China – Page 10 – artdiamondblog.com

“We Don’t Need No Thought Control”

“In Hong Kong, protesters march against Beijing’s introduction of ‘Chinese patriotism classes’ in schools.” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. A11) Consider the . . . scene in Hong Kong, where tens of thousands of parents, teachers and students protested an effort by Beijing to re-educate the inhabitants of the former British colony, which reverted to the mainland in 1997.

Hong Kong people objected to a government-funded booklet titled, “The China Model,” which was supposed to educate them in the patriotic ways of the mainland. It celebrates China’s one-party Communist regime as “progressive, selfless and united” while criticizing the U.S. political system as having “created social turbulence.”
There is no reference to the Cultural Revolution or Tiananmen Square–history also suppressed on the mainland, where the Web is largely censored. The booklet even encourages Hong Kong people to learn how to “speak cautiously,” a highly unlikely development to those of us who have lived in Hong Kong with its often pungently plain-spoken citizens.
The chairman of the pro-Beijing China Civic Education Promotion Association in Hong Kong, Jiang Yudui, tried to defend the booklet by saying, “If there are problems with the brain, then it needs to be washed, just like dialysis for kidney patients.”
This led the Hong Kong education secretary to back away, assuring that, “Brainwashing is against Hong Kong’s core values and that’s unacceptable to us.” Meanwhile, Hong Kong’s sophisticated protesters carried banners that included lyrics from British rock group Pink Floyd, “We don’t need no thought control.”

For the full commentary, see:
L. GORDON CROVITZ. “INFORMATION AGE; Brainwashing in the Digital Era.” The Wall Street Journal (Mon., August 6, 2012): A11.
(Note: ellipsis added.)
(Note: the online version of the article was dated August 5, 2012.)

China’s State-Owned Enterprises Lose Money and Slow Growth

Source of book image: http://s.wsj.net/public/resources/images/OB-UU147_mcgreg_DV_20121001022644.jpg

In the passages quoted below “SOE” means “state-owned enterprise.”

(p. B1) If the U.S. needs another wake-up call, it will get one this week with the publication of a bracing account of the danger that China’s state capitalism poses to global business–and to China itself. James McGregor’s new book, “No Ancient Wisdom, No Followers: The Challenges of Chinese Authoritarian Capitalism,” dissects the complex policies and state structures that produced China’s novel system. And it describes the limited recourse the U.S. and other nations have. (Full disclosure: Mr. McGregor is a friend and former colleague at the Journal.)

“The Communist Party of China has two unwavering objectives: Make China rich and powerful and guarantee the Party’s political monopoly,” Mr. McGregor writes. “At the center of this are behemoth state-owned enterprises that dominate all key sectors and have been instrumental to the country’s current success.
“As China’s global reach expands, this one-of-a-kind system is challenging the rules and organizations that govern global trade as well as the business plans and strategies of multinationals around the globe. At the same time, the limits of authoritarian capital-(p.B2)ism are increasingly evident at home, where corruption is endemic, the SOEs are consuming the fruits of reform, and the economic engine is running out of gas.”
Born in the 1950s when 10,000 Soviet advisers helped China organize central planning, the state-owned enterprises quickly became bloated extensions of the Party’s patronage and power.
. . .
The enterprises themselves, meanwhile, crowded out private competition. SOEs account for about 96% of China’s telecom industry, 92% of power and 74% of autos. The combined profit of China Petroleum & Chemical and China Mobile in 2009 alone was greater than all the profit of China’s 500 largest private firms, Mr. McGregor writes.
An independent Chinese study, he adds, says that if you subtract government subsidies from the biggest SOEs they actually lose money.
Mr. McGregor believes pressures are building within China for change–the result of SOEs that don’t innovate enough, slowing growth, an angry private sector, and a pending leadership change, among other factors. Even some top leaders say reform is needed.

For the full commentary, see:
JOHN BUSSEY. “THE BUSINESS; Tackling the Many Dangers of China’s State Capitalism.” The New York Times (Fri., September 28, 2012): B1 & B2.
(Note: ellipsis added.)
(Note: the online version of the article has the date September 27, 2012.)

Book under discussion:
McGregor, James. No Ancient Wisdom, No Followers: The Challenges of Chinese Authoritarian Capitalism. Westport, CT: Prospecta Press, 2012.

“Oldest” Pottery Now 2,000 Years Older

“Pottery made by mobile foragers dates back 20,000 years.” Source of caption and photo: online version of the NYT article quoted and cited below.

