Beijing is in the process of shutting down for the holiday. The restaurants were all half-empty at lunch-time today and the streets seem semi-deserted. Of course, the fact that it’s totally freezing outside with slicing winds  knocking down bicycles and forcing pedestrians to walk with their backs to the wind could be a factor as well. Right in front of my apartment a gigantic, bright red fireworks shop suddenly appeared out of nowhere this morning. I think the only reason it’s so quiet out there is that no one wants to step away from their central heating.

I thought about leaving for the week, maybe going to Kunming or Guangzhou just for a change of scenery and a little more warmth. Then I decided I’d be better off saving the money and traveling when I have friends in town to go with me (which will happen next month). Still not sure how long I’ll be in China after the holiday; it all depends on the job market.  I think within  few weeks after the holiday I should have a pretty good idea of what my new opportunities here are. I’m still working part-time and going to class, but I can’t work part-time forever. Bills are due and all that. But I have to say, working part-time and studying is not a bad way to live.

Lots happened since my last post. America has a new president. China has announced plans to launch universal health care for all, while doling out stiff penalties to those behind the melamine-laced milk that not only killed and poisoned lots of kids but also made nearly all Chinese-made food products radioactive in the minds of consumers. Reports about which way China’s economy is going are still all over the map, and you can find ample evidence for any theory you can come up with. I have no doubt this’ll be the hot topic here for some months to come. 

There’s always a dramatic lull in business before CNY, and this year, based on my talks with friends and colleagues, this year it was deeper and longer than usual. (No surprise there.) Everyone’s wondering to what extent business will bounce back after the holiday ends. I am, too, and the answer could determine how long I stay here. Let’s hope for the best, for America and China, and despite the cliché, a happy Year of the Ox to everyone.

Update: Forgot to mention, this is an open thread, if anyone is around during the holiday to comment.

Slow news time, with CNY around the corner. Feel free to talk amongst yourselves.

Here in China it’s a wretched time for Pu’er tea investors, but otherwise things aren’t necessarily as grim as the newspapers might lead you to believe. At least that’s the claim of this China business blogger who just returned from a depressing trip to angst-ridden Minnesota. He says China’s woes are being exaggerated, and the sky’s not falling over here like it is over there. Interesting perspective, especially on the factory closings.

Yes, there are thousands of factories closing down in China … but have you seen what those are like? Many of them are shoddy Taiwan- or Hong Kong-owned enterprises making commodity junk of questionable quality and pushing it into the market at dangerously narrow margins. If this is you, then yes, you are a statistic and should take immediate action to remedy this situation – I suggest quickly removing yourself from the commercial gene pool. But since junk companies are not this blog’s key demographic, I need to assume you are smarter than this.

We can all be cautiously optimistic about China in 2009. Yes, 8% GDP growth is lower than the 12% we have been experiencing in the past few years, but it is about 9% greater than what most of the rest of the world is experiencing. So find your happy place, and dig down to locate your opportunity in China. Its here. It is not going to be reaching out to grab you; you’re going to have to look for it. But I am guessing that your opportunities among the native Minnesotans – as nice as they may be – are going to be limited. They are too busy looking at their 401(K)s that are sliding quicker that a Lutheran in Sunday-go-to-meeting-shoes the morning after an ice storm.

No, your opportunities are here. And with caution aplenty and wariness radar on full blast, you will find them.

While he’s more optimistic than I am, his post definitely made me wonder whether we’re getting caught up in pack journalism when it comes to the collapse of Guangdong and China’s manufacturing backbone, and whether things are really as dire here as some are saying (or as some would like to see). I just had a conversation with a reporter who told me they’re surprised at just how stable things are here, at least thus far. They said the job market was still remarkably stable; we are not seeing the white-collar layoffs endemic to present-day America. At least not yet. And I don’t hear from people in China what I’m hearing from literally all my friends and family members back home – that their life savings have been reduced to a fraction of what they were a year ago, and that they’re rearranging their entire lives.

I know, there’s a whole lot to worry about and a whole lot of pain down the road for China. But maybe those horror stories from Shenzhen and Guangzhou only tell a part of the story? And maybe this really is the best place to be right now. I’d sure like to think so.

America’s smartest journalist explains how and why the pilot and crew responded so beautifully, and the hazards involved in every take-off and landing. An amateur pilot himself, he offers some wonderful first-hand insights. Please go there.

I read pieces like this, and I so hope professional journalism finds a way to survive.

Man-on-the-street interviews right in Beijing with the working people. Fascinating.  I also love the “I don’t pay attention to anything but money” response. Can’t fault her for honesty.

My one question: How come I never get taxi drivers who wear a jacket and tie, look like a professor and drive such a sparkling clean car? 

