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In a front page article on October 20, 2010, the New York Times reported on how the Chinese government encouraged a real estate investment binge that has resulted in a growing number of empty, speculatively built ghost cities. Now the video media has picked up the story in the well-done story linked to above and cited below.
Source of book image: http://www.wellesley.edu/Polisci/wj/chinesepolitics/chang-halliday_files/changUS.jpg
(p. 11) After Mao comes to power, Chang and Halliday show him continuing his thuggery. This is more familiar ground, but still there are revelations. Mao used the Korean War as a chance to slaughter former Nationalist soldiers. And Mao says some remarkable things about the peasants he was supposed to be championing. When they were starving in the 1950’s, he instructed: “Educate peasants to eat less, and have more thin gruel. The State should try its hardest . . . to prevent peasants eating too much.” In Moscow, he offered to sacrifice the lives of 300 million Chinese, half the population at the time, and in 1958 he blithely declared of the overworked population: “Working like this, with all these projects, half of China may well have to die.”
At times, Mao seems nuts. He toyed with getting rid of people’s names and replacing them with numbers. And discussing the possible destruction of the earth with nuclear weapons, he mused that “this might be a big thing for the solar system, but it would still be an insignificant matter as far as the universe as a whole is concerned.”
Chang and Halliday recount how the Great Leap Forward led to the worst famine in world history in the late 1950’s and early 1960’s, and how in 1966 Mao clawed his way back to supreme power in the chaos of the Cultural Revolution. Some of the most fascinating material involves Zhou Enlai, the longtime prime minister, who comes across as a complete toady of Mao, even though Mao tormented him by forcing him to make self-criticisms and by seating him in third-rate seats during meetings. In the mid-1970’s, Zhou was suffering from cancer and yet Mao refused to allow him to get treatment – wanting Zhou to be the one to die first. “Operations are ruled out for now” for Zhou, Mao declared on May 9, 1974. “Absolutely no room for argument.” And so, sure enough, Zhou died in early 1976, and Mao in September that year.
This is an extraordinary portrait of a monster, who the authors say was responsible for more than 70 million deaths.
For the full review, see:
NICHOLAS D. KRISTOF. “The Real Mao.” The New York Times Book Review (Sun., October 23, 2005): 22.
(Note: ellipsis in original.)
(Norte: the online version of the review has the title “‘Mao’: The Real Mao.”)
Book reviewed:
Chang, Jung , and Jon Halliday. Mao: The Unknown Story. New York: Knopf, 2005.
(p. 262) As with Tudor England, government monopoly of patronage meant control. Virtually all copies of the seventeenth–century Chinese encyclopedia, the T’ien Kung K’ai-wu or Exploitation of the Works of Nature, which included illustrations of everything from hydraulics to metallurgy, were destroyed because, according to Joseph Needham, much of the material touched on industries that had been granted monopoly status by the Qing emperors: “The absence of political competition did not mean that technological progress could not take place, but it did mean that one decision-(p. 263)maker [i.e. the Emperor] could deal it a mortal blow.” It is therefore no surprise that a high percentage of both the inventions and inventors we associate with China from the time of the Han Dynasty to the Qings were government sponsored and employed.
Another liability of a strong central government is that it is, well, strong. Europe’s fragmented system of sovereign states made it possible for innovative minds such as Paracelsus, Leibniz. Rousseau, and Voltaire to “shop” for more congenial places whenever they skated too close to heretical or otherwise challenging notions; in China, one had to travel a thousand miles to a place where the empire’s writ ran not.
Source:
Rosen, William. The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention. New York: Random House, 2010.
(Note: italics and bracketed words in original.)
“Farmer Yu Feng tends his stockpile of roughly 7,700 pounds of cotton that he is storing in his home in Huji, China.” Source of caption and photo: online version of the WSJ article quoted and cited below.
In my Micro Principles classes I explain some of the variables that shift demand curves and some of the variables that shift supply curves. Supply curves, for instance, can be shifted by a change in the expectations of future prices. So, if suppliers come to expect that prices will go up in the future, that will shift the supply curve today to the left.
When I saw the photo above, I thought it was a wonderful illustration of the point.
