Wow, there’s been some activity around here this week. It is exhausting to be in the limelight, and I long to get back my status of internet chopped liver.

But no worries, I think I know just how to do that:

Make up your mind: N.1 or N.2?

Everybody knows that serious China bloggers don’t do Chinglish. That’s for newbies, and we are past the “mamma, look what I got” stage. But before you leave, take a look at this a pic I took yesterday on my way to Ningbo . It is now part of my new classified collection of Signology. And there’s more here than meets the eye. Click to continue »

Ever since I opened this blog the problem of credibility has been in the back of my mind. These days, the comments of a tenacious part-time troll, as well as some recent events that shook the Chinosphere have brought back the subject to the top of my agenda.

It is well known that Chinablogs* (defined as blogs about China in English) are only a tiny part of the Chinese internet, and their readership is insignificant compared to their Chinese counterparts. But it would be a mistake to dismiss them as irrelevant. For some time already, especially after last year’s  events – Tibet revolts and the Olympic torch saga were a turning point -  readers from all sides have questioned the media’s impartiality regarding Chinese politics. Just or not, the fact is that these accusations have cast a doubt, and many have turned to blogs to try to find an independent point of view.

Some things make me suspect that the influence of Chinablogs in shaping the World opinion about China is more significant than their size might suggest. The famous #cde affair, where a well known entrepreneur and blogger in China caused the RMB/dollar exchange to move after a post on his blog, forcing the Chinese government to issue an official notice, confirmed this idea. Also, the world media are sending some of their best writers to China, not to become correspondents as used to be the case, but to open a blog and speak about what they  see outside their window – among other things.  Blog sceptics might want to look at this Boston Globe article to see just how influential blogs can become.

And here is where my question comes in: what legitimates  Chinabloggers to give opinions about this country, its politics, economy and other fields that affect the well being of billions of people?  Where does our credibility lie? Are we misrepresenting ourselves as experts in China without any serious basis? Click to continue »

Today I am starting my review section with one of the books on Chinese economy that has impressed me most in the last year, “Capitalism with Chinese characteristics”, by MIT professor Huang Yasheng. It is a book that clearly stands out from the recent China books, and it might be destined to become one of the big references in the field.

There is no shortage of good China books in the last years. Many are written from a business perspective, by people with first hand experience who will tell you exactly how things are done here. Others look at the available economic data and build interesting theories to explain them. Few go deeper than this, to look into the heart of the matter: the politics behind the Chinese economy.

The problem is:  it is so difficult to obtain reliable information on Chinese policy that most efforts in this field turn into circular arguments over the same limited data. Professor Huang breaks the circle by going back to the sources and questioning directly all the mainstream assumptions, leaving many of them upside down. The situation in China requires this approach, as he says in the preface:

In studies of American economy, scholars may debate about the effects of, say, “Reagan tax cuts”. In studies of the Chinese economy, the more relevant question would be, “Did the government cut taxes in the first place?

By going back to the archives of what, in his own words is “some of the world’s most medieval record keeping”, Huang Yasheng is able to come up with a whole new picture of Chinese economic policy in the last three decades. This book is the result of painstaking archival research into rarely examined files, such as a “22 volumes compilation of internal bank documents” or the archives of the Ministry of Agriculture.

A qualitative leap from the classic tea leave reading, and one that deserves some careful consideration, even if the conclusions drawn will not be to the taste of every reader. Click to continue »

More bad news about the Crisis. Yesterday All Roads had another of those worrying posts: 3 Announcements and 2 Rumours, and not one of them good.

Still, on our return from the double New Year’s season, many of us are suprised to see the sky is not falling on our heads, and the dire predictions we did before the holidays have not quite turned true. Indeed, the Crisis in China seems to have a very annoying quality for bloggers: it is not happening. Yes, we’ve had bad news coming every week for the last months, we’ve seen experts we respect telling us how bad the unemployment is, how many factories are closing. And all of them are right, if we look at the numbers. Yet, on the street, no Crisis to be seen.

