A message from China

Discussion in 'Politics' started by Drifterwood, Apr 24, 2009.

  1. Drifterwood

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    Don't think that the Chinese aren't also having a tough time. They will pretend like they are not or are coping, but the truth is that tens of thousands of factories are closing, millions are losing their jobs every week.

    I keep hearing two responses from Chinese business owners.

    1/ We will work harder, we will work smarter. This from the people that work twelve hours a day six days a week.

    2/ We support the idea of a global currency or at least a Eurasian Dollar.

    I will be happy to have an intelligent discussion with anyone about these things, but if you want a Fox News rant, please go Fox yourself.
     
  2. javyn

    javyn New Member

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    This economic downturn is going to have severe political consequences in Pakistan, China, and Russia. Look for riots, and possibly revolution.
     
  3. B_Nick4444

    B_Nick4444 New Member

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    riots, and other expressions of discontent

    revolution in Pakistan, possibly; Russia and china, no
     
    #3 B_Nick4444, Apr 24, 2009
    Last edited: Apr 24, 2009
  4. javyn

    javyn New Member

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    I wouldnt rule anything out.
     
  5. D_Fiona_Farvel

    D_Fiona_Farvel Account Disabled

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    Drifterwood,
    Of course, China has been hurt by the global economic troubles, however, they are a command society with a mixed economy, and have national savings, and are still on an individual level, a saving culture. I think overall they will be OK.

    I just read Zakaria's book Post-American World 3 weeks ago, and agree we are entering a new era of history where China, India, Brazil, and Southeast Asia are coming to the fore and I think this period of global economic failure is an important test of their viability as a world power.

    Great question.

    Russia is a semi-authoritarian state, imo, there will not be a revolution anytime in the near future.

    I seriously doubt this economic situation will bring revolution to China, if anything, their economic prosperity brought more change, socially, economically, politically, than any movement I can think of after Mao.

    Pakistan has been going through a quiet, or rather, underreported, tribal and Islamist revolution for about 20 years.
     
  6. Phil Ayesho

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    China is in a very bad way.
    Their economy is presently entirely and utterly dependent upon export, and they are faced with a people who have come to expect an increasing standard of living, coupled with increasing freedoms.

    The problem with China has always been that the government lives in terror of the masses.
    Everyone in the west cries over the Tiannemen square massacre... but those people are usually shit ignorant of the back story.

    The truth was that the uprising was almost entirely college students- and that college students had to work part time jobs- the majority of which were driving short haul delivery trucks.
    The government was actually very conciliatory toward the uprising, at first.
    And they actually met the striking students demands...
    but the students did not return to work...
    Instead, they pulled the same stupid ass stunt the Solidairnosh pulled in Poland... rather than accept their victory and go back to work, they simply upped their demands... and continued to strike.

    At the point the government sent in tanks, strikes were starting to spread to other cities- city stores were running out of groceries, all the supplies that a cities requires to be trucked in daily were not coming in, and the refuse not going out.
    The majority of the residents of Beijing were hungry and on the brink of taking to the streets. Another week of striking and there would have been food riots in the cities.

    The govenrment sent in the tanks, because the students were drunk with power and could not be relied upon to go back to work no matter what concession the government offered.

    China was days away from an urban-wide revolution-
    I know its not the populist view... but the govenrment had no choice but to send in the tanks and re-establish order- and get services and goods flowing again.
    And under similar circumstance- the US would send out the national guard without a second thought.


    Now, the urban chinese are similarly accustomed to things getting noticably better..
    And they are still extremely naive about the fundamental responsibilities that are concurrent with greater freedoms.


    The Chinese government understands that they are faced with a population that has precious little experience with the power of democratic reform...
    if the masses opt to demonstrate, history shows that they are likely to not bargain in good faith, nor understand the critical importance of accepting a workable compromise and getting back to work.

    All urban societies are similarly brittle... just weeks away from running out of everything and the total collapse of economic flow.

