Archives for category: Posts

I was discussing Chinese infrastructure with someone new to China a few days ago.  They lamented how in the US, our highways are often tattered and torn, our rail system (Amtrak) is practically nonexistent, and our urban mass transit is only passable in a handful of very large cities.  Compared to China, where you only need to wait 5 minutes for a bus, and something like a dozen cities have subway systems, he was right that the US looks to be falling behind quite dramatically.

Read the rest of this entry »

Update: Added some great quotes from The New Yorker at the end of the post.

With all the doom and gloom about raising the debt limit of the US government (currently at $14.2 trillion dollars), it’s hard to remember that this is the original issue which started all this hysteria about government spending and whether or not to raise taxes.  I strongly believe that the debt limit itself is useless and does little to control spending.  There are far more useful market incentives to controlling the debt, and it is frustrating to watch this become such a political football when real people are the ones who suffer if the US defaults.

Read the rest of this entry »

Who coined the term “widget” anyway?  Ah, but we are talking about China now, so perhaps they were one of the four (five) great inventions that benefited mankind.  The others, of course, being soccer, pizza, Koreans, and unsanitary conditions.

But anyway, today we talking about the dilemma of a widget maker in China, or the value of increasing your own value, in the value-added chain.  This is an especially sensitive time for China in this regard, and if they continue their present course, China is likely to become too expensive before it becomes rich.  Let me explain:

Read the rest of this entry »

Major news outlets have been covering the looming Chinese debt crisis more vigorously as of late.  The New York Times has a “Room for Debate” section last week that was pretty good, and had a number of experts weigh in on what’s going on with Chinese debt.  There’s a lot of talk in theoreticals, so I thought it might be interesting to portray this in an anecdotal fashion instead.  I would clearly prefer using a cartoon to describe this, but my artistic skills have not graduated beyond the stick-figure level.  Anyway, here’s our imaginary scenario on how infrastructure over-investment could precipitate an economic crisis.

Read the rest of this entry »

China’s economy is undoubtedly growing at an awesome rate.  I read today that over the past 31 years, yearly GDP has grown by 9.9%, on average.  Compared to the US’s 2-3%, that’s incredible.  But Chinese people still aren’t rich.  Even when you look at GDP per capita, according to the CIA Factbook Chinese people make about 16% of what Americans make.  But according to consumer spending studies, they only have 6% the purchasing power of Americans.  Another alarming statistic is productivity versus wages: Chinese are on average 1/3 as productive as an American worker, but receive 1/10 the wages.  Why are they not cashing in on the China boom?  Where are the consumers?

Read the rest of this entry »

I’ve written before about civil society in China, and how it’s lacking, and how it’s scary to those in power (see some of my earlier ideas on Four Chinas theory for some examples).  To recap, most democratic societies have a strong concept of “civil society”.  I’ll go into explaining what that means in a bit, but it’s something very obviously missing from China, and this is a categorically negative thing.

Read the rest of this entry »

Predicting Chinese economic performance is useless.  It’s really impossible to guess, since there are just countless variables.  Given the nature of the Chinese state, most of these variables are confidential, further adding to the hilarity/difficulty of trying to make an accurate prediction about the Chinese economy. Nonetheless, many academics, bankers, and policy wonks have made it their professional hobby to give their two cents.

Read the rest of this entry »

With the rise of the middle class in major cities throughout China, a potentially very disruptive identity is also bound to emerge: The concept of the individual taxpayer.

Read the rest of this entry »

Two (probably) unrelated stories that reflect the difficulty of getting facts in China.

The first has do to with the $400 million dollar renovation of the National Museum of China.  I guess I should have probably seen where this is going based my experience visiting the Shenzhen history museum, but Chinese museums seem to have no problem creating an entirely flawless image of the Communist Party.  Foreigners, emperors, and certainly the old Republican government can be corrupt or evil, but the Party can do no wrong.

Read the rest of this entry »

As Foreign Policy magazine puts it, things are going from bad to worse for anyone who has a history of challenging one-party rule.   More than 50 people have either been charged with subversion or have simply “disappeared”.  Liu Xianbin will spend another 10 years in the slammer in addition to the previous 10 he did for the same crime (advocating non-violent political reform).  Ai Weiwei, an incredibly popular artist in China and abroad has disappeared without a trace from a Beijing airport.  Something like 200 other activists have either reported house arrest or under constant police observation.

This is really getting out of hand.  It’s probably the biggest sweep up of dissidents in a decade.  So far I’m able to get on WordPress and use the VPN just fine, but who knows how long that will hold out.

Anyway, hope all these people are safe and get released soon.  It will be very interesting to see if this generates more anti-government attitudes (it seems like it would) or if these dissidents will really be scared off.