When I was in the US for Thanksgiving, I couldn’t help but notice that the news was all economic crisis all the time. There was only a short window of “relief,” when the news out of Mumbai overshadowed America’s – and the world’s – financial implosion.

It isn’t much different over here in Beijing. Talking with the teachers at my school and my Chinese colleagues in the office, nearly all of whom are in their mid-to-late 20s, I was impressed by their awareness of just how serious this crisis is and how it affects their own hopes and dreams. There are no illusions, which I see as a good thing. No false expectations that things will soon return to normal.
I see this pragmatism as a good thing. The government is not showering the public in sugar-coated messages, promising that things will soon be shiny and happy once more (though I’m sure we could find some examples of that). Instead, things seem remarkably sober, at least here in Beijing.

People always refer to Chinese stoicism, and we’re seeing it now. Students graduating from college know that finding the job they may once have assumed would be waiting for them will be an exercise in frustration and repeated disappointment. Several friends of mine say they are looking for new jobs, not because they necessarily want to leave their current ones, but because they fear the axe might fall at any moment. On the other hand, those who are unhappy with their current jobs realize now isn’t the time to resign, at least not until the ink has dried on the contract for their next job.

Which brings me to the link of the day, to a story on Slumping Economy, a message board set up by unemployed Chinese white collar workers in Shanghai, which has been drawing a huge audience. The piece underscores my own observations that the Chinese are taking the crisis in stride, and that they understand its implications for their own lives.

Maria Yin, a 24-year-old recent college graduate, started searching for jobs in Shanghai this past summer, but has had no luck yet. “It seems that lots of people are facing the same problem as I do now. It makes me feel less desperate,” said Ms. Yin, who posts on Slumping Economy. “I’ll keep going.” She said she spends an hour or so surfing the site daily, chatting with her new friends and keeping an eye out for job information.

One popular thread has members thinking of cheap ways to celebrate the coming Christmas, which has been adopted by young people and residents as an opportunity to spend time together or to share romance. Some suggested holding an online Christmas party with virtual food and gifts provided, while others said they would figure out their own ways to spend the holiday in the real world.

“I’ll put on my best cotton-padded jacket and trousers and go downtown together with my boyfriend to the most beautifully decorated square. We’ll take a photo together using my mobile phone, and then spend three yuan each to take bus No. 925 home,” wrote one user, known as Chloe.

It’s a sad, tense, confusing time for everyone. I saw it in America and I’m seeing it here. I’m glad at least that in China people are psychologically prepared for the worst. I had a sense, totally unscientific, that people in America were less well prepared, if only because crisis and deprivation have been so distant from them for so many years, even for generations. American s appear far more shell-shocked than the Chinese.

I have a really bad feeling about this. For all the many faults of America’s auto industry, now is not the time to let it disintegrate. Especially not when we’re propping up a more insidious and far less worthy entity, namely the financial industry. An astute financial reporter makes a persuasive argument:

They don’t deserve a bailout.

But then again, neither did Wall Street. The presumption, as we were told by the likes of Senate Minority Leader Mitch McConnell, R-Ky., was that the consequences for the greater economy would be simply too disastrous if we just stood by and watched as the financial titans whose own greed and irresponsibility created this mess crashed and burned. And that was back in September, several months before the economy started losing half a million jobs a month (a number that seems sure to go up judging by today’s awful jobless claims figures). The U.S. economy is in much worse shape than it’s been for at least a quarter-century, and appears to be unraveling at terrific speed. Thus, an even more timely case can be made for saving Detroit as was offered for Wall Street. Does it really seem like right now is the best time to see what happens if G.M. declares bankruptcy? As a worst-case scenario, might not it be better to help Detroit limp along for another year or two, until we see whether we can get out of what our current president not too long ago called “a rough patch”?

…There’s no sugarcoating this one — what’s good for Wall Street fat cats is not good for unionized Midwestern workers. It’s hard not to agree with the Detroit Free Press: We’re witnessing payback time for the UAW. Republican senators are on the warpath against organized labor.

Leave it to the Republicans to bailout Wall Street while kicking Detroit in the back. And maybe Detroit should be kicked in the back. But not right now, and not with such blithe difference to the consequences. They are playing with dynamite in a house of cards. The closing words of that article are scary as hell.