What is going on here? Who is taking our Crisis away, depriving the dismal scientists of their fair share of joy and fulfilment? And more importantly: is it not time to deem the whole affair a bluff, and go join the ranks of the optimistic, together with the guys at the World Bank and the CPC?

Where are all the Crises Gone, long time passing?

You might remember that post I wrote where I started out wondering about the different perceptions of the Crisis in China and in the West. 3 months have passed and this contrast is, if anything, sharper than before, as I have seen during my New Year’s travels. Right now Europe is bleeding, there is no question about this. China, on the other hand, looks to the casual observer like a normal, almost healthy economy. One cannot sense the Crisis.

In Shanghai, Zhejiang, Fujian, three of the engines of China’s economy, I have seen nothing going on but normal everyday life. The shops are full of people, “we hire” signs are on the windows, and taxi drivers remain for the most part optimistic – at least those who didn’t buy shares. One of them even told me: “Riots only happen in Guangdong, in Shanghai we are civilized”

Back to the office, in my work with industrial investors in China I see the same picture: while some Western clients have cancelled or postponed their 2009 FDI projects, not a single project has been stopped by our Chinese clients, which are all large SOEs.

The time’s for the Ox and don’t give me no Bull

Here are 3 reasons that might explain this strange gap between theory and observation: delay, transparency and inertia.

• Delayed effect: The crisis comes to China in a very different way than to the West. In our case it was a bursting financial bubble,  hitting us all with the speed of sound. In China, it is different. They didn’t have the “complex financial instruments”,  their financial system was relatively isolated. In China the Crisis is caused by exports and FDI, which is a far less explosive mix. Look at FDIs, for example: a typical project cycle to build a factory is 3 years, and there’s a point of no return somewhere in year 2, when the construction is mobilised and the equipment paid for. This introduces a long delay while the ongoing projects finish and until the absence of new projects cause panic in subcontractors. Same effect with the production of factories which had a large backlog in 08.

• Inertia: China is a massive system that has been moving at high speeds for 30 years. This doesn’t stop in one day. It is not only the phisical momentum of the thousands of ongoing projects, it is also psycological inertia. in the minds of many Chinese the system is strong, and there is no reason to believe in a Crisis that has never happened in their working lifetime. Behaviours do not reflect fear, and many go about their New Year’s shopping like any other year. Worse still, some seem happy to believe that it is America’s fault and this is an American Crisis; and mind you, not all agree that smart China need lend the old brother a hand.

• Transparency: This is the most important reason of the three, and the one that scares me most. For all the good things that one can say of CPC’s economic policy (yes, they did draw 300million out of poverty) there is one serious fault that nobody fails to notice: Lack of Transparency. With the largest part of the economy dominated by SOEs or following direct orders from the party, it is not unreasonable to think that there might be a bigger soup on the fire than we are led to believe.

I don’t want to cause alarm or instigate hoarding behaviours like that of our old professor, but this is not looking good. If there’s one single best way of making a Crisis more deadly, that is withholding information and letting it burst only when it is too late.

The two pillars of China’s growth in the 2000s were SOEs and FDIs. The FDI leg is seriously failing now, and the effects will be felt progressively. Even with all the financial might of the Chinese State, it is hard to imagine the SOEs taking the place left by the FDIs, let alone going out to take over the World. I cannot see the Chinese companies leading the effort, I can’t see their necessary creativity and initiative to open new markets to replace the lost export ones. All I can see is a bunch of Giant SOE’s which are better at leveraging their massive size and influence than at impressing us with their products.

There is something quite anomalous in this perceived calm of today, and this blogger thinks that he can smell a Rat. But the time is not for Rats anymore, it is for Ox.

Which is one 2 bits short of a Bull.

Today is the last of the Rat days. Happy 牛 Year to all! And byebye too, I won’t be around for the next few days: I’m off to where the weather suits my clothes, down to the charming shores of Southern Fujian.

