Stories about the “two faces of China” and the separate universes in which they exist are now so plentiful most us skip them over – we know the scene too well. Last week’s breakdown of the transportation system in the wake of record snowstorms , however, brought the story back into the public eye with the vivid poignancy that only a photograph can. There were the swelling masses surrounding the train stations, the poor workers who have only a few days every year to be with their families, and poor Wen Jiaobao with his bullhorn, the guy the party always trots out when the masses need to be soothed.

One Beijing reporter writes today of the international consequences of this circus – of how it gives the world a picture of China that is the exact opposite of what China wants the world to think.

While the generals dined in London, the poor bloody infantry were in the Guangzhou trenches.

For them, those station platforms were evidence of the shameful fact that China is still, at heart, a fragile country, one whose political and business leaders can engineer the occasional victory to impress foreigners but find it hard to respond to the needs of the struggling billions at home.

While the weather was the worst in 50 years, I was surprised at the number of people for whom snow on the line washed no better as an excuse in Shanghai than in Surrey. The railways being state-run (and so is Chinalco, by the way), their failure was a failure of government.

In many ways, they are correct in seeing China in this light, and the desperation on the faces of those crowds, or the fate of Mrs Chu Hongling, who gave birth after spending three days in a snow-bound bus on a motorway, are a warning of the hubris that can befall any nation that is told too often that it represents the end of history.

A trillion dollars it may have in foreign exchange reserves, but the Middle Kingdom remains an unequal and fragmented society, still traumatised by war, famine and revolution, and still led by a government that is opaque, often unresponsive, and in many ways self-serving.

I wish I had a copy of some of the CCTV footage I saw last week. Most unforgettable was a clip of old men shoveling snow in front of a train station with Wen Jiaobao standing nearby. All of the four or five men were beaming with joy, flashing these shit-eating grins at the camera, looking just like those old drawings of Lei Feng grinning ear to ear as he darns soldiers’ socks in the night. “We are happy to serve our parts as cogs n the great socialist machine!” The reality was grim and dark, but the picture China was putting out to the world was all sweetness and light. It was obviously choreographed and totally artificial, but so are all their propaganda efforts.

Take a look at Spencer’s article. He cleverly draws a parallel between how China handled the storms and how it handled the secret corporate raid yesterday of Rio Tinto, the Australian mining company.

This was done to a woman who called the police for help. It is beyond unbelievable. It is beyond repellent. See the video. Read the comments. Then think hard about what’s wrong and what led us here.

Two reporters called me in the past three weeks to see if companies I work with will discuss how they feel inflation in China is going to affect their business. It is here, and I think it’s going to be the big word of 2008, just as “sub-prime” was the big word of 2007 (at least in the US).

One of my client-friends was telling me a few weeks ago how he and his wife had budgeted 100 to 150 RMB a week for food for themselves and their infant son. Now his wife is spending more than 200 RMB. It’s when I talk with people like this that I remember that not everyone has RMB to burn on Da Dong dinners and iPhones. This is a white-collar worker with a degree who has studied in the US.

Another friend of mine moved out of Beijing more than a year ago and now wants to move back, but he is shocked at the increase in rent. Of course, that’s more the Olympics than ordinary inflation, but many here seem to feel property prices will remain high even after the crowds go home in late August. This friend is also white-collar, and I truly feel for him. What is a scarcely noticeable up-tick in prices to me is a catastrophe for him.

With this in mind, I enjoyed this post about the fear of inflation and the tendency of the Chinese people to value cash over everything else. This mindset has served China well in the recent past, but it could spell a lot of disappointment in the future.

While China was very poor in the fifties, sixties and seventies, there was virtually no inflation.

Today in China, we are seeing the early signs of inflation again in food prices and property prices. For any Chinese government, and this government is no exception, inflation is the greatest single and most frightening enemy it faces. It may creep up slowly, but it unleashes forces which can easily spin out of control.

