics so much, it is because you are inclined toward interpreting them that way.
If you looked at the numbers from Indonesia prior the 1997 financial crisis, it was even more impressive than China, except the growth rate (Indonesia’a average growth rate was 7-8% vs China’s 10-11%). The reduction of poverty level, increase of education level, electricity, sanitary conditions, etc, were all so impressive; it becomes the “darling” of World Bank and ADB. But, look where it is now! Therefore, assuming that China will continue to grow at current level and be the most powerful economic giant in the next 15-20 years are merely certain people’s wishful thinking, ignorant of other social issues that are so abundantly clear if one travel around China, visit the factories, schools, and talk with local government officials, and set up and grow the businesses. Looking and interpreting the statistics in China could easily veer one to the wrong conclusion. Foremost, China is a “Controlled State” where figures are “massaged” plus no opposition to challenge the outcome when and if needed.

Second, the education system in many part of China is falling fast. In fact, statistically the majority of schools in China are complete failure (I know DOR will immediately say I am a bigot, but I doubt if he has travelled to many rural areas). China is more than Shanghai, and the coastal cities. Shanghai has benefited from the colonial past. The people are exceptionally progressive, unlike many other parts of China. If you visited schools in rural China, you would be lucky to see 2 to 3 teachers, out of 10 to 15 who draw the salaries. These children are losing the head-start as human beings, especially comparing their compatriots in the cities, perpetuating permanent discrepencies in income levels. If you want to provide any assistances to these schools, you need to get approvals from god knows where, from one approval to another, BUT most important is there should be “meat” to the principles. Even in Beijing, in ShunYi areas you still encounter this mentality, let alone in western regions. Of course, if you notify your visit ahead of time, with your “meat” to the officials and principles, you will be welcome by school bands and smiling students and neat-looking teachers who don’t know where the restrooms are.

Go and visit the rural areas of Hunan, Henan, and the surrounding provinces, open your car windows, see if you can breath. The chemical pollutions are so bad that your eyes become red and mist, and you are choked. The brooks and other irrigation streams are full of chemical waste; they are foamy black or green or red, meandering to crop plantation areas and withering some. The residents there can not complaint to anybody, so much for the greatness of CCP and the egos of the nationalistic Chinese. To satisfy your nationalistic ego, your people suffer; that is what I call bigot.

Go to the suburbs of KunMing, ChengDe, GuangXi, and others, kids of 14 to 17 years old roam the street after 10 pm, drinking and taking drugs ( I forget what the name is) and partying till dawn. Yes, this is China. These kids are left behind. But this information will not appear in the controlled media, and your statistics don’t show up either.

Please visit their food and drugs companies. While some have dramatically improved over the last two years, the majorities are so pathetic! The restrooms remain infamous and the staff go in and out the restroom with the same clothings without washing their hands, and those white clothings are actually brownish. I therefore am not surprise that there are so many problems in their food and drug chains. But the regulations are tougher than FDA requirements. Simply put, it is to protect its domestic market from foreign competitors, at the immense cost to its citizen.

And, there are many more personal observations that make me conclude that China can not be a superpower within 15-20years. In fact, I think it will shrink; that is, China is at the peak or closer to the peak now considering the next 20 years horizon.

Hardly any economists or academia foresaw the tumble of Indonesia; I fortunately did. And I feel the same way about China now. I do hope that I am wrong though, and China will correct the negativity of central planning.

So, running your statistical figures from your desks make you think that China is a superpower country; visiting her in the field is altogether different.

Good luck with the ongoing statistical discussion.

March 6, 2008 @ 10:37 pm | Comment

@Arbutus,

I personally this second post is far stronger than your previous one.

I agree there are immense challenges facing China today. I agree too that China could very possibly fail to thrive, over the next 2 decades. There are tremendous challenges facing China. And I don’t think anyone in China is remotely complacent.

But frankly, I think China has proven itself able to defeat an impressive list of challenges over the past 20 years. If you could tell me that you predicted, 20 years ago, that China could eliminate vast state-owned enterprises without massive urban unemployment; that there would be 5 million+ university graduates; that the economic situation would be what it is today… I would be more impressed with your prophetic powers. I know very few people in China would’ve predicted it.

By the way, I’ve been to rural Guangxi, Yunnan, Sichuan, Shaanxi, and Jilin.

You’ve listed many of the challenges, but I’m also optimistic things are improving. On the issue of production quality… that’s a product of the developing process. That’s what happens when you have farmers with 3rd grade educations running small factories with single digit margins. Every developing nation has gone through a similar time in their economic growth, and some *do* eventually come through.

On the issue of rural education, I’m especially pleased with the strides China has made on this issue over the past 5 years. For much of the decade, I sponsored 15 girls through 6 years of boarding school in western Sichuan (through a Western charity). It was either that, or they’d continue with their yak-herding nomadic existence. Although I intended to continue my sponsorship indefinitely (on a new cycle of girls)… the program’s been canceled, because they now have government funding.

March 7, 2008 @ 1:41 am | Comment

DOR, sure. When a crisis comes, need to know if that’s a 1987 and 2000 crash. Demographics seem to indicate a 2000 type crash is quite far away.

CCT, I am too old to think I can change the world… I may be able to change myself, and that’s about it.

Arbutus, have you been the same places 30, 20, or 10 years ago, and how sure are you that you saw the forest instead of the trees? You know what, forget I asked. Glad you got everything figured out. I urge you to get all the cash you can get, short FXI and CAF. Don’t waste your vision.