Other linklets before I call it a night:

China to create a holiday celebrating the end of feudal rule in Tibet:

Ahead of the politically sensitive 50th anniversary of the Dalai Lama’s flight into exile and the crushing of a Tibetan rebellion, China has told Tibet to celebrate the event as a liberation from feudalism.

Friday’s proposal by China-backed lawmakers in Tibet to commemorate “Serfs Emancipation Day” reflects how differently the Chinese government and Tibetans view historical events that still create friction today.

It also underscores the Chinese government’s efforts to discredit the Tibetan spiritual leader and press people living in the Himalayan region to forget any thoughts of a new separatist rebellion.

China has been preparing for the possibility of more unrest in Tibet since deadly rioting in the capital Lhasa on March 14 last year sparked the biggest anti-government protests among Tibetans in decades — and a major military crackdown.

The official Xinhua News Agency said the region’s legislators proposed that the holiday should fall on March 28, the date in 1959 when China announced the dissolution of the Tibetan government.

A sickening consequence of the one-child policy:

A court in central China has sentenced a woman to death for hiring someone to strangle her 9-year-old son so she could have another child with her new husband without violating population laws, a court official and reports said Friday.

The case stems in part from Chinese policies — in effect for more than three decades — that limit most couples to only one child.

…The report said Li first paid 70,000 yuan (about $10,000) to have a man named Wang Ruijie kill her second husband’s daughter, but the girl resisted and escaped. Li then took her son to a meeting with Wang, who strangled the boy and left him by a rural road.

Hard to imagine, negotiating with someone to murder your 9-year-old son.

Bush’s listless, grim and thoroughly unconvincing speech tonight  was the last he’ll give as president. The world just heaved a huge sigh of relief.  

It’s tempting to rant about the damage he’s done, the loss of prestige we’ve enjoyed under his watch, the wars he started and the opportunities he squandered, the tortured syntax, incongruities and unabashed stupidity of his press conferences, the placing of loyalty above competency and the bankruptcy of a nation that in 2000 stood so much taller than any other that its supremacy and infinite capacity for growth were simply taken for granted. But I think we all know this by now.

All I want to do now is see the stables cleaned and the patient’s body purged of the Bush poison – the war on science, the larding of public agencies with Heritage Foundation cronies, the no-bid contracts to companies owned by political friends and family, the willful ignorance of threats to the environment, not to mention torture, complete secrecy and unaccountability, and…. Well, let’s just say it’s a long list. Obama has his work cut out for him. The country was remade in BushCheney’s image, and now we have to reclaim it, reshape it.

I won’t fisk the speech; it’s not worth it. (For a good takedown of tonight’s last whimper I suggest you check over here. I especially enjoyed the list of topics Bush never mentioned.) He still believes all that we’ll remember was his brief moment in the sun when he picked up a bullhorn amid the rubble of the WTC. And he wasn’t all bad. His policies on Africa and AIDS were good, better than his predecessor’s. There were a few – precious few – moments when I respected him. But all in all, he leaves us with little more than a train wreck.

I read articles today about the possibility of a total collapse of Ireland, Mexico and Pakistan, and other countries may be faring little better. Obviously America can’t be blamed for everything. But we can be blamed as the hub of the financial crisis for jump-starting the mess. As America’s economy goes, so goes the world in this jolly age of Globalization, a term that will soon be ridiculed much as we now ridicule the fantasy of the “New Economy” during the dot-com era, when the wealth would just continue multiplying exponentially – which turned out to be just another version of Dutch tulips.

The Bush administration had all the evidence about the housing bubble and collateralized debt obligations right before its eyes and chose not to look at it. This was symptomatic of the Bush era, when regulation was the enemy, getting rich by any means no matter how questionable or corrupt was extolled, and gutting the government of the competence required to make things work was a celebrated policy. And here we are. Goodbye and good riddance to an incurious little man who no more belonged in the White House than Madoff belonged as the head of NASDAQ. A blight, a disaster and a tragedy, in every conceivable way. A tragedy.

On a more mundane note:

I’ve changed my email address (too much spam on yahoo), so if you write to me please use the new one linked in the sidebar (it’s capcha-equipped to stop the spam bots, so sorry for the extra step). Also, I’m going to be a lot nastier about comments following a spate of bad ones last night. So please be nice. Have a good weekend as we all go into Chinese New Year-mode.

Update: Nice to know that thanks to more interesting news, Bush’s swan song was largely ignored. Fitting.

Maybe I’m living in a parallel universe. Or maybe the reporter who wrote this article for the LA Times hasn’t lived in China and based her story on interviews within a too-specific demographic. Or perhaps she read too much into the fact that an exhibit displayed more photos of Bush than other US presidents, forgetting for a moment that Bush is our current president. Or maybe I somehow only interact with an anomalous minority. Either way, this story is baffling.