(p. B1) Yu Lianmin, a cotton farmer in Huji, China, harvested 6,600 pounds of cotton this year. Despite record cotton prices, he didn’t sell any of it.
Instead, mounds of cotton are piled up in two empty rooms of Mr. Yu’s home, and the homes of many of the farmers in his small township of Yujia, which is part of the bigger township of Huji in northern Shandong province, 220 miles southeast of Beijing.
. . .
“I think there’s still hope for prices to go higher,” he said.
. . .
Expectations that prices will rise are driving the apparent stockpiling, . . .
For the full story, see:
CAROLYN CUI. “Chinese Take a Cotton to Hoarding.” The Wall Street Journal (Sat., January 29, 2011): B1 & B11.
(Note: ellipses added.)
“Enterprising residents of Hetaocun sold food to stranded travelers at a markup.” Source of caption and photo: online version of the NYT article quoted and cited below.
(p. A7) HETAOCUN, China — Compared with some of the more spectacular recent traffic jams in China, among them a 60-mile snarl last summer that paralyzed a major artery outside Beijing for two weeks, the thousands of travelers who spent the night trapped on a snow-coated highway in southwest Guizhou Province on Monday did not even warrant a mention in the local news media.
. . .
Stranded drivers chain-smoked, stomped their feet against the chill and cursed the government for failing to come to their rescue. As the night wore on, fuel lines froze and cellphone batteries died.
The residents of Hetaocun, however, saw the unmoving necklace of taillights from their mountain village and got entrepreneurial. They roused children from their beds, loaded boxes of instant noodles into baskets and began hawking their staples to a captive clientele. The 500 percent markup did not appear to dent sales.
“It rarely snows here, so this is a good thing,” said Yi Zhonggui, 42, as he wove past stalled vehicles with his wife and 4-year-old daughter lugging thermoses of hot water.
As the supply of noodles ran low, residents began gathering up the walnuts that give the village its name. In between cries of “walnuts, walnuts,” salesmen like Chen Xianneng obliged the desperate with snippets of news from the front, even if the information was based on hearsay.
For the full story, see:
ANDREW JACOBS. “Hetaocun Journal; As Traffic Backs Up, Villagers See Opportunity.” The New York Times (Weds., JANUARY 19, 2011): A7.
(Note: ellipsis added.)
(Note: the online version of the article is dated January 18, 2011 and has the title “Hetaocun Journal; In China, Traffic Jam Benefits Enterprising Villagers.”)
Source of book image: http://media.wiley.com/product_data/coverImage300/63/04708258/0470825863.jpg
Red Capitalism is scheduled for release on February 15, 2011. I have not read it, but from early reports it would appear to be a credible account that updates and supports concerns about China’s economy expressed by David Smick (The World Is Curved) and others.
The reference is:
Walter, Carl E., and Fraser J. T. Howie. Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise. Hoboken, NJ: Wiley, 2011.
The Smick book mentioned, is:
Smick, David M. The World Is Curved: Hidden Dangers to the Global Economy. New York: Portfolio Hardcover, 2008.
Source of graph: online version of the WSJ article quoted and cited below.
(p. B1) . . . two academic researchers estimate that Apple Inc.’s iPhone–one of the best-selling U.S. technology products–actually added $1.9 billion to the U.S. trade deficit with China last year.
How is this possible? The researchers say traditional ways of measuring global trade produce the number but fail to reflect the complexities of global commerce where the design, manufacturing and assembly of products often involve several countries.
“A distorted picture” is the result, they say, one that exaggerates trade imbalances between nations.
Trade statistics in both countries consider the iPhone a Chinese export to the U.S., even though it is entirely designed and owned by a U.S. company, and is made largely of parts produced in several Asian and European countries. China’s contribution is the last step–assembling and shipping the phones.
So the entire $178.96 estimated wholesale cost of the shipped phone is credited to China, even though the value of the work performed by the Chinese workers at Hon Hai Precision Industry Co. accounts for just 3.6%, or $6.50, of the total, the researchers calculated in a report published this month.
For the full story, see:
ANDREW BATSON. “Not Really ‘Made in China’; The iPhone’s Complex Supply Chain Highlights Problems With Trade Statistics.” The Wall Street Journal (Thurs., December 16, 2010): B1 & B2.