I will take the chance before I pack up to write my little roundup of the Rat year, as today is also exactly the 3 month Anniversary of CHINAYOUREN. I want to write what these 3 months have meant for this blogger.  We are on holidays and the time is to relax, so I’ll do it in easy bullet points:

• Hailing from the primitive highlands of Western Europe, Uln is a very recent blogger, with an experience of 3 months writing blogs, and just 6 months reading or even knowing what a blog is.

• In these 3 Rat months I have discovered that blogging is not just weird psychotherapy. It is also a way to speak of ideas too brainy to be allowed in the pub, and actually get people listening. More suprisingly for me, you actually make friends.

• One of my main discoveries is that China bloggers are cool. Even the big ones that I thought inaccessible and Holy. All of them answer my emails and sometimes even share readers by linking to this my humble site. For the moment I haven’t encountered a single exception, thanks to all.

• Speaking of Links: I have to give special thanks to those that helped me get some readers: First, to China Law BLog and Global Voices, who linked me from my very first post. Then the Wall Street Journal blog, for bringing me record readership by linking me 3 times in a single week. And, third but not least, the Fool’s Mountain, who not only inspire me with their ever lively discussion, but also let me publish 2 articles and shamelessly promote my blog on their site.

• To be completely fair, I have to mention that Google are good to me, and in spite of my pointing my finger at them, I continue getting amazing results in their search engine. For SEO reasons that I’ll never understand I am Number One on strings such as Update President Obama. And what is fair is fair: I owe the same credit to the Chinese authorities who, in spite of my finger-pointing and irreverent writing, have yet to censor my content in any way.

• The most important of all: I seriously enjoy blogging. It is amazing that 200 people from the most diverse origins come into my website in a single day. I even enjoy it more when someone leaves a comment, so please make my day and leave yours below.

• Finally, my Bloggy Resolutions for the 牛 Year:  Write shorter posts, write better English and speak better Chinese, enjoy China online and offline.

So let’s go one more time say with me: Happy 牛 Year to all !

I can’t wait to see the speech tonight. I have spent the whole midday lunch hour (and a bit more) tinkering with the NYT and others speech analysis sites. I have learnt more about the speeches of previous American presidents that I ever knew before. And in particular I have learnt one surprising detail.

Those who have been following this blog from the beginning might remember that initial article I wrote about the Crisis and the Great Wall of China, which was published/linked by a few of the big guys and helped put my English blog in orbit. Well, that post contained the old gag of Crisis and Opportunity -both words sharing one character in Chinese- which was at the core of its reasoning.

The detail I found with some embarrassment today is that this is a widely used rhetorical device in American politics, probably first included by JFK in a few of his speeches. Of course I never pretended I’d invented it myself,  I guess I just heard it somewhere, but I had no clue it was so well known. Following my internet search for the origin of the expression, I ended up in a very popular blog which is an authority in Language use, the Language Log. There I read that my wordplay was just is “a misperception”:  危机 (weiji) doesn’t really originate from “Dangerous opportunity”. Etymologically, that is.

I don’t mind some experts contesting the origin of the expression. Actually I hold my own opinion that, even if the strict etymology of the word is not “dangerous opportunity”, it is obvious to all Chinese that the character 机 of Crisis is part of the very common word 机会 (opportunity). Knowing how Chinese love playing with their language, it is certain that millions of times this parallel Crisis-Opportunity must have been drawn in China. A more interesting question is to know if this expression actually describes the Chinese character, which I hope is properly settled in that old post of mine.

But what I do find a bit embarrassing is to realize that half the World was already aware of my little Chinese wordplay that I thought so clever. To the point that even Homer Simpson knew:

Lisa:  Look on the bright side, Dad. Did you know that the Chinese use
       the same word for "crisis" as they do for "opportunity"?
Homer: Yes! Cris-atunity.

From chapter "fear of flying", 1994

And now, back to the Inaugural speech. I have to be off in a minute to our own inaugural party in Shanghai, but let me briefly comment that there is a slight chance that the Crisis-Opportunity gag will make it into the speech. After all, the time is exactly right, the Crisis is there, China as well, and many are speculating that Obama might echo Kennedy’s famous speeches.