[I]t’s not so difficult for me to imagine looking back at this point from the perspective of a future historian detailing the events that led up to the Second Great Depression, and deciding to pinpoint the abandonment of Detroit as yet another grievous error that ensured a patient barely holding it together on life support went terminal.

I am under some pressure to return to America. For a number of personal reasons, I may have to. But once more, I feel that this remains a good time to be in China and paid in RMB. America really is on life support.

It’s been a long time, so some quick predictions: Current “deflation,” which is actually more of a disinflation – a return to where prices should be – will be short lived and oil prices will rise again. It’s a good time to buy oil, though it may remain depressed for another couple of months. The strengthening of the US dollar is also short-lived and will collapse as more money gets printed going forward. The new wave of home foreclosures will hit early in 2009, further devastating the banks. More money will need to be printed. You cannot have a strong dollar under those circumstances. While gold may not make you rich yet, it is still a safe bet. So is shorting long-term US treasuries. That’s my advice, take it or leave it.

Meanwhile, China will feel the pain, but will survive. As I say in my previous post, they are ready for the worst. America isn’t.

[Update: You can now follow Richard on Twitter.]

It may be a few weeks, it may be longer. I have goals to meet and decisions to make and I can’t focus on priorities when I have to keep running to the PC to police comments and scour the Web for the latest news to opine on. I kind of wish I’d done this earlier; the last few posts haven’t been my most sparkling.

I’ll be back, I know that. I have some big posts incubating, but now is not the time. I have to turn the whole thing off for at least a month. The only exception will be if one of the guest bloggers decides to put something up. Until then, there are many other blogs to visit, and you can find my recommendations over to the left. Thanks for joining me, and goodbye for now.

His best column ever. (Of course, there’s a catch.)

Via ESWN.

After realizing I meet China’s official criteria for Internet addiction, I’m trying to resist the urge to stay online and look for things to blog about. This post, however, jumped out at me. It’s short but pregnant with examples of China’s sloppy, propagandistic unique approach to journalism. And it’s funny, too.

Please keep it 100-percent LDS-free and FLG-free. Otherwise, discuss what you’d like. Everything related to the financial crisis and China’s stimulus package should go in the thread immediately below. Thanks.

Potential topics:
Shouldn’t every family have at least one gun?
The pope praises Ma for working with China (blocked in the PRC)
China’s “human flesh search engines” get global attention

We all knew this was coming. None of us knows whether it will work, and as I pointed out last week, there are some very different schools of thought on the topic. From today’s Times:

In a sweeping move at a time when major projects are being put off around the world, Beijing said it would spend an estimated $586 billion by 2010 on wide array of national infrastructure and social welfare projects, including constructing new railways, subways, airports and rebuilding communities devastated by an earthquake in southwest China in May.

The package, announced by the State Council Sunday evening, is the largest economic stimulus effort ever undertaken by the Chinese government and would amount to about 7 percent of the country’s gross domestic product during each of the next two years.

Beijing also said it was loosening credit and encouraging lending as part of a more “pro-active fiscal policy.”

“Over the past two months, the global financial crisis has been intensifying daily,” the State Council said in its statement. “In expanding investment, we must be fast and heavy-handed.”

The stimulus plan would be enormous for any country, let alone one whose gross domestic product is lower than most other major industrialized countries, at around $3.5 trillion this year. Earlier this year, the United States Congress passed a $700 billion bailout package in a country with an economy whose size is close to $14 trillion.

One prominent American blogger looks with envy at China’s ability to pony up such a staggering sum and laments America’s inability to fill its own coffers to handle emergencies like this and mostly blames Bush, which isn’t that simplistic considering we were in the black when he took office.

During boom times, China amassed budget surpluses and built up reserves. Now, during a downturn, they’re able to respond with a huge spending initiative at a time when (a) such spending is needed to keep the economy going, and (b) the downturn makes it cheaper than it would otherwise be to complete such projects….Bush took the situation and decided on a combination of irresponsible tax cuts for the Americans who needed them least, an enormously expensive new war whose massive costs involved little if any productive investment for the future, and homeland security spending much of which (like complicated-yet-pointless enhanced airport security) mostly serves as a minor drag on economic activity.

