One more from the Bridge Blogger:

Lately I have received by email these pictures that are widely circulating on the Spanish speaking internet. They apparently originated in Colombia, so they are referred by some as Colombianadas.

Colombianadas are the Latin American equivalent of Chinglish: signs and other pieces of writing with a twist of unintended humour. What makes Colombianadas even more amazing is that they are written by people using their own mother tongue!

Chinese toilet keepers and sign translators: you better get moving fast,  watch more Marx brothers movies or revert to using older dictionaries. A whole new continent of talent is on the rise, and your monopoly of world sign humour is going to be seriously challenged.

Someone needs to open a website urgently to collect these gems:

Sexshop and Seafood / Ladies with O please do not use swimming pool / No urinating, fine: machete/ Cold ice available / We paint houses, home delivery service/ Carrefour Supermarket

Now that inflation seems under control, unemployment has been identified by most as the real threat to Chinese stability in 2009. The risk of massive layoffs and social unrest is so obvious that you hardly need an economist to identify it. My blue taxi driver was telling me about it only a minute ago.

In the media and the specialized blogosphere we’ve seen many articles lately discussing the problem of closing factories. Mostly wondering how bad the situation really is, or how the government will be able to deal with it. Interestingly, opinions come in waves, one week exaggerating the damage, the week after dismissing it as seasonal closings.

Which just comes to show that, in times of crisis, bloggers and economists are all equally clueless.

The World Bank, Economists and Chinese Characteristics

The other day I commented the latest World Bank Quarterly Report, and I raised the issue that it does not take into account some obvious non-economic factors. Today, after reading the latest post on All Roads I went back to the WB report and performed a search for “unemployment”.

The number of results for this search in the 23 pages report is: 0.

Fair enough, there are 5 instances of “employment” (think positive), but most of them are explaining how the Magic Stimulus Plan is going to solve all the problems. The more I read it, the more I see this Report as loaded with Chinese Characteristics. It has been done in Beijing, by a mostly Chinese team… and like I said, it carries a highly suspicious 7.5% projection.

In spite of this, the WB report is an informative read, and one can hardly be surprised that an international institution tries to avoid conflict with one of its member governments. But what I did find quite surprising is that econoblogger Brad Setser’s analysis of the report doesn’t even mention unemployment either.

This is what made me think that we are going to need something more than economists if we want to see clear in the China 2009 scene.

Recommended Reads for the Fall

So, with all due respect, I have to desagree with Mr. Setser’s advice: If you only read one thing on China this Autumn, do NOT read the World Bank Report.

But then, what to read? Who knows really what’s going on in China?

Let’s analyze the root of the problem: China is not a transparent System. Even worse, unlike other non-transparent countries that we are used to deal with, China is a highly influential country. And it is in a position to not only hide the facts behind a painted veil, but also actively manipulate information and have hundreds of experts around the world scratching their heads.

So the answer to the question “Who knows China?” is:  A bunch of old men that are sitting in Zhongnanhai.

Now, forget your google, you will not find the Politburo Standing Comitee Blog, they will not take your phone calls to arrange an interview or explain their actions.

But what they actually DO every day is leave lots of traces, from the articles on the Chinese press to their announcements in economic policy. And these traces we can track down to the real intentions and the real information that they’re handling.  So it is by reading between the lines of People’s Daily, Xinhua and the likes that you can get a clue of what is going on here.

In conclusion, to understand China, economics is not enough: we also need politics.

Political Economics

So if you are only going to read one thing on China, I suggest you look for a political economist.  For example the blog of Victor Sish, which I discovered recently. He is a professor of political science at Northwestern University specializing in Chinese politics, and he also writes on Nourini’s monitor. He has a keen eye for interpreting the news from a Chinese government perspective. Don’t miss his last post on unemployment. For my part, I’m adding him to my Roll.

In fact, I am opening a new section on my Blogroll for Chinese politics and economy, and I would be grateful if you can recommend some other Crisis Watching sites, in English or Chinese. I am looking for sites that focus on making sense of the Chinese government’s moves.

Any more missing Links? Tips welcome. Thanks.

Picture credit: The shade of Zhongnanhai by Zhongnanhai 10毫克.

Today was a pretty stressful day in the office, but in between meetings I was able to join a lively discussion on the Fool’s Mountain about the latest Dalai incident.

To wit, the French President said he will meet the DL in Poland during a ceremony in honour of Lech Walesa. China immediately threatened EU with cancelling the 11th EU-China Summit this week, and has indeed cancelled it. BBC tells it here. Also see the reaction of Chinese netizens to Pomfret’s article and the account of Xinhua.

Here are my thoughts as posted on the Mountain (minus rants and comebacks):

Is China using France?

Is China using France strategically, as a wedge to divide EU, following the classic “divide and win” from SunTzu’s Art of War?

Could be, but this is nothing new, all the world powers use this old trick when negotiating with EU. The fact is China will listen or not to EU representatives depending on the power it perceives they have, and depending on China’s own interests. For economic aspects such as tariffs, EU does have power and will be listened. In other fields it can be completely ignored. Points to keep in mind:

1- The EU has a problem with unity, and this has nothing to do with China’s policies.

2- China has a problem to deal with DL, and this has nothing to do with the Sarko meeting.

3- Universal Rule in International Relations: If you need to distract attention bash the French.

4- DL is not a terrorist. Comparing him to bin Laden is low and slanderous.

5- China is crying for nothing: In Europe anyone could speak with the equivalent of DL.

For example, the president of the Basque Country (who actively demands independence from Spain) has met up with authorities of many countries and sends representatives regularly to support Basque industry in Shanghai. No whining from Spain, why? because unlike bin Laden, he does NOT support violence.

What are the consequences of this incident? And the real Reasons?