Although, to tell you the truth, I very much doubt it. Obama is a better speaker than that, and beyond those old formulas. I am sure he is going to coin something big instead, one of those phrases that tomorrow people will be muttering in the office, and which for generations to come will be copied by lesser speechwriters (and bloggers) in search of inspiration…

Let’s see what happens.

Some strange things happening in this blog:

Post unpunned?

It is hard to resist when you are writing a post and you see the chance to put in one of your puns, but lately I’ve been pretty good at it. It’s been more than a month, for example, that I don’t refer to the Leadership of the PRC with the sentence: “Who and when attended the conference?”.

I say this because I just noticed the opposite case in yesterday’s post: a good gag appeared unnoticed and now risks to seriously embarrass me, as it involves – again- a leader of the People’s Republic. If you remember, I was telling you about Wen Jiabao’s predictions getting a good kick in the family jewels. Only now I realize that Wen’s first name actually, literally, means: Family jewels. Man, I love this Premier more every day.

I don’t believe in self-censoring, so I won’t have it unpunned. For now.

.

Meet the activist Uln Win

I don’t hide that I was pleased when my trackback indicator told me I had been linked by no less than the Telegraph – well, OK, from one of its blogs.  When I went to look at the article, I found this:

The Chinese blogger Uln Win has reprinted the core principles, together with some analysis, on her site.   [...]  Uln Win makes the point that while the charter originated within mainland China and its signatories are all from within the country, she remains concerned that the vast majority of people in the country remain wholly unaware of it…

Extraordinary! Not only I am a girl now, but I am also Chinese and I am called Uln Win. Let’s go by parts:

1- The change of sex: I kind of fancied I had a virile writing style, obviously I was wrong. I can’t blame him  on this one though, it is true that my profile is not clear in this respect.

2- The Chinese nationality: Funny. The first sentence in my profile famously is: “This blog is written by ULN, a foreigner happily living in Shanghai”.

3- The code name “Uln Win”: This has to get the top prize. I just can’t imagine where he got it from, there is not an instance on the internet of such a name. My guess is he wanted a powerful name for his female Chinese hero, and he added the “Win” as a sure winner! I can’t wait to read his next post, will Uln Win rescue Liu Xiaobo from the claws of the regime?

Well, this explains why my statistics give so many visits of less than one minute, that’s what I call skimming a blog. I suppose it is the excess of information we all bloggers suffer. To be fair, it looks like at least he read the post, which, I suppose, is what matters.

You know how Wen Jia Bao asked us this week to have “faith and determination“, and added that the “nation will be the first to recover” from the crisis and grasp the opportunities available. Then come the experts of the World Economic Forum, who are getting ready for their yearly skiing holiday, and they publish a prediction right on their front page:

Global Risks 2009: a new report from the World Economic Forum, identifies a deteriorating global economy, a hard landing in China…

In the report , which you can download here, they go on to speak of China 09 GDP of “6% or below”, a point which the international media is quick to report. How’s that for the confidence. Ouch, one 2 good points below the waistline of the CPC’s 8% , and right in the family jewels.

Mind you, I am not writing this to pick on Wen’s predictions. First of all, the WEF’s report is only making hypothesis, to see their possible impact on the World economy. Second, I think Wen would be as likely to get it right for China’s economy as the gurus of the WEF. After all, the CPC prepares its predictions with the advantage of insider information, and it suffers less distractions than the vedettes at the Convention of Dismalness.

On the other hand, it is a long time already since the Forum passed the heigh of its influence and it looks this year more irrelevant than ever. In the end, the important decisions for the World economy will be taken by Obama’s team and the CPC, and it is unclear how either of them will listen to the WEF. Most importantly, the role of the Forum as a brainstorming event has largely been taken over by the econobloggers, as we saw in this fascinating article you might remember from last month.