Bush might be leaving office with record-high disapproval ratings in the U.S. and elsewhere in the world, but he has many fans in China. He is depicted in a dozen flattering photographs on display at an exhibit in Beijing marking the 30th anniversary of diplomatic relations between the two nations.

…”We will never forget that the leader of the most developed country in the world stood up to pressure to come to the Olympics,” Mao said.

In fact, China’s appreciation of Bush is part of an unlikely romance between the Republican Party and the Chinese Communist Party that dates to President Nixon’s historic visit in 1972. Nixon and Henry Kissinger, who as national security advisor set up the China trip the year before, also are lavishly celebrated in the photo exhibit, which opened Monday. Jimmy Carter, who was president when the treaty to normalize ties was signed in 1979, attended an opening ceremony, as did Kissinger.

Though both Carter and Bill Clinton have places of honor on the walls, the GOP reigns in the display of photographs. One particularly popular image, which frequently appears in the Chinese media, shows George H.W. Bush in 1974, when he was the top U.S. envoy to Beijing, posing casually with a bicycle in front of the Forbidden City.

…During the primaries, Obama was not popular in China, and people following the election campaign tended to favor Clinton, his then-rival. But his popularity soared after he won the election, and a Chinese translation of his book “The Audacity of Hope” soared to the top of the bestseller list here.
“

Let me just say this. In my entire stint in Asia, starting in 2001, I have never once heard a positive mention of Bush by any Chinese person, either in Hong Kong, Singapore, Taiwan or the PRC. Not among teachers, mid-level government officials, co-workers, friends, business people or taxi drivers. Despite the bombing of the Belgrade embassy, I still hear Chinese people praise Clinton. I’m not sure why, but most seem to adore him. The mention of Bush’s name tends to prompt a reflexive reaction of scorn and disappointment. If people were glad he went to the Olympics, they didn’t make a big deal out if it, the way they did over Spielberg’s backing out. And I’m not sure how the reporter measured Obama’s “unpopularity” in China during the primaries. I’m not going to say Chinese people I knew were raving about Obama, and he probably was less popular than Clinton, but I never heard anything indicating he was unpopular. (The only memorable remark I heard about Obama that wasn’t gushing with praise came from a Chinese teacher who, the day after the election, asked me, “How is it possible that white people voted for a black man?”)

Bush may well be popular in government circles here, and with people in the American Chamber of Commerce. The problem is, the headline and much of the content leaves the reader with an impression that a significant number of Chinese people are “fans of Bush.” So again, unless I’m living in a parallel universe, I’d have to say the reporter is giving this article a heavy slant and has not explored all sides of the picture.

Many, if not nearly all of the foreign correspondents in Beijing have been focusing on more or less the same topic for the past six months, namely how the global financial meltdown is affecting one of the most important spokes in the wheel of globalization,China. They’re sending photographers and reporters to the railroad station to get photos of migrant workers leaving Beijing for their hometowns who know they will probably not be coming back anytime soon. They’re sending them to Shenzhen and Dongguan to cover the closings of factories and how each closing ripples through the food chain in concentric circles. As I said in an earlier post (with the best comments thread in years), it’s all economic crisis all the time. Every day. 24/7.

Everything is now discussed in relation to the crisis. Every discussion about future projects I have with people in all kinds of industries includes the obligatory clause about how “it all depends on how bad the crisis is at the time.” Just last night I attended a panel discussion (and an excellent one, at that) on how we in Beijing can apply creativity and entrepreneurial skills to make money at a time when the economy is contracting. I think nearly everyone I know spends a good part of the day thinking about the crisis in some form or another, whether it’s choosing where to go for dinner or what to do for CNY, buying a Christmas gift or renewing your gym membership.

Which brings me to the link of the day. Paul Denlinger recently wrote one of the grimmest arguments I’ve seen about where we’re all heading, and why China and the US have got to crash. Unfortunately, I agree with him pretty much across the board. This is a lengthy clip, but it’s all essential stuff.

Now, China and America are entering a dangerous period of deglobalization, where they have come to the realization that after the bubble pops and the deleveraging begins, their interests are really quite different. Instead of China and America being two sides of the same economic coin, they need to play or pander to their own constituencies. The blame game will begin.

And their native constituencies are confused, hurt and angry. But they are not nearly as angry now as they will be in the near future when they have figured out what has happened to their wealth. When that happens, there will be hell to pay, and there will be blood in the streets.

The reason for this is because the leveraging which occurred is simply too big and too complicated. Taking all the bad leveraging out of the system and replacing it with cash and credit liquidity is like trying to rebuild the engines of an aircraft in flight. It cannot be done. This means that there can only be a crash.