Please note this isn’t to blame only Bush for the financial collapse itself – only for bankrupting the Treasury before the crisis even hit and making a China-like solution far more difficult.

On the other side of the coin, a prominent Chinese blogger who blogs in Chinese sent me his thoughts on China’s stimulus package via email. A fascinating perspective:

I do NOT think those infrastructure investment from Chinese govnerment is the solution to the coming Great Depression. The reason is very simple: if common Chinese people still are reluctant to make consumption instead of save money in the future, every policy stimulus is useless. The only effective way to fight the crisis is to make the poor have more money to spend, but this is the last thing Chinese government will do.

Actually, I hope the crisis will bring us a revolution.

Well. That sure opens up a barrel of questions.

As I said in my earlier post, if this crisis really hits China as hard as some of my readers believe, and if the government handles the stimulus package as dreadfully as it’s handled some other crises, revolution, however unlikely, is not inconceivable. The consensus in the earlier thread was that revolution was not in the cards, as the CCP has already demonstrated its willingness to send in the tanks.

I can’t go quite as far as my fellow blogger and hope for revolution. I hope for more money and opportunity to reach the huddled masses without a revolution that could leave everybody worse off. (If someone could answer the question of who would fill the power vacuum I might be persuaded to hope for it.) Maybe the realization that revoltuon is even possible will shake the Party into a realization that two vastly separated nations, Rich China and Poor China, is not a sustainable model, and that it’s time for some serious, intelligent wealth-spreading.

Pass the popcorn and watch the global drama unfold.

Update: I am happy to see that my fellow blogger has put up his own post in Chinese about our email conversation. You can see it here. I truly admire his courage, not to mention his intelligence.

I’m inclined to think so.

Living in America’s second largest Mormon stronghold for many years, including two years in a predominantly Mormon office, I was treated to a bird’s eye view of the squarest, looniest cult in America. And I mean loony. They have every right to practice as they please and believe in whatever they choose to. It’s when they decide to meddle in the law and legislate discrimination that my feelings go from distaste (with just a dash of revulsion) to feeling the need to speak out.

It’s now the time to speak out, as those interviewed in the article make clear. And I don’t care how “icky” some may think the idea of gay marriage it. That’s not the issue. The issue is passing a proposition that is a pure, undisguised act of discrimination, wrapped in the canard of “the sanctity of marriage.” If that were so important to these hypocrites, they would have put all that cash behind a proposition banning divorce.

There’s a delicious irony to seeing all this moral indignation over the sanctity of marriage coming from the not-so-long-ago polygamous Mormons, whose sects in my own state still have multiple wives including child-brides.

Update: Good perspective here as well.

For some background perspective, just yesterday “Dr. Doom” Roubini said China is on the verge of “falling apart.” That’s a pay site, but here is a chunk, thanks to another site:

[T]he risk of a hard landing in China is sharply rising; a deceleration in the Chinese growth rate to 7% in 2009 – just a notch above a 6% hard landing – is highly likely and an even worse outcome cannot be ruled out at this point. The global economy is already headed towards a global recession as advanced economies are all in a recession and the U.S. contraction is now dramatically accelerating. The first engine of global growth – the U.S. on the consumption side – has now already shut down. The second engine of global growth – China on the production side – is also on its way to stalling.

Thus, with the two main engines of global growth now in serious trouble a global hard landing is now almost a certainty. And a hard landing in China will have severe effects on growth in emerging market economies in Asia, Africa and Latin America as Chinese demand for raw materials and intermediate inputs has been a major source of economic growth for emerging markets and commodity exporters. The sharp recent fall in commodity prices and the near collapse of the Baltic Freight index are clear signals that Chinese and global demand for commodities and industrial inputs is sharply falling. Thus, global growth – at market prices – will be close to zero in Q3 of 2008, likely negative in Q4 of 2009 and well into negative territory in 2009. So brace yourself for an ugly and protracted global economic contraction in 2009.

John Pomfret of the Washington Post wholeheartedly agrees with the doomsters (and Roubini’s track record is spectacular, there’s no denying that). He also specifically takes issues with the NYT editorial board for its somewhat rosy belief that China can spend its way – and the world’s – out of a recession.