Inexplicably, we have not been invited to Davos this time, so we’ll hit the road in Shanghai instead and see how the faith and determination is doing, and whether there are signs of  faltering in the good old Shanghai shopping spirit. A big part of China’s economic Wall is made of the faith of its consumers, who are the ones supposed to make up for the lack of exports. Here’s how they are faring in Shanghai:

Nanjinglu: The usual mobs of shoppers and sellers in spite of the biting cold.

Xujiahui: It is difficult to walk the Street, the shops are as full as ever and the official sign on the Bridge reads: “Do Well Your Economic Survey, capture the situation and the strengths of the District, and promote the development of XuHui.” This district is also undergoing an economic survey, like the one done by these funny villagers, but hopefully using more standard statistical methods.

Sitting 牛: Hordes of consumers worship the goddess of consumption, the Sitting Cow.

We Hire – I got this last night right next to my place. I haven’t been keeping track of the changes these last weeks, but all I can say is that we still see many signs like this. The red character means: We hire.  1200RMB a month plus extras. Searched: waiters, shop manager, dish cleaners, etc.

So there you go, in Shanghai, in spite of some people getting worried and a few foreign startups having a hard time to meet ends, it looks like the F and D are still holding stong. Let’s hope they stay right up there throughout 2009, and we might avert this one of the Global Risks.

I got a bit excited last night with my new VPN connection. For a few hours I thought I’d found Democracy in a Box, neatly packaged in a 40$ yearly subscription. I have been since exploring new horizons.

Today, second day using VPN I’ve had 2 surprises, one good and one bad:

• The good one was to discover that I could finally connect to the Time China Blog.

• The bad one was the first article I read in this excellent blog, containing the paragraph:

Today a prominent mainland blog site, bullog.cn, was blocked, which may also be connected to Chrter 08. A few of the liberal outlet’s bloggers wrote about the document, and at least four signed it. I spoke briefly with Bullog founder Luo Yonghao this afternoon. He said he wasn’t sure why the site was blocked, and wouldn’t speculate on a Chrter 08 connection. C.A. Yeung of the Under the Jacaranda Tree blog noted in December that Bullog had dropped two of its bloggers, apparently for writing about Chrter 08.

Which means that now I cannot connect anymore to the blogs of Anti and Lianyue, where I used to spend many a nerdy hour trying to decipher their mandarin.

As you see there is a more than possible connection with the Chrter 08. The repression of the Charter movement seems to be gaining momentum as the weeks pass, proving that the government is taking it as a serious menace.  This is sad in itself, but there is even worse.

First of all, I want to clarify one point, lest someone misunderstands Ramzy’s article. Normally when we say a site has been “blocked” in China, what happens is that the site continues operating but it is just not accessible from the mainland due to the censors’ Firewall. This is not the case now, the site has been completely closed down. VPNs, proxies or any other other gadget will not get it open for you anymore.

And this makes me think: How can the Chinese authorities be so disrespectful with their citizens? I mean, even supposing they were right to suppress the Charter. There are millions of Chinese that go into that website every day and run blogs, exchange comments, make friends, speak of anything else but politics. These officials think nothing of closing all the blogs down, and I wouldn’t be surprised if they didn’t even give bloggers the time to save their archives (mental note: backup daily, Nanny might show up tomorrow!)

This is not only a political problem. This is a basic problem of decency and respect for the citizenry. Let’s hope at least that, like Figaro said, repression will only make the Charter more prominent, and it will allow all the affected Chinese to open their eyes and see how their harmonious government really cares about them. And perhaps some day those same officials will have to regret this.

Nay, never laugh faster than China laughs.

As I am writing this entry, 2008 has finished in China. Fortunately, we still have a few hours in Home Country to fit in my last 08 post before the evening aperitif. I take the chance to get back in action after this week’s holidays and do my little roundup of 2008.

It has been a good year to blog China. The Chinese have continued to amaze the World with their constant source of news. Successes, catastrophes, change; we’ve had our fair share in 2008. And everything seems to indicate that 09 will be every bit as bloggable. So stay tuned, China is still changing us, and I hope to be there to witness it next year too.