In fact, there shouldn’t be any serious practical consequence of missing this Summit. The real meeting is the one that will happen in April when the G20 + Obama meet to speak of the Crisis.

This little conflict with the French is just a classic IR trick to create some noise. Perhaps Zhongnanhai have decided that it’s time to rally the people in advance of the social shocks of the Crisis. Or perhaps they are preparing the way for a conflictive period in foreign affairs when China tries to implement protectionist/low RMB policies, strongly opposed by the West.

Chinese leaders are well known for thinking one step ahead. Hopefully I am wrong with this one.

Please comment. No swearwords.

These last years we’ve seen many of the big newspapers scanning and digitizing their historic archives, and sometimes even allowing full access to non-subscriptors. Such is the case of the NYT, Atlantic Monthly, Guardian and many others. These archives constitute great tools for research, and provide irresistible eye candy for history nerds like Uln.

But thanks to Spanish blog Chinochano I found yesterday the new archives of La Vanguardia, the newspaper that was my daily read during my 3 years in Barcelona. The difference with other archives is that the interface looks much better, it shows the scanned articles, AND it comes with a cool graph showing the incidence of the search word over the years since 1881. This is in itself a fantastic tool for bloggy research:

The search for “China” gives the following graph:

Number of entries in paper issues containing "China"

Here we can see the rise of China in the European press. It is interesting to see the sudden lack of interest in some periods, for example when Hitler was invading Poland, or when the dotcoms crisis set all the eyes looking to Silicon Valley around 2000. The sudden peaks also make for a good guessing game. Especially interesting to see is the sharp rise from 2000 to 2008, which matches the observations of many China analysts, like Mark Leonard.

2008 is still not over but I’m betting it will beat 2007 by a fair stretch.

Re La Vanguardia: It is a mainstream catalan newspaper that has in my opinion the best Foreign Affairs section in Spain. If you speak Spanish don’t miss “Diario de Pekin”, the blog of La Vanguardia correspondent Rafael Poch in China. His articles are entertaining and he has an original point of view on Chinese affairs. Unfortunately Rafael is leaving China now after 6 years so we’ll have to wait and see if he gets a worthy successor.

PS: Now I have really earned the title of BRIDGE blogger !

The other day it was too cold to get my Linder started, so I had to go and flag a cab instead. I got one of the green chubby ones.

Green cabs are well known for being stubborn, having a true passion for History and polishing their nails 5 times a day. Remember: never never sit in a green cab during the morning rush hour.

Conversation between me and the GReeN Taxi:

ULN – Hello. Please take me to Yueyanglu.
GRN – Yuyuanlu?
ULN – Of course.

<… flag pull and commercial …>

GRN – Your Chinese is Amazing! <..lah-didah..> hm, what’s your country?
ULN – I’m from Spain.
GRN – Barcelona-Real Madrid-Ronaldinho: Good football!
ULN – <?> And don’t forget bullfighting.
GRN – Ahahaha! Yes, yes, Spain has bulfighting!!!
ULN – You saw it before?
GRN – On television..
ULN – Hm.

<… swerve, honk at cyclist …>

GRN – What else does Spain do?
ULN – What?!?
GRN – In History. What is famous of Spanish history?
ULN – Ah. Er… Spain… discovered America?
GRN – Haha, You mean that Spain WAS discovered by America.
ULN – No, no. I mean Spain discovered America. Sort of…
GRN – Ha! Spain is a very little country.
ULN – It is if you compare it with China.
GRN – You know, you shouldn’t always believe what your government says
ULN – ?

<.. ! ..>

Yesterday I read the World Bank’s Quarterly Update on China. It is the report where they forecast the 7.5% annual growth for 2009.

First of all, I should thank chinalawblog for showing me the way to it, and also the World Bank itself for doing a very useful report that can be understood by dummies. This makes sense too, since we are paying for it through our taxes.

There has been some discussion on the net about the last 7.5% forecast given by the World Bank. The subject is so hot, and China is so overpopulated by pundits that any kind of statement about the economy can easily get you in trouble.

That was the case of China Herald publishing an 8.94% forecast. It was obviously a joke, but in the heat of the moment it was misunderstood by some readers. The actual message was simple: after many years seeing many crisis forecasted for China, Fons has learnt to be skeptical. Experience makes as good a prediction as anything these days, so at CYR the point is well noted.

Now, back to the WB report. This might sound obvious to many people, but it is just as well to say it: to issue a deterministic prediction of economic developments in China 1 year ahead is only second in difficulty to predicting next’s year weather. Just to give a little insight, the forecast for 2009 is based on dozens of graphs like the one below, where particular aspects of the economy are projected into the future. A single one of these factors that deviates from the projection can completely change the whole picture.

But the comment above could apply to any economic forecast. For the China report in particular we can add the following important points:

• It assumes that the Chinese government will continue to make good choices in fiscal and monetary policy, as it has done up to now.
• It assumes that Chinese authorities are transparent, and that they do what they announce. For example, implement the mysterious land reform announced last October, or the famous list of 10 points for the stimulus plan.
• It assumes no big change in non-economic variables, such as social and political impact of the crisis, i.e. unemployment, social unrest, rise of nationalism and protectionism,  etc.

In the end, a 7.5% or even a 6% during 2009 is only a little break in the race, and in itself is not at all catastrophic. In fact it can be positive for China to allow her to implement the much needed “rebalancing” policies, as David Dollar explains here.

But the question that remains is not whether the growth will be 6, 8 or 9. The question is whether China’s government is clever and flexible enough to adapt to the new situations that will arise, and whether the delicate social and political balance that has been working in China for the last 30 years will resist the impact of a global crisis. Or, as I like to say and link in all my posts, whether the Wall will resist.