    So China is treading a fine line- desperate to keep their own economy going by trying to focus more of their production inward- which requires the creation of a consumerist population. and trying to control information so as to keep people from knowing the full scope of internal problems and to obfuscate the formation of movements and rallies.

    But their biggest obstacle is their own culture of graft and corruption.
    It's not a government problem- every level of Chinese society is rife with bribery, scams and cheating.
    Its endemic to their national psyche.
    The Melamine and lead filled toys are just the tip of the iceberg...

    You can not even buy an extension cord in China that will hold firmly onto a plug- because the manufacturers wont' spring for the extra tenth of a cent per part for springy metal contacts.

    China is, at present, a paper tiger.
    Or, more aptly... a collandar in lieu of a wok.

    They look good as long as vast sums of foreign capital are being poured in faster than it can leak thru the holes...

    But as soon as the cash flow slackens, you can see that they do not hold water.

    China has been a nation for thousands of years, and has NEVER dominated the world... in spite of having invented everything from the compass needle to gunpowder.

    They are unlikely to deveolp the chops to do so just because they have started to dabble in capitalism.


    The only truly stable and productive democracies in the world today, outside of europe, are all former colonies of the British Empire.

    It takes hundreds of years of exposure to the ethos of a capitalist democracy for another culture to really begin to understand the delicate balance of freedom with obligation that makes democracies and open markets function effectively.

    China has not had that background, Has little concpetion of the scottish enlightenment thinking that underpins any modern exercise in rule of law with maximal personal freedom.


    The Chinese people are children playing with fire.

    And their government knows this.
     
  7. B_starinvestor

    B_starinvestor New Member

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    China is indeed hurting quite badly. Their GDP growth has averaged around 10% for the the last 30 years; but 1st quarter annualized GDP growth was only 6.1%.

    Unemployment is causing severe angst and demonstrations. 7 million students have recently graduated from college and are now competing with the unemployed for jobs

    College enrollment is way down; Chinese students that study oversees have decreased dramatically; global demand in nearly every sector is down.

    Worst of all, the housing market is suffering greatly; and this is an extremely important component of net worth for the Chinese; as bank and CD investments actually provide negative real returns because inflation exceeds interest rate; and their stock market has been murdered over the last year.
     
  8. D_Fiona_Farvel

    D_Fiona_Farvel Account Disabled

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    One could argue that China has not yet held a position of global power because they were, and remain to some extent, a closed society. If I recall correctly from Zakarias book and Braudel, China had a long standing policy of isolation from the rest of the world. Even going so far as to employ a "scorched earth" policy that prevented trade for a long period.

    I'm baffled by why their lack of knowledge about "scottish enlightenment" would be a factor?
     
  9. D_Tully Tunnelrat

    D_Tully Tunnelrat New Member

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    Actually there are many who say that China's central government will fall very quickly if the growth rate falls below 5% for any period of time. There are simply too many new people streaming into the workforce, and the cities looking for decent paying work. Government forces would be unable to contend with demonstrations of a million plus in more than one city. Small Chinese cities house 10-12 million, so with 10% unemployed you can see how the numbers quickly spiral out of control.

    Russia runs the danger of economic collapse. They are still heavily dependent on oil revenue, which is what brought down the Soviet Union, not Reagan. If oil stays above $40, they will be ok, but if it slumps to $20, there will be insufficient revenues to prop up what is still largely an agrarian economy. Then look out below.

    Pakistan is on the verge of violent revolution with the Taliban 65K outside Islamabad. Very scary stuff.
     
  10. D_Tully Tunnelrat

    D_Tully Tunnelrat New Member

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    Exactly. After the last voyage of the famous Admiral Zheng He (Muslim eunuch) with the Chinese Armada (biggest in the world then: 300 ships 28K men) returned from the Indian Ocean where they traded finished goods for raw commodities, the Armanda was burned, and the door to China largely shut.
     
  11. D_Tully Tunnelrat

    D_Tully Tunnelrat New Member

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    :biggrin1: Funny metaphor.