And now down to the hard numbers. I won’t go over the main events of 08, as more diligent bloggers have already done it while I slept. Instead, I just include below the latest results of my own  Chinanews-meter:

In case you haven’t been following, this chart shows the number of articles containing “China” over the last 128 years (from LaVanguardia). As I predicted a month ago, 2008 has beaten 2007 by one length. Bets are open for 2009, and my money is on the rise of China news. In spite of the crisis and Obama’s tough competition in the West, I am going for the 5,000 mark.

Ah, Christmas is a great time to be back home, but I’m missing China already. And if I believe my cell phone, China must be missing me too: There’s dozens of sms in characters coming in this week, offering Christmas wishes, readily made poems and quick no-questions-asked credit at 3% a month. I even received one unexpected proposal that filled my heart with joy: “Marry Christmas”. Thanks all for remembering me.

To the readers that have come into my garden these last days and found it deserted I dedicate this picture I took yesterday of The Shire. This is what I have been doing when I was not answering comments on the blog:

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.

One of the advantages of Crisis Watching in China is that there’s such a large community of observers dedicated to this country that you are never short of ideas. The downside is that with so many voices it is difficult to make sense of the whole thing. To the question in the title, for example, depending where you look you can find today the whole range of answers: yes, no, badly, take it easy!

What is most remarkable is how fast opinion is shifting towards the Yes side, when only 2 months ago most people still believed China’s system was immune to Financial Crises.

Especially interesting is the story of the closing factories on the Pearl River Delta, which has captured the imagination of western media in the past few days. Fortunately we have some sensible China bloggers to shed light on this mess. The guys at All Roads and the Law Blog are the first to question the significance of the events.

Factories are closing sure enough, and this picture I stole from the bbc website is not an evil western media setup. But take a closer look: do you see any difference between this “workshop” and any random car parking? Do you see any traces of heavy fixed equipment, hoisting devices, utilities? anything looking like proper working lights for the operators? It looks exactly like what it is, a precarious facility quickly improvised to catch some coming contract and quick to disappear the minute things start to look bad. It is probably in places like these that they put together the fakes sold at Qipulu.

So it is mostly the fat of the economy that is being lost for the moment. Business which probably would end up closing anyway in a normal economic system that didn’t have as many holes as the Chinese. The bread and meat of the economy are still producing, and doing quite well given the circumstances. The disappearing of these companies will make things easier for the ones remaining, eliminating the pressure of their (sometimes unfair) competition. It’s part of the good effects of a downcycle, really overdue in an economy that’s been racing nonstop for the last 30 years.

So from my point of view the Crisis has still not hit China in any significant way. The international economic slowdown is definitely starting to show, but for the moment we are still riding it better than most of the Western economies.The Wall is holding strong.

Now, what Crisis really means is what by now is in everybody’s mind. The New Republic calls it Crash and Burn. But many observers around the world got excited about the recent protests in the Delta, and failed to realize that those protests are essentially no different from the many other Crack and Burns that happen daily in China. If it is not a taxi strike, it is a drowned kid or citizens unhappy with relocations.  Each of them for their own reason, and usually with no intention to question the role of the central government, but rather trying to call its attention to help against local injustice.

Crack and Burn we have had for years, and it didn’t do much to unstabilize the system, because it was never meant to anyway.

But here is a method to estimate what might happen if some day the Crisis really hits China:

1. Google “Riots China”
2. Collect the first different 50 results
3. Add up the number of people violently protesting in those results
4. Add the thousands of people that are going to lose (or not find) jobs in the year to come.
5. To that reactive core you can add hundreds of millions of unhappy peasants, too isolated to organize protests on their own, but happy to ride along if there is any serious movement.
6. Now all those millions of chinese  put them together at the same time to protest against the same problem. Typically inflation, unemployment, corruption, injustice or inequality.

When there is a critical mass of unemployed and discontent rioting in a particular region, this could spark the chain reaction and spread to the whole country like gunpowder.

Looking at the economy today, I think we are still far from that situation. On the other hand, I also think that, if it ever happens, it will happen so suddenly that none of us will even smell it coming.