From the post left unfinished last week. Some of the main arguments read (or heard) in China Crisis discussions:

The Time

Economies don’t grow indefinitely.  Low cycles follow high cycles and after 30 years it is about time. China cannot break the laws of economics, so the recession must necessarily come in the next X years. The country hasn’t prepared itself politically and psicologically to face this period. In the end, we are sure to have trouble.

Of course, this argument is of little value without the X, and many proponents of a time limit have failed in the past. This is the field of technical analysts and other mystical thinkers. Mythology also plays a role:  In Chinese history, cataclysms mark the end of a cycle. An earthquake preceded this crisis, and a solar eclipse is coming in July, the dynasty has lost its virtue. These arguments tend to work better with a bit of hindsight.

The Markets

The World’s economies are interdependent today. China’s economy is largely dependent on exports and FDI. The weight of these external factors in China’s growth has been much discussed, but regardless of the exact numbers, few doubt that it is a significant motor of the economy. External motors failing, China turns to internal ones: investment and consumption. Today, strong public investment, mostly in infrastructure and energy, is making up for the loss. Click to continue »

Some pictures of my recent travels in Shanxi & Shanxi. As with past editions, 5 words per picture.

The Shanxis have solid history Click to continue »

I am going to spice up my blog by providing some first hand opinion on my weekly tour of the Sinosphere. These are mostly comments that I’ve done previously in other forums and I collect here. I will try to do this every week, subject to the rate at which my brain can churn out opinions.

THE TAMADE STATUES - We have heard more than enough of those ugly statues that are clearly not worth the noise, so I will be brief. Here’s what the forums say.  On the West side: it’s a clever PR coup by the CPC;  on the East side: indignation, history, insults and record participation.  In the middle, the French, who are so used to being bashed by both Americans and Chinese for any possible reason that they don’t seem to mind  anymore.

I can understand the indignation of the Chinese public, these statues have come to symbolize the humiliation of the colonial times.  But I am sure that, regardless of the legal basis, the Chinese government could use some of its famous patience, diplomacy and political leverage to get those lumps of bronze safely back home were they belong. And, in the long term, to reach a general agreement for the repatriation of art works.

The trouble is:  that would’t solve the problem.  Because this is not about art, it is about national honour and about a debt with the past. And the past, however unjust it may have been, is not ours to change anymore. So some excited Chinese just need to get over these things. Carrying your wounded country in your heart is romantic and tempting, but in the long term it only leads to blindness, conflict, and the neglecting of important issues.

Click to continue »

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 »

Over the weekend I read this post on zompist that creates a new writing system for English called  “Yingzi”: how would English look if it was written with characters. h/t FOARP

It is an enjoyable read and it is useful to explain to those back home that don’t study Chinese how characters work. In Europe, when you say you are studying Chinese, people always ask the same questions:  is it true that each character is a word, is it true that they are all “pictures”? And these questions are very difficult to answer accurately, as even expert linguists don’t seem to agree on whether characters should be considered words, or even on what is the proper definition of “word”.

The article is also great in that it draws conclusions that go beyond the purely linguistic, and might help understand to non Chinese-speakers the particular importance of the script in shaping the history and culture of China.

The complexities of the writing system, the inherent interest of the pictorial elements, the cleverness inherent in graphic compounds like woods and the radical-phonetic system, and even sociological facts such as the time it takes to learn the system, and the fact that English speakers of all nations can use it whatever their native dialect, would also combine to give the writing system an overwhelming character of its own. It would be seen as more important than speech; there would even be a tendency to think of words as derived from characters rather than the other way around.

And it is true that in China the writing system has an importance that trancends even today into all areas of life, from art forms to humour, marketing and, through the inherent ambiguity of  the characters’  “independent existence”, to the political speech. Expressions used by Chinese leaders can have hundreds of political analysts around the World scratching their heads and engaging in endless debate  about their real meaning, like was recently the case with Hu Jintao’s 不折腾 (buzheteng).

This only happens in China, a country with a population of 1.3 billion people and 20,000 odd characters living together in the same territory.

Click to continue »

I don’t usually do direct accusations on this site, because I know better than searching conflict, and I understand nobody is perfect and we all make mistakes.

But this one I cannot let pass, it is too low and too gratuitous. It is sad: why does it have to be  China who tells the first Lies about President Obama, only 20 minutes into his presidency. This is how they respect one admirable man, and 1 Billion of their own listeners.  (h/t shanghaiist).

To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history, but that we will extend a hand if you are willing to unclench your fist.

Yes, he said that. And yes, they are on the wrong side.

Comments welcome.

The guests just left, what a night! The tense atmosphere of a final match in my Shanghai apartment; high expectations and a sense of History. Friends, all of different nationalities, sharing my wine and watching the first speech of President Obama. The silence during the 18 minutes was complete.

Is it only me, or the first half was more intense than the second? The former was full of the brave ideals we wanted to hear; the latter, more martial and patriotic, containing the obvious honesty, courage and loyalty, together with the reference to race.