    As advanced as Chinese culture is, in many ways, you are right it has little experience with capitalism, or any kind of representative government. How that will play out is anyone's guess. Our own experience, political systems aside, transitioning from an agrarian society to a industrial one was hardly smooth either, if you recall the Pullman labor strike of the 1890's, and the Anthracite coal strike of '02 to name a few, but they will pale by comparison to the strikes we are already seeing in China.
     
  12. D_Fiona_Farvel

    D_Fiona_Farvel Account Disabled

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    Thank you, I couldn't recall the exact details.
    Idk, call me twisted, but I love reading about scorched earth tactics. :08:
     
  13. Phil Ayesho

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    look around.

    The idea of modern free societies has its roots in the magna carta, and the freemason's revolt.
    The result of those two events was the cultural meme that no one person has absolute power- that the people in some form have a voice in governance. And the notion that a man can rise in society as far as his talents and ingenuity will allow.

    That fundamental idea of social parity, and representative government led to the scottish enlightenment...
    which gave birth to the American revolution, and the ultimate independence of every british colony. ( not to mention the french revolution and every other parliamentary government in Europe. )

    Democracy did not start with our revolution... we were simply one step in the moral arc of the evolution of free society.

    When you look around the world, the most stable democratic states are all former colonies of GB. This is because a long colonial exposure to these ideas, to british rule of law and societal norms gradually seeping to the local cultures, to the extent that when they undertook independence, they were better able to undertsand and execute democracy... and more resistant to the idea of cults of personality that lead to despotism.

    Spain colonized far more nations than GB- yet they show a poor record record of producing free states that are stable with low enough levels of graft to allow for class mobility.

    Freedom is not EASY.
    It requires a populace that largely subscribes to a large set of ethical and moral ideas that form a cultural ethos conducive to peaceful transfers of power and genuine respect for a leveler playing field.


    From India to Kenya, to America to New Zealand... the most stable democracies on earth are cultures that hybridized with Britain.

    That is how critical the scottish enlightenment was to the arc of world history.

    China lacks these concepts...
    And you can't 'explain' them to them...
    It has to be something they are raised to feel... it has to be the perspective they were raised with, that makes them react to unfairness politically... that makes them less likely to act corruptly simply because they have opportunity.


    The west has its fair share of of untrustworthy assholes...
    but free societies require a certain high percentage of inherently honest believers in fair play for the phenomenon of freedom to be sepf supporting.
     
  14. Drifterwood

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    So many interesting points.

    China holds more US$ than anyone else in the world - around $2 Trillion of the real stuff. If the US just prints more as it has done over the last x years, they will be reducing the value of what the Chinese earned and saved. This will be just the most recent case of foreigners coming to China and taking what they want or doing unequal business.

    However the Chinese have been buying commodities. World demand for copper is down 20%, yet the price is up over 40% so far this year. Yes the Chinese are using paper to buy real stuff, stuff that will run out, that they will have and we will need.

    No doubt Fox will mouth off again about China, but what do you expect them to do? Your companies went there and exploited the low costs and made huge amounts of profit which they kept off shore and put many of you out of work at home in the process. The US accounts for 60% of exports from China, three times the amount to W Europe on a per capita basis.

    You have each other by the balls. It's going to be interesting.
     
  15. D_Tully Tunnelrat

    D_Tully Tunnelrat New Member

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    Yes, we basically outsourced our manufacturing to China over the last decade. And in cases where China became too expensive, we moved factories, as did other corporations/countries, to Vietnam. Even so exports will continue to be vital to the Chinese economy. If the yuan were allowed to float, that dynamic may change.

    I don't know if you heard Jackie Chan's comments about China recently. He thought that democracy was too tempting and too chaotic for the Chinese, as he feels it is in Hong Kong, where he is from. He closed with the comment that he is only going to purchase a tv from Japan, as a Chinese made one may blow up on him. Needless to say, it has raised a furor in China especially in light of the melamine related deaths last year.

