China Might Have a Few Problems Too

[mark.d.crowley]

It seems that you can’t click a mouse without seeing a story about the impending fall of the US, and the western world too, from debt and corruption.  By omitting China in any of these stories, except to say that they own our debt, you might think everything is fine.  Well, maybe not…

http://www.caseyresearch.com/cwc/gordon-chang-forbes-columnist-and-author

Some excerpts:

Chinese society now is very dynamic. It's changing faster than any society on earth and what's essentially going on right now is that most Chinese people believe that a one-party system is no longer appropriate for a modernizing society.

Tocqueville noted that peasants in pre-revolutionary France detested feudalism more than their counterparts in other portions of Europe where conditions were worse. Discontent was highest in those parts of France that had seen the most improvement, and the French Revolution followed an economic advance.

We know that because Macau is now the world's largest gaming destination – not Las Vegas – and Macau has just a few casinos, but what's going on there is that the cadres go down and they launder their stolen money in Macau at the high-stakes tables. They turn it into chips, which means they turn it into cash. It goes out of the international banking system. It becomes untraceable. That's why Macau is doing so well at this moment. It's because there's so much corruption;

The real problem is that we see the protests in China increasing. Last year, according to one report, there were 280,000 mass incidents; that's well up from what we saw about five years ago, which were 80,000 to 90,000.

[GlennRobinson]

Perhaps the hints at the reason for creating a troop presence in Australia?

[vern]

Thanks for the article.  It certainly widens the scope of things.

[Mik]

The Chinese economy, and Chinese society, have enormous problems, just as those of the US do. These problems cannot be solved by bigger conglomerations of wealth and power or more centralized authority, in either place.

[mark.d.crowley]

Vern, the more my scope is widened, the more I want to crawl in bed and pull the covers over my head. Prepare to have your scope widened some more...

http://www.theepochtimes.com/n2/china-news/chinese-tv-host-says-regime-nearly-bankrupt-141214.html

Larry Lang, chair professor of Finance at the Chinese University of Hong Kong, said in a lecture that he didn’t think was being recorded that the Chinese regime is in a serious economic crisis—on the brink of bankruptcy. In his memorable formulation: every province in China is Greece.

Cheng Xiaonong, an economist and former aide to ousted Party leader Zhao Ziyang, said that high praise of the “China model” is often made on the basis of the high-visibility construction projects, a big GDP, and much money in foreign reserves. “They pay little attention to things such as whether people’s basic rights are guaranteed, or their living standard has improved or not,” he said.

According to Cheng, the goals of regime officials (to enrich themselves and increase their power) are in direct conflict with those of the people–so social injustice expands, and economic propaganda meant to portray the situation as otherwise prevails.

And this comment needs no explanation:

Despite Lang’s polished appearance on his high-profile TV shows, he said: “Don’t think that we are living in a peaceful time now. Actually the media cannot report anything at all. Those of us who do TV shows are so miserable and frustrated, because we cannot do any programs. As long as something is related to the government, we cannot report about it.”

Take out the Chinese names and places, put in some from our phone book and you would swear it's the US.  Or maybe Greece ("every province in China is Greece").

[vern]

And I don't doubt this all may be true; I'm assuming that it is.  Ashame in a way.  Nixon opened China to the West, again.  America really, really hated China under Mau.  We were reminded of the 70 million killed under a repressive, totalitarian state, and any change seemed like progress.

And as natives first welcomed the Spanish to their shores, so China welcomed massive financial investments from the West.  The economic hitmen found a whale.

[mark.d.crowley]

This is an old topic, but I found a striking article that echos the premise about the Chinese state.  I thought the US might be the most corrupt, but it appears China will give the US a run for corruption.   They seem to have adopted much of the US model.

Here's the link and a few excerpts.

The Chinese Kleptocracy Is Like Nothing Ever Seen In Human History, And This Is How It Works
John Hempton
Jun. 10, 2012,

www.businessinsider.com/how-the-chinese-kleptrocracy-works-2012-6#ixzz1xRgJSBxV

China is a kleptocracy of a scale never seen before in human history. This post aims to explain how  this wave of theft is financed, what makes it sustainable and what will make it fail.

Longevity in China is increasing rapidly and the one-child policy results in a grandchild potentially having four grandparents to look after. The “four grandparent policy” means the elderly cannot expect to be looked after in old age. Four grandparents, one grand-kid makes abandoning the old-folk looks easy and near certain.

Nor can the elderly rely on a welfare state to look after them. There is no welfare state. So the Chinese save. Unless they save they will starve in old age. This has driven savings levels sometimes north of fifty percent of GDP.

And there are good reasons why the Chinese riot with inflation – the poor who save because they are going to starve – get their savings taken away from them. But ultimately the Chinese establishment like inflation – it is what enables their thievery to be financed.

Low Chinese inflation rates will mean reasonable returns on savings for Chinese lower and middle income savers. Good news for peasants perhaps.  But that changing division of the spoils of economic progress will destroy the Chinese establishment (an establishment that relies on a peculiar and arguably unfair division of the spoils).

[Mik]

Kleptocracy? Sounds like Rayburn Smith.