(Note: ellipsis added.)
(Note: the online version of the article is dated DECEMBER 15, 2010nd that were not in the print version.)
The research report breaking down iPhone costs by country is:
Xing, Yuqing, and Neal Detert. “How the Iphone Widens the United States Trade Deficit with the People’s Republic of China.” ADBI Working Paper Series, no. 257, December 2010.
“The Facebook friendship map, created by Paul Butler.” Source of caption and map: online version of the WSJ article quoted and cited below.
(p. B7) The contrast between Facebook’s spreading global network of users and its effective absence from China is starkly illustrated by a map, produced by a Facebook intern and flagged on the Economist’s website earlier this month, that has lately become a point of fascination of the Chinese Internet.
Described by its creator Paul Butler as “a social graph of 500 million people,” the map represents the worldwide volume of Facebook friendships across geographic locations using lines of varying intensity. Butler’s methodology is interesting in its own right, but what appeared to most interest China’s netizens was how China appears on the map. Or, rather, how it doesn’t.
. . .
Since Facebook is blocked in China, the number Facebook friendship lines flowing in and out of the country is essentially negligible, making China almost impossible to see.”
For the full story, see:
Josh Chin. “Facebook Gets Back Into China (Sort of…).” The Wall Street Journal (Tues., December 21, 2010): B7.
(Note: ellipsis added.)
(Note: the online version of the article has the title “Facebook Gets Back Into China (Sort of…)” and includes paragraphs at the end that were not in the print version.)
Zheng He’s voyages of exploration were mentioned in a previous blog entry.
(p. C12) The real problem with contemporary China’s version of the Zheng He story is that it omits the ending. In the century after Zheng’s death in 1433, emperors cut back on shipbuilding and exploration. When private merchants replaced the old tribute trade, the central authorities banned those ships as well. Building a ship with more than two masts became a crime punishable by death. Going to sea in a multimasted ship, even to trade, was also forbidden. Zheng’s logs were hidden or destroyed, lest they encourage future expeditions. To the Confucians who controlled the court, writes Ms. Levathes, “a desire for contact with the outside world meant that China itself needed something from abroad and was therefore not strong and self-sufficient.”
Today’s globalized China has apparently abandoned that insular ideology. But it still clings to the centralized autocracy that could produce Zheng’s voyages in one generation only to destroy the technology and ambition they embodied in the next. It still officially celebrates “harmony” against the unruliness and competition that create sustained innovation. Its past would be more usable if it offered models of diversity and dissent or, at the very least, sanctuary from the all-or-nothing decisions of absolutist rule.
For the full commentary, see:
VIRGINIA POSTREL. “COMMERCE & CULTURE; Recovering China’s Past on Kenya’s Coast.” The Wall Street Journal (Sat., DECEMBER 4, 2010): C12.
“BYD Chairman Wang Chuanfu, left, at a celebration last month in Shenzhen city with Berkshire Hathaway’s Charles Munger, center, and Warren Buffett.” Source of caption and photo: online version of the WSJ article quoted and cited below.
(p. B3) BEIJING–China’s central government ordered BYD Co. to surrender land in a zoning dispute, a decision that is likely to slow the Chinese battery and auto maker’s push to expand in the nation’s growing auto market.
China’s Ministry of Land and Resources also hit BYD with a 2.95 million yuan ($442,000) fine, the ministry said on its website Wednesday. The ministry confiscated 121 acres of land in the central Chinese city of Xian, where BYD executives said the company has been building a car assembly plant. BYD had hoped to start production at the complex as early as next year.
The ministry said zoning for the land was “illegally adjusted” to industrial use from agricultural use but didn’t elaborate. The decision comes as some government officials have shown concern about excess capacity in the auto industry.
. . .
Mid American Energy Holdings Co., a unit of Warren Buffett’s Berkshire Hathaway Inc., owns 10% of BYD.
For the full story, see:
NORIHIKO SHIROUZU. “China Deals a Setback to BYD.” The Wall Street Journal (Thurs., OCTOBER 14, 2010): B3.
(Note: ellipsis added.)
(Note: the online version of the article has the title “Beijing Halts Construction of BYD Auto Plant.”)