The evidence quoted below is somewhat esoteric, but it bears on an important issue: how long ago did our ancestors become our equals in terms of biological and intellectual abilities? (The longer that period, the longer is the handle in McCloskey’s “Great Fact.”)

(p. D3) Fragments of ancient pottery found in southern China turn out to date back 20,000 years, making them the world’s oldest known pottery — 2,000 to 3,000 years older than examples found in East Asia and elsewhere.
. . .
The crockery, found in Xianrendong Cave in Jiangxi Province, belonged to a group of mobile foragers, Dr. Bar-Yosef said. They were a hunting and gathering community; plant cultivation and agriculture probably did not arrive until about 10,000 years later.

For the full review, see:
SINDYA N. BHANOO. “OBSERVATORY; Remnants of an Ancient Kitchen Are Found in China.” The New York Times (Sun., July 3, 2012): D3.
(Note: ellipsis added.)
(Note: the online version of the review has the date June 28, 2012.)

The full reference for the book under review, is:
Wu, Xiaohong, Chi Zhang, Paul Goldberg, David Cohen, Yan Pan, Trina Arpin, and Ofer Bar-Yosef. “Report; Early Pottery at 20,000 Years Ago in Xianrendong Cave, China.” Science 336, no. 6089 (June 29, 2012): 1696-700.

“If Apple Is a Fruit on a Tree, Its Branches Are the Freedom to Think and Create”

(p. B3) Millions of Chinese flooded the popular micro blogging site Sina Weibo to tweet their condolences on the death of Steve Jobs over the past two days. They also raised the question: Why isn’t there a Steve Jobs in China?
. . .
One of the most popular postings on Mr. Jobs’ legacy came from scholar Wu Jiaxiang. “If Apple is a fruit on a tree, its branches are the freedom to think and create, and its root is constitutional democracy,” he wrote. “An authoritarian nation may be able to build huge projects collectively but will never be able to produce science and technology giants.” On that, Wang Ran, founder of a boutique investment bank China eCapital Corp., added, “And its trunk is a society whose legal system acknowledges the value of intellectual property.”

For the full story, see:
Li Yuan. “China Frets: Innovators Stymied Here.” The Wall Street Journal (Sat., October 8, 2011): B3.
(Note: ellipsis added.)

Feds Subsidize First Solar’s Losing Technology

(p. B2) First Solar’s solar-panel business, which is focused on large solar installations that feed electricity to power companies, is dependent on government subsidies awarded to such developments.
. . .
But some worry that First Solar isn’t well positioned for industry trends. The global solar-power market is moving toward rooftop solar-power systems, rather than the large-scale utility power plants where First Solar’s products are most effective, said Jesse Pichel, an analyst at Jefferies Group Inc.
“This was a market leader, but its technology is being usurped or surpassed by the Chinese,” said Mr. Pichel. “Their product is not competitive in the most economic and sustainable solar market, which is rooftop.”

For the full story, see:
CASSANDRA SWEET And RUSSELL GOLD. “First Solar Cuts 2,000 Jobs; Panel Maker Laying Off 30% of Workers, Slashing Production Amid Supply Glut.” The Wall Street Journal (Weds., April 18, 2012): B2.
(Note: ellipsis added.)
(Note: online version of the story is dated April 17, 2012.)

“Innovation and Invention Don’t Grow Out of the Government’s Orders”

“”You can have democracy no matter what level of development. Just look at the Arab Spring.”- Zhou Youguang” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A5) BEIJING. EVEN at 106 years old, Zhou Youguang is the kind of creative thinker that Chinese leaders regularly command the government to cultivate in their bid to raise their nation from the world’s factory floor.
So it is curious that he embodies a contradiction at the heart of their premise: the notion that free thinkers are to be venerated unless and until they challenge the legitimacy of the ruling Communist Party.
Mr. Zhou is the inventor of Pinyin, the Romanized spelling system that linked China’s ancient written language to the modern age and helped China all but stamp out illiteracy. He was one of the leaders of the Chinese translation of the Encyclopaedia Britannica in the 1980s. He has written about 40 books, the most recent published last year.
. . .
His blog entries range from the modernization of Confucianism to Silk Road history and China’s new middle class. Computer screens hurt his eyes, but he devours foreign newspapers and magazines. A well-known Chinese artist nicknamed him “Trendy Old Guy.”
. . .
THE decade-long Cultural Revolution that began in 1966 wiped out Mr. Zhou’s lingering belief in communism. He was publicly humiliated and sent to toil for two years in the wilderness.
. . .
About Mao, he said in an interview: “I deny he did any good.” About the 1989 Tiananmen Square massacre: “I am sure one day justice will be done.” About popular support for the Communist Party: “The people have no freedom to express themselves, so we cannot know.”
As for fostering creativity in the Communist system, Mr. Zhou had this to say, in a 2010 book of essays: “Inventions are flowers that grow out of the soil of freedom. Innovation and invention don’t grow out of the government’s orders.”
No sooner had the first batch of copies been printed than the book was banned in China.