If a government cannot maintain the value of its currency, it cannot protect its citizens, and the people end up in the poor house. It’s that simple.

This is why the Chinese government will not easily revalue the yuan upwards, and why the government keeps such a tight control on credit.

One of the upsides for Chinese businesses investing in Africa is that although the people are poor, at least they pay cash. When times turn hard, you want to be paid in cash.

For most Chinese, you aren’t rich unless you own cash.

Credit is just a derivative and in tough times, no one wants derivatives.

The same blogger – one of the smartest out there – thinks there might be better places to put one’s money.

Via Danwei, a priceless illustration of the CCP propaganda department’s heavy-handed censorship. And they do this with a straight face. Thank god for blogs.

It’s Saturday, and a work day in China thanks to the country’s impossibly strange holiday policy, giving you a long week off for Spring Festival but making you work through the weekend in return. Like a lot of other things here, it’s something you get used to.

It’s not only a workday, but it’s an intense workday. The government is open for business today, and in my work for one of my clients I have to deal with a particular government agency that I am now convinced represents the pinnacle of bureaucratic incompetence, arbitrariness and outright stupidity. My Chinese colleagues have been on the phone with them all day, and have been coming to my office nearly in tears at the outrageous and inexplicable demands. This agency makes K.’s dilemma in Kafka’s The Trial seem pleasant. I am waiting for the day when I can write my book and tell the world just how primitive and dysfunctional the bureaucracy here is. Someday. Not now. At the moment, I love this government agency and appreciate all their help and cooperation.

That was all just an irrelevant preface to an article that caught my eye on the “myths” behind both China’s and India’s “economic miracles.” Forgive the scare quotes, but I’m not 100 percent sure whether these things are actually myths or whether what’s happened in China and India are actually miracles. I’m especially not sure if the parallels the writer tries to draw between the two countries apply. I don’t know enough about India to judge, but I am always suspicious when explanations sound just a bit too tidy.

This, he says is the universally accepted myth:

A mix of market reforms and global integration finally unleashed their [India and China’s] entrepreneurial energies. As these giants shook off their ‘socialist slumber,’ they entered the ‘flattened’ playing field of global capitalism. The result has been high economic growth in both countries and correspondingly large declines in poverty

This, he says, is the reality, at least in regard to China:

Start with the claim that global integration and associated market reforms resulted in high growth, which in turn produced dramatic declines in extreme poverty. Applied to China, the timing simply does not fit. China has indeed made large strides in foreign trade and investment since the 1990s, but well before then, say between 1978 and 1993, the country had already achieved an average annual growth rate of about nine percent – even higher than the impressive seven percent growth rate in East Asia between 1960 and 1980.

China’s poverty-reduction storyline is similarly flawed. While expansion of exports of labor-intensive manufactures lifted many people out of poverty over the past decade, the principal reason for the dramatic decline over the past three decades may lie elsewhere. World Bank estimates suggest that two-thirds of the decline in extremely poor people (those living below the admittedly crude poverty line of one dollar a day per capita at 1993 international parity prices) between 1981 and 2004 had taken place by the mid-1980s. Much of the extreme poverty was concentrated in rural areas, and its large decline in the first half of the 1980s may have been principally the result of domestic factors that have little if anything to do with global integration: a spurt in agricultural growth following de-collectivization, in which output increased at 7.1% per year on average between 1979 and 1984, almost triple the 1970-78 rate; a land reform program, involving a highly egalitarian distribution of land-cultivation rights subject only to differences in regional average and family size, which provided a floor for rural income; and increased farm procurement prices.