The bright side is that crashes can be managed. You can go into a death spiral which is impossible to pull out of, but a smart pilot will look for a stretch of land and try to glide in for a crash landing. So far, the political leadership worldwide is pursuing policies which more closely follow the former path of the death spiral. This is because everyone is acting in what they perceive in their own interests, instead of keeping their heads and thinking through what needs to be done. It is a deadly panic move.

The problem is that we are now entering a phase where the crisis has spread from subprime mortgages, to derivatives, and then on to currencies. In the beginning the patient suffered from a lack of credit liquidity (constipation), so the central banks are going to provide liquidity (the enema). This did not work, and the patient has become bloated. There is the very real chance that this will eventually cause runaway inflation (dysentery) and the patient will then die of dehydration. When this happens, the currency becomes worthless and society falls apart until a new dictator imposes his will on the society, as Hitler did at the end of the Weimar Republic in Germany. In China’s case, runaway inflation led to the Kuomintang and Chiang Kai-shek’s loss of support in the cities, and directly contributed to the establishment of the People’s Republic.

Sounds really really really bad, doesn’t it? That’s because it is.

I believe Paul’s metaphor is spot-on. The deflation we are seeing now is the first phase in the treatment, and as the patient is bloated – i.e., as dollars are printed and thrown everywhere – inflation is inevitable, if not hyper-inflation. (I think that may be a year or two down the road, with what we perceive to be a deflation in the short term.)

Meanwhile, I am sticking, for now, with my original argument that even though China will be slammed hard, it will hold up relatively better than the US (“for whatever that’s worth,” as I said before). This is mainly because despite its monumental problems and 300 million+ peasants earning less than $1 a day, China has money on hand, and can launch its own stimulus package with far less strain on its coffers. Also, its domestic financial system has been relatively unaffected, while that in the US has been gutted.

Some are far more pessimistic about China’s future. Deported human rights activist and former Sakharov Prize winner Wei Jingshen sees a veritable “tidal wave” of demonstrators threatening the very existence of the Party. John Pomfret says he’s “agnostic” on the question of which country is better poised, but I think if you read his post on the subject it’s pretty clear where he stands, referring to the “irrational exuberance” of those betting on China. The argument will go on for years, and of course for all our passionate exchanges, there’s still no one on earth who knows.

Like last year’s presidential election, we’ve got another horse race to watch, one with far greater consequences. The way the world’s leaders handle or mishandle this albatross will affect each of us for years to come, maybe for the rest of our lives. I increasingly feel this is not a recession, it’s a depression, and we’re pretty much there. When companies that were seen only months ago as robust report profit losses well above 50 percent, and when you think of the effect their factory closings and layoffs will have right down the food chain, from plastics manufacturers in Dongguan to a family in the Dominican Republic waiting for the monthly check from their daughter working as a nanny in NYC, you can’t help but shudder. Nor can you help but be glad that at this moment you’re in China, as everyone who attended last night’s forum agrees. There are still opportunities and untapped markets here, and most importantly, customers with some cash to spend. Right here in Beijing.

Let’s take a break from China for a minute and savor this list, which spans across ideologies and targets figures on all sides of the aisle, including our newly elected president. Of course, the Michelle Malkin blurb was especially enjoyable:

It’s a remarkable achievement in unconscious projection that the author of a book called Unhinged could lose her fucking marbles over a patterned scarf in a donut ad, but that’s what Michelle Malkin did when she sounded the nutbar clarion call and sicced her half-cocked league of masturbators on Rachel Ray and Dunkin Donuts for the flatly absurd notion that they were sending a message of solidarity with Palestinians. Right, Michelle—you just can’t sell donuts without joining the intifada these days. What did the nauseously spunky Ray do to incur the wrath of the Malkinoids? She wore a black and white scarf. A paisley scarf. A scarf that was clearly not a kaffiyeh, which, by the way, is just a hat that Arabs wear, not some universal symbol of jihad. In terms of completely false outrage, the only thing that rivaled this travesty of reason this year was the “lipstick on a pig” metaphor panic. But what puts this embarrassing sham over the top is that Dunkin Donuts actually apologized and pulled the ad, rather than try to explain to the fact-phobic horde that they were just blind, raging idiots with the collective brain-power of a lobotomized howler monkey.

49 other selections, each one devastating, even if I don’t think some of the choices deserve to be on the list. The Sarah Palin and Bernie Madoff selections are also wickedly funny. Their server has been off and on, but keep trying.

Please take a moment to visit Global Post, a new site that offers not only significantly above-average reporting on a wide range of topical issues, but that also was kind enough to include me in its aggregator of global bloggers.

When they first asked if they could run my posts on their site I was a bit hesitant. I knew nothing about them, and I’ve always been cautious about associating TPD with other sites. After looking into have a look.

Update: The more I see of this site the more I love it. Forget about some posts of mine showing up on its aggregator. This site rocks, and should be a daily visit for people who want serious news beautifully told, with lots of photos and video and imagination.