For the full story, see:
SHARON LaFRANIERE. “THE SATURDAY PROFILE; A Chinese Voice of Dissent That Took Its Time.” The New York Times (Sat., March 3, 2012): A5.
(Note: ellipses added.)
(Note: the online version of the article has the date March 2, 2012.)

In China the Rich and Creative Prepare to Vote with Their Feet

“Shi Kang, a millionaire writer living in Beijing, started thinking about emigrating after a long road trip last year around the U.S.” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. A1) BEIJING–This time last year, Shi Kang considered himself a happy man.

Writing 15 novels had made him a millionaire. He owned a luxury apartment and a new silver Mercedes. He was so content with his carefree life in Beijing that he never even traveled overseas.
Today, a year later, Mr. Shi is considering emigrating to the U.S.–one of a growing number of rich Chinese either contemplating leaving their homeland or already arranging to do it.
. . .
(p. A12) A survey published in November found that 60% of about 960,000 Chinese people with assets over 10 million yuan ($1.6 million) were either thinking about emigrating or taking steps to do so. The U.S. was the top destination, followed by Canada, Singapore and Europe, according to the survey by the state-run Bank of China and Hurun Report, which analyzes trends among China’s wealthy.
. . .
Mr. Su was no dissident, though. Like many of his generation, he turned his attention to getting rich. Today, at 46, Mr. Su runs his own aerospace technology company and estimates his own net worth, including the various properties he owns, at around 80 million yuan, or close to $13 million.
His main reason for leaving, he says, is the business environment. “The government has too much power,” he says. “Regulations here mean that businessmen have to do a lot of illegal things. That gives people a real sense of insecurity.” He said four of his distributors have also applied for investment immigration to Canada.
. . .
“The problem is that government power is too great,” Mr. Su says. “When the economy is going up, they think that everything they are doing is right.” If they don’t change, he worries, “another revolution will come soon.”
. . .
The current migrant wave is different in that they are escaping neither poverty nor political unrest–and many say they are leaving for good. The Hurun survey showed that the average respondent had 60 million yuan in assets and was 42, old enough to remember the 1989 Tiananmen crackdown, but young enough to have learned how to prosper in a market economy.
Deng Jie fits the profile. Twenty-seven years ago, in the fledgling years of China’s market reforms, he began his career in a state-run ceramics factory in Beijing, sharing a cramped dormitory with colleagues and earning 50 yuan a month (about $13 in those days).
Today, at 48, he runs his own chemical pigments business and lives with his wife and daughter in one of the three luxury apartments he owns. In dollar terms, he is a millionaire several times over. His properties alone have appreciated by 800% in a decade.
Yet the hope he felt for his country in the 1980s, he says, has “been doused with bucket after bucket of cold water.” He cited a host of concerns, including rampant corruption among the officials he deals with, and new labor regulations that he says have made his work force too costly and demanding.
“I’m representing a lot of other people like me,” he says. “We used to want to contribute to the nation. But now we just feel so disappointed. China cannot continue like this. It has to change.”

For the full story, see:

JEREMY PAGE. “Plan B for China’s Wealthy: Moving to the U.S., Europe.” The Wall Street Journal (Thurs., FEBRUARY 22, 2012): A1 & A12.
(Note: ellipses added.)

Source of graph: online version of the WSJ article quoted and cited above.

“Human Progress Is Built on Man’s Desire to Correct His Mistakes”

Source of book image: online version of the WSJ review quoted and cited below.