I was taking all of this seriously, thinking this writer might be making some good points, and then I came to this astonishing paragraph:

China’s earlier socialist period arguably provided a good launching pad for market reform. That foundation provided wide access to education and health care; highly egalitarian land redistribution that created a rural safety net and thus eased the process of market reform, with all its wrenching disruptions and dislocations; increased female labor participation and education that enhanced women’s contribution to economic growth; and a system of regional economic decentralization (that linked the career paths of Communist Party officials to local area performance). County governments were in charge of production enterprises long before Deng Xiaoping’s economic reforms set in, and, even more significantly, the earlier commune system’s production brigades evolved into the highly successful township and village enterprises that led the later phenomenal rise of rural industrialization.

Oh god. And this guy is telling us what he sees as the myths about China? It sounds like he’s swallowed the biggest myth of all, hook, line and sinker. Some of the comments are intense and make for good reading.

I know, this post is meandering and inconclusive. Honestly, it’s mainly to take my mind off the government agency I need to deal with in a few minutes. But I love working with them.

I’ve been searching lo these many years for a decent visual metaphor that could in some small way capture the US policy experience in our War on Terror in general, and Iraq in particular. Ah, the miracle of YouTube.

h/t Bill Simmons.

An intriguing article appears in this week’s NY Times Magazine that I recommend you check out. No matter which way you lean, I suspect it will ruffle feathers. Written by thinktanker Parag Khanna, its main theme is the shift in the balance of power, which is more dramatic than a lot of us want to admit.

I began to recognize Hu Jintao’s foreign policy prowess back when I was living in Taiwan, long before I became a paid shill for the CCP. It became clear to me then, as I wrote at the time, that Hu was successfully scooping up allies alienated by Bush, and building alliances that shrewdly guaranteed China’s continued growth, opening up both new markets for exports and new pipelines for badly needed resources such as oil, iron, nickel, etc. (In that same post, I also noted the paradox of Hu’s utter impotency when it comes to controlling the thugs in his own party, in his own country.)

Anyway, pardon the long clip, but it’s thought-provoking stuff.

At best, America’s unipolar moment lasted through the 1990s, but that was also a decade adrift. The post-cold-war “peace dividend” was never converted into a global liberal order under American leadership. So now, rather than bestriding the globe, we are competing — and losing — in a geopolitical marketplace alongside the world’s other superpowers: the European Union and China. This is geopolitics in the 21st century: the new Big Three. Not Russia, an increasingly depopulated expanse run by Gazprom.gov; not an incoherent Islam embroiled in internal wars; and not India, lagging decades behind China in both development and strategic appetite. The Big Three make the rules — their own rules — without any one of them dominating. And the others are left to choose their suitors in this post-American world.

The more we appreciate the differences among the American, European and Chinese worldviews, the more we will see the planetary stakes of the new global game. Previous eras of balance of power have been among European powers sharing a common culture. The cold war, too, was not truly an “East-West” struggle; it remained essentially a contest over Europe. What we have today, for the first time in history, is a global, multicivilizational, multipolar battle….

Without firing a shot, China is doing on its southern and western peripheries what Europe is achieving to its east and south. Aided by a 35 million-strong ethnic Chinese diaspora well placed around East Asia’s rising economies, a Greater Chinese Co-Prosperity Sphere has emerged. Like Europeans, Asians are insulating themselves from America’s economic uncertainties. Under Japanese sponsorship, they plan to launch their own regional monetary fund, while China has slashed tariffs and increased loans to its Southeast Asian neighbors. Trade within the India-Japan-Australia triangle — of which China sits at the center — has surpassed trade across the Pacific.

I thinki Khanna’s onto something, even if he is a little too admiring of China while too easily dismissing India and Russia. I know, we can also find quotes that describe China teetering on collapse. Personally, I don’t think there will be any collapse any time soon – certainly some pain as the country feels the sting of decreased US imports, but China has stacked the deck too craftily while Bush played his cards like..well, he basically threw his cards on the floor.With zero moral compunction or conscience, Hu has befriended the scum of the earth, coddled them and established close relations with them. Totally vile, but also shrewd in the classic Macchiaivellian sense of the ends justifying the means. To Hu, all that matters is feeding the beast of China’s economic engine and he’s not going to let small things like human rights or genocide get in his way. It’s a cruel and heartless world and China has 1.3 billion mouths to feed and Hu and his Gang are going to do what they perceive is in the country’s best interests and anyone who dares get in their way will be crushed like a gnat. Whatever you have to say about them, one can’t deny that their Tsinghua University engineer’s approach to foreign policy has achieved many of the desired results, odious as they may be. The deals have been made; much of Africa is in Hu’s pocket.