    China is now trying to be internally financed, that is to say a consumer culture, where stuff is made in the same place it's bought. This will be hard to do in an economy with no financial safety net, and a 50% savings rate. However, if you have 1.3 billion people, and if 30% become middle class, that's more relatively affluent consumers than the US, or EU has people, which will put tremendous pressure on resources, such as copper which you mentioned.

    This is also how China will use it's economic muscle. They are already making deals to procure set amounts of commodities from other nations, with advance payments, such as the deal they made this with Brazil Petrobas. Or acquiring key raw materials suppliers such as Rio Tinto.

    I think the US will ultimately be able to finance it's deficit internally, now that our consumer culture has been permanently interrupted. Savings rates have already risen to 5%, and will probably hit 10% soon. With China's economy bound to grow to equal the US over the next 25 years, there is no question, that at least economically, the China-US relationship will be one of the world's most important.

    BTW China was the world's largest economy till 1900 when the US overtook it.
     
  16. D_Tully Tunnelrat

    D_Tully Tunnelrat New Member

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    In this case it's more of a wet earth tactics.:biggrin1:
     
  17. maestro071

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    Don't know about what kind of democracy Americans are talking about? Look your own history first and then comment and preach about the democracy... Should one remind you about your democracy toward Indians or not so descent one toward Afro-Americans...Its clear that democracy issues are well used to interfere in other countries internal matters, allowing US to play world policeman No 1, as perceived so by the rest of the world..."
    ...
    China is far from being ideal state, but their role in international policy in the recent years is far more human and democratic then the one US had (its enough to mention US role and its "democratic " achievement in Iraq...)
    Eduardo Galeano said China : " China is putting into practice a successful combination of political dictatorship, in the old communist style, with an economy that functions at the service of the capitalist world market. China can thus provide an extremely cheap workforce to U.S. enterprises like Wal Mart, which bans unions. "...
    I agree totally
    About the crises, yes it will affect all world. China less then US and Europe.
    About the current situation and the effect of the crises on the western countries I will again quote Eduardo Galeano : " We know quite well, however, that this system - which privatizes its profits but kindly socializes its losses, and as if that weren’t enough convinces us that that is philanthropy - will live more than seven lives. "
     
  18. Phil Ayesho

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    This suggests that the Chinese are being taken advantage of...
    As if China were even remotely playing fair at global economics....
    In fact, their markets are heavily protected, and they refuse to allow the RMB to be freely traded... the routinely determine the exchange value of the RMB artificially...

    They invested heavily in US dollars because the US dollar WAS the least volatile, most negotiable currency... and they have used those dollars to support the value of the RMB the way we used to support our own currency with gold.

    Now that the US dollar is as volatile as any other currency... they are in a pickle... but it is wrong to feel sorry for them for it... they knew precisely what they were doing... rigging the currency market in their favor to try and keep China's growth in double digits.


    Prices for copper reached a sufficiently high level to spur development of new copper resources ( there had not been a new copper mine opened, or expanded in over 40 years ) but World demand for copper only recently fell, with the collapse of the world economy... and that fall was almost entirely due to China and India suddenly cutting back on purchases.
    2 years ago copper was scarce as China and India bought it all up to electrify vast swaths of of their countries.
    Yet, still, most factory towns have scheduled brown outs or power blackouts because they grew far faster than their electrical infrastructure.



    YOu know what happens when tweo guys have each other by the balls?
    They become EXTREMELY cautious and cooperative.
     
  19. lucky8

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    This also works for the debt we owe China as well. The higher the inflation rate, the less money we actually owe China because most of the debt is nonadjustable. I think that's the real issue here...China is afraid the US is devaluing our currency so they want to find a replacement
     
  20. Drifterwood

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    You could look at it another way.

    Either they float their currency and it is strengthened and the value of their $s fall, or you print more money and the value of their $s fall. :rolleyes: Maybe this is a game that they do not wish to play; you call it free market economics, others call it playing a game where you have set the rules so that you always win. Furthermore, when there is demand for copper, a mine can be reopened anywhere in the world, whilst you have the monopoly on producing $ monopoly money.
     
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