(p. A17) Yu Hua is one of China’s most acclaimed novelists, hugely popular in his own country and the recipient of several international literary prizes. He brings a novelist’s sensibility to “China in Ten Words,” his first work of nonfiction to be published in English. This short book is part personal memoir about the Cultural Revolution and part meditation on ordinary life in China today. It is also a wake-up call about widespread social discontent that has the potential to explode in an ugly way.
. . .
Mr. Yu argues that corruption infects every aspect of modern Chinese society, including the legal system. Historically, Chinese peasants with grievances could go to the capital and petition the emperor for redress. Today, Mr. Yu writes, millions–yes, millions–of desperate citizens flock to Beijing each year hoping to find an honest official who will dispense justice where the law has failed them at home. What will happen when they discover that their leaders at the national level are just as corrupt as those at the local level?
The violence and deprivations of the Cultural Revolution are by now well known, but Mr. Yu’s reminiscences add color and texture to what the world has learned in recent years about that lost decade. The youthful Yu Hua is something of a wise guy and a schemer, pitting himself against bureaucratic inanities. It is sometimes impossible to know whether to laugh or cry.
. . .
As awful as the Cultural Revolution was, in Mr. Yu’s telling its horrors sometimes pale next to those of the present day. The chapter on “bamboozle” describes how trickery, fraud and deceit have become a way of life in modern China. “There is a breakdown of social morality and a confusion in the value system of China today,” he states. He writes, for example, about householders around the country who are evicted from their homes on the orders of unscrupulous, all-powerful local officials.
Mr. Yu’s portrait of contemporary Chinese society is deeply pessimistic. The competition is so intense that, for most people, he says, survival is “like war.” He has few hopeful words to offer, other than to quote the ancient philosopher Mencius, who taught that human progress is built on man’s desire to correct his mistakes. Meanwhile, he writes, “China’s pain is mine.”

For the full review, see:
MELANIE KIRKPATRICK. “BOOKSHELF; Cultural Lexicon; People, leader, reading, revolution, disparity, copycat and bamboozle–some words that serve as a springboard for critiques of China.” The Wall Street Journal (Weds., December 7, 2011): A17.
(Note: ellipses added.)

The book under review is:
Yu, Hua. China in Ten Words. New York: Pantheon Books, 2011.

Even Krugman Worries that China Faces “Economic Crisis”

China’s economy is often touted as an exemplar of the success of government stimulus policies at promoting economic growth. So it is worth noting when a Nobel-Prize-winning international economist and advocate of government stimulus policies worries that in China:

(p. A25) . . . the bubble is bursting — and there are real reasons to fear financial and economic crisis.
. . .
I’ve been reluctant to weigh in on the Chinese situation, in part because it’s so hard to know what’s really happening. All economic statistics are best seen as a peculiarly boring form of science fiction, but China’s numbers are more fictional than most. I’d turn to real China experts for guidance, but no two experts seem to be telling the same story.

Still, even the official data are troubling — and recent news is sufficiently dramatic to ring alarm bells.
. . .
Real estate investment has roughly doubled as a share of G.D.P. since 2000, accounting directly for more than half of the overall rise in investment. And surely much of the rest of the increase was from firms expanding to sell to the burgeoning construction industry.
Do we actually know that real estate was a bubble? It exhibited all the signs: not just rising prices, but also the kind of speculative fever all too familiar from our own experiences just a few years back — think coastal Florida.
. . .
For what it’s worth, statements about economic policy from Chinese officials don’t strike me as being especially clear-headed. In particular, the way China has been lashing out at foreigners — among other things, imposing a punitive tariff on imports of U.S.-made autos that will do nothing to help its economy but will help poison trade relations — does not sound like a mature government that knows what it’s doing.
And anecdotal evidence suggests that while China’s government may not be constrained by rule of law, it is constrained by pervasive corruption, which means that what actually happens at the local level may bear little resemblance to what is ordered in Beijing.

For the full commentary, see:
PAUL KRUGMAN. “Will China Break?” The New York Times (Mon., December 19, 2011): A25.
(Note: ellipses added.)
(Note: the online version of the story is dated December 18, 2011.)

Gary Becker Says “Economics Trumps Culture”

At the Chicago American Economic Association (AEA) meetings, I attended an 8 AM session on Sun., Jan. 8, 2012 in honor of the 30 anniversary of Gary Becker’s Treatise on the Family. At the end of the session, Becker discussed five issues related to the book.
One of these was the question of whether the features of the family are best understood on the basis of economic issues or cultural issues. He mentioned two examples: the Irish family and the Asian family. In the past it had been claimed that the Irish family would have enduring features due to religion and culture, features such as many children and women who stayed at home. Today, Becker noted, the Irish family looks much like other European families. He then paraphrased Singapore’s former ruler Lee Kuan Yew as having claimed in the past that the Asian family is superior to the Western family in its cohesiveness and loyalty. Today, Becker noted, Asian families look much more like Western families. Becker concluded that in the short run cultural factors may dominate, but that in the long run economic factors dominate. He said “Economics trumps culture.”
Becker’s discussion has broader relevance. One of the issues that I am grappling with in my research and teaching is the extent to which success at entrepreneurial innovation depends on cultural differences and the extent to which it depends on differences in constraints and policies.
If policies matter more, then it is easier to see a clear path toward progress, than if murkier cultural issues matter more.