As a disclaimer, I know nothing more than any average layman about China. I blog for fun, and my Chinese is only at an upper-elementary level (getting better, though).

Welcome to the new age of liberty and tolerance and women’s rights. Too, too terrible.

This just out from the Foreign Correspondents Club of China:

Dear Colleagues,

We’ve received the following report of an incident in which plainclothes thugs tussled with a German TV crew to prevent their interview with Yuan Weijing, wife of imprisoned activist Chen Guangcheng, in Shandong. Although there were no injuries, this was apparently quite a worrisome situation. We thought you’d be interested to know about it.

FCCC

THUGS INTERFERE WITH GERMAN TV CREW IN SHANDONG, THROW STONES

JAN. 24, 2008 — Six to seven plainclothes thugs prevented a four-person ARD TV team from approaching the home of Yuan Weijing in a Shandong province village. It was the second attempt in two weeks by Germany’s ARD to talk with Yuan, wife of imprisoned blind human-rights activist Chen Guangcheng.

During the first attempt, police had arrested Yuan’s brother shortly before the team arrived. In the more recent incident, two of the thugs had stones in their hands and threatened the journalists. During the brawl that ensued, the cameraman fell to the ground. One of the thugs hit the camera with a stone, but didn`t destroy it. The team was not beaten but the journalists were threatened, insists ARD correspondent Jochen Graebert.

Although nobody was injured, he says, “these guys were like fighting robots. It was a dangerous situation.” After the team retreated to the outskirts of the village, Yuan came out of her house but was prevented from speaking to the media.

“Fighting robots.” Exactly. No thought or conscience, just doing as told, the banality of evil.

From now through August, each of these stories will be framed around the Olympics, like the Hu Jia article I posted yesterday. I wonder if they had any idea what they were getting themselves into when they signed on the IOC’s dotted line. Based on stories I’ve heard, I would conclude no – they had no idea, and they are totally paralyzed now that they realize the international media cannot be controlled by an edict from on high.

As I suggested earlier this month, Giuliani effectively left his campaign in the hands of the Fates by waiting until Florida to really campaign. McCain’s victory in that state demonstrates that his choice was a poor one – the hare spent so long sleeping under the tree that the tortoise was already approaching the finishing line by the time he got up.

Clearly McCain is the Republican front-runner – Giuliani’s has endorsement will help him in large states such as New York, New Jersey and California. Not all votes will go McCain’s way, but Romney is kidding himself if he thinks he can win a majority of Rudy’s backers. Although Super Tuesday may not give McCain an automatic victory in getting the magic number of delegates, I believe he will get enough to ensure the following states fall into line.

So, after McCain was written off a few months ago, how did it all turn around? I’m not sure anyone can easily put their finger on it. It’s many things, such as Huckabee stopping Romney gaining momentum in Iowa so New Hampshire could go to the senator from Arizona. News reports from Iraq improved and the immigration debate disappeared from many people’s minds when the legislation in question was killed off.

But at the end of the day I think his one strong point has been his image (I make no comment on whether that is true or not) as the “Straight Talker”, the guy who does actually believe in something and will stick with that even if people don’t like it. Romney, who was happy to tell people what they wanted to hear, was unable to come across as a reliable, honest candidate despite spending millions of dollars in every state to get his message across. This should please even Democrats, as it shows Americans can’t be fooled by someone just throwing money at the TV and radio stations.

Raj