There’s been a lot of talk in recent weeks about how China could ride to the rescue of a global recession, using the latent power of 1.3 billion consumers to power global GDP. Who would have thought that we’d be calling on China to save our bacon? Witness a New York Times editorial on Oct. 26 with the remarkable headline: “As China Goes, So Goes….” What the Times called for, and what others have seconded, is for China to unleash domestic demand, ramp up imports, thereby keeping the global economy afloat.

First, before we get into why this probably won’t happen, let’s pause for a second to reflect on just how amazing it is that we’re asking China to prop us up. Yes, yes, China did yeoman’s work during the Asian financial crisis of 1997. But that was a pretty localized mess. What the Times — and others — are asking China to do is not just be a responsible player in its region (which at the time simply meant not devaluing the yuan). No, what the Times and others want China to do is to step forward and in a flash take over the United States’ position as the engine of global growth. That’s a pretty big demand for a country with a per capita GDP that’s in 109th place on the International Monetary Fund’s World Economic Outlook Database, squarely between Swaziland and Morocco.

As to whether China will take up the challenge: I think not. China would have to restructure its economy if it wanted to significantly grow its domestic demand. But right now China’s economy is facing real problems.

You have to read Pomfret’s entire post to see why he so strongly agrees with Roubini, and why he believes the crisis will make the CCP only more reactionary (as opposed to enlightened, as the NYT editors optimistically hope). After looking over the dismal situation, he comes back to his central thesis, first discussed here back in 2004, i.e., that as long as China’s pig-headed reactionary government is in charge, they will keep blocking their own path to superpower status and will probably never arrive there.

Unlike Pomfret, I’ve predicted China would have yet another soft landing. I’m willing to consider that I may be wrong, unlikely as that may be. The Roubini-Pomfret scenario is too frightening to imagine. If they are right, we are talking about the possibility of civil war. If there were a true financial collapse in China, either that or anarchy are not inconceivable. China’s situation is so, so tenuous, despite the amazing strides it’s made. That’s why so much here is subsidized and the iron rice bowl is still an important crutch, and why the government is going to be the candyman for the unemployed, either simply handing out money or setting up massive infrastruture projects to keep people employed and, most important, pacified.

Which brings me to my last half-baked point. I was speaking with a friend today who is involved with one of those gigantic Chinese manufacturing companies; this one makes concrete. When I expressed my worry that concrete makers would feel the pinch when overseas orders drop off and Chinese businesses stop expanding and building new structures, he said that scenario is simply wrong. “China is about to pour billions and billions of dollars into infrastructure projects to keep the economy going,” my friend reminded me. “This company is planning on a huge expansion of business.” So again, can China spend and build its way out of this? Stranger things have happened, no?

So many tectonic plates rubbing against one another, so many ways this whole thing can go, not just for China but for the world. For now, perhaps out of willful ignorance, I stick with my prediction: a relatively soft landing for China. Pomfret’s one of my heroes and I’ve agreed with him on just about everything in the past. Same with Roubini. But this time, they both had better be wrong. Otherwise, we are all in a lot more trouble than we ever imagined. It won’t be at all pretty, no matter how much we may dislike the CCP and hope for its demise.

No time to add brilliant commentary. I just want to say this reminds me of the fen qing throwing eggs at Japanese cars and businesses back in 2005. What a great way to further your cause.

Hundreds of Taiwanese protesters surrounded a hotel Wednesday where a Chinese envoy was attending a dinner banquet, tossing eggs, burning Chinese flags and trapping him inside into the early morning hours.

Chen Yunlin, the highest-ranking Communist Chinese official to ever visit Taiwan, has drawn daily protests since his five-day trip began Monday.

He was able to leave at 2:15 a.m. after police with riot shields and clubs began shoving the protesters away from the front of the Grand Formosa Regent Taipei hotel. Some demonstrators had to be dragged or carried away

The Chinese official came to sign a trade agreement with Taiwan that many believe will greatly ease tensions between the rivals. But many of the protesters distrust Beijing and oppose closer ties with the island’s biggest security threat….

Many of the approximately 800 protesters Wednesday night supported permanent independence, and some chanted ”Communist bandit get out.” They tossed eggs and pounded on cars that tried to leave the Grand Formosa Regent Taipei hotel.

Brave heroes or crazed idiots? Your call.