March 7, 2008 @ 9:57 am | Comment

@Si,

Hong Kong and Singapore have “20 million people total” ?
I rest my case.

Your comments made it clear you didn’t know the subject; I do.
On the internet, everyone is a dim-witted primary student, until proven otherwise.

If you were on a medical blog (and I assume you’re not a doctor), would you be spouting off unsubstantiated opinions as if they were fact? How about on a legal blog?

But, here it doesn’t matter, does it. After all, we’re all experts, right? No one could possibly have been living and breathing this subject, right in the middle of it, for the past 25 years, right?

Been there, done that.

– – – – –

Starting at a low base helped China, but not India. Why? Lack of openness, ca. 1978-2000.
Therefore, the low base does not sufficiently explain what happened in China.

.

China’s poverty line is calculated exactly the same way by the ADB and other international organizations, as everyone else’s. There are “national poverty lines,” and in the case of China they tell a slightly different story (68% improvement, if I recall correctly) that is also on the website.

Did you look at http://www.adb.org?

.

I dated the stats: “over a 10-15 year period . . .” If you look at the data, it mostly starts in 1990 and runs to 2000, 2001, 2002, 2003, 2004 or 2005.

In a blog comment, that’s “over a 10-15 year period . . .”

.

You may have noticed that none of the stats I cited were “as a percent of GDP” or “GDP per capita.” To an economist (that’s me), that means recent revisions to the size of the economy don’t matter.

Caloric intake? Doesn’t go up or down if you restate GDP the way China did.
Infant mortality? Doesn’t go up or down if you restate GDP the way China did.
And on, and on and on

(that’s why I used those bits of data: the GDP data are crap.)

– – – – –

“why is a 31.3% rise in protein supply particularly good? it could just mean people are eating more and getting fat.”

Eating well is good.
Not eating is bad.
One of the most basic ways of identifying and measuring poverty is to look at what people eat. First comes calories, because they’ll keep you alive. Next, protein, for strong bones and teeth. If you live in the Arctic, fat is critical to staying warm . . . but, it isn’t protein.

Real simple stuff.

– – – – –

“anyway, the real issue is that the chinese economy remains closed to a large degree, which you should know, given your “advanced degree”.”

Compared to which emerging economies?
On the basis of what set of data?
Over what period of time?

Perhaps a link to your sources might help in the future.

– – – – –

“if the ccp was really committed to open markets they would let the rmb float and open their companies to all competition.”

I take it macroeconomic management isn’t your strong suit.

Remember what happened when the yen shot up 71.5% in a period of 3-1/2 years following the Plaza Accord? How about the 56.5% rise in the NT$ or the 33.8% rise in the won?

Do you have the slightest idea what happens to an emerging export-oriented economy when the exchange rate floats?

.

Open to competition? What products have you tried to import into China that were turned away at the border, or hit with other barriers that were not related to the price or cost of production?

.

“you also ignore the fact that taiwan, japan and korea all remain closed for a long time, and it was after economies opened in asia that there was the asian financial crisis.”

But, not you! You advocate exactly the same formula for China! Are you trying to induce a financial crisis? Could it be that the reason China’s leaders don’t follow your advice is because of what happened in Taiwan, Korea and Japan?

– – – – –

You said — “perhaps a link to your killer statistics might help in the future.”

I said — “See http://www.adb.org for the raw data on which to do your own calculations.”

How’s the reading comprehension class coming?

– – – – –

Si,

I don’t want to get into a flame war.
I wrote a blog comment, not a PhD dissertation.

Address what I wrote, if you wish, but blaming me for not having critiqued Chang vs. Friedman on the implications of US involvement in East Asia 40 years ago is just silly.

And, if you won’t look at the data yourself, don’t say that it isn’t supportive of what I wrote.

* * * * * * * * * * * * * * * * * * * *

@Arbutus,

“Aren’t my observations correct though.. that 99.999% government officials are corrupt, etc. correct?”

No.

99.999% of government officials aren’t anything at all.

They are not all rice eaters, tea drinkers or book readers.

That simple generalization is in and of itself the bigotry.

.

And, I didn’t say you said Chinese are lazy, shuffle their feet or are shifty.
I asked if you were going to head in that direction next, didn’t I?

There is a very, very large difference.

– – – – –

There is a difference between a country having an amazingly successful period of development, and perfection. You seem to demand perfection, and all I can say is that you will be disappointed.

March 7, 2008 @ 10:28 am | Comment

@dor

i won’t be rude, so if there is a flame war it won’t come from me. it might be nice if you assume good faith and explain your points rather than being dismissive and haughty. blogs are not going to change people’s minds
but being polite might aid an exchange of information.

perhaps part of the problem is that we are not really seeing each other’s point of view. my understanding of what you are saying is that open markets are always great and that is what every country should do. my contention would be that open markets don’t always work well and that the govt needs to keep control and monitor economic development and how open the economy is. the most developed countries in asia have done this much of the time.

perhaps you also see development purely in terms of economic development, which is fair enough. i see it in terms of human development indexes. in saying i don’t want to get in a pissing war over which is more valid. hence perhaps it is a fundamental misunderstanding going on when you and i use the term “development”.

certainly china’s improvements can be seen as part of their greater openness to international trade. nevertheless cuba has managed better education and health than china without being open. one does not necessarily follow the other, i would argue that there are many factors involved.

anyway i think this thread will be ending shortly.

March 7, 2008 @ 9:54 pm | Comment