It is 3am in China. I will leave it to American experts to analyze more deeply, I just want to highlight this passage which stands out from the rest:

We reject as false the choice between our safety and our Ideals. Our Founding Fathers, faced with perils we can scarcely imagine, drafted a charter to assure the Rule of Law and the Rights of Man, a charter expanded by the blood of generations. Those ideals still light the world, and we will not give them up for expedience’s sake. And so to all other peoples and governments who are watching today, from the grandest capitals to the small village where my father was born: know that America is a friend of each nation and every man, woman, and child who seeks a future of peace and dignity, and that we are ready to lead once more.

.

Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with sturdy alliances and enduring convictions. They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.

“Rule of Law and Rights of Man”. Yes. And how to achieve them in the World? By the “justness of our cause, the force of our example”. That is exactly what we wished to hear. It has become true in the speech, and I sincerely hope it will become true in real life.

Many things can change in the World if our most powerful country -our 老大, or “eldest”, as many Chinese humbly refer to America- conducts itself according to these principles, abiding by those same laws that it proposed and signed, and creating new ones as its Ideals may require.

For, though the oath forgets to mention it, the responsibility of the highest political power on Earth is towards the whole of Humanity. And only a great man can be up to that position.

It looks like for the first time in many, many years, we have found our Man.

You will excuse me for writing two serious posts in a row. It’s been ages we don’t do anything on the Crisis, and these days there’s been a series of articles on the subject that I couldn’t just let pass.

Two of them have to do with the growth projections for 2009. Yawn. We’ve been seeing new projections and discussions thereof almost every week, and after the holidays break it looks like here it is all over again. It is mostly fruitless, because there’s not enough new information between one projection and the next, and so most of the times the changes reflect the mood of the expert more than anything else.

It was however interesting to read this PD article Sunday where one CPC “renowned economist” worried that “China is likely to lose 3.9 million jobs in 2009″ if GDP growth slows to 8 percent. Well, he need not worry anymore, according to other top CPC officials quoted here the very next day, “China Risks Missing 8% Growth Target”, which will be “extremely arduous” to achieve. They are starting to change their tune, again.

And this brings us to a more interesting subject which, although it is as difficult to predict, at least it is more telling than the empty statistical artifice of GDP. I am speaking of Unemployment.

There has been two contradicting articles over the weekend, by Wang Tao from UBS and by Victor Shih. They hold different positions as to what will be the unemployment figures in 2009 and what will be their social impact. In any case, it is worth noting that both of them, with their 15 Million (Tao) and 35-50 Million (Victor) figures, are way above any calculation by the “renowned economist” of the People’s Daily, who gives 1 Million for every % of GDP lost.

Needless to say, I am with the relatively pessimistic predictions of Victor on this issue. Partly because I deeply distrust socio-economic projections issued by banks (you can hardly blame me on that). But mostly because the arguments that Victor puts forward are more solid than Tao’s. Based on his deeper knowledge of Chinese politics,  Victor goes on to analyze the possible consequences of his prediction in a worse-case scenario.

Noting that, even if the government has the capacity (as he calculated here) to subsidize the unemployed families for an extended period,

the current wave of layoffs affects a young and vibrant cohort most capable of carrying violent collective action against the state. Without any systematic triggers, we at least will see a spike in localized riots which necessitate the mobilization of People’s Armed Police (PAP) units all over China. The central government would also be compelled to (and they are doing so already) roll out generous unemployment benefits for migrant workers and college graduates (to the tune of 300-400 billion RMB). If a systematic trigger occurs and instability spreads to a sizable city, we will see the large scale mobilization of both PAP and army units and possibly substantial bloodshed. In most scenarios, the CCP regime would still survive a large scale, cross regional rebellion. However, “overall investor confidence” will be lost.

What is the “systematic trigger” which I refer to? I don’t know exactly what it would be. However, if we look back in history, it can be a wide range of events, including the death of a popular leader, a serious natural disaster, the spread of a deathly infectious disease, a small student demonstration turned violent, religious groups…

This idea of the “trigger” (I called it the “Spark” on my previous post) is right on. It is exactly the element that is missing and the one that will make all the difference: when we have social tension to get the people in action, and intellectuals to draft the road map, the mix is an unstable equilibrium waiting to get in contact with a spark. Of course, Victor doesn’t know what exactly this spark would be, and neither do I because its own nature makes it unpredictable. But I would add to his hypothesis one of my own:

The emergence of a massive wave of protest on the internet that extends to all the forums and BBS simultaneously, with new sites being created faster than the government can block the old, which could create a cascade effect that would force the government to commit its worst mistake: close down the internet altogether. This would add to the protesters millions of online game addicts released from their cybercafes, constituting a serious army of instability.

Check out today’s post by Imagethief on the subject, showing with 2 nice graphs that we have an unprecedented situation in China. Also,  yesterday Jeremiah of the Granite Studio did an interesting comparison of the present situation and the one in 1919 during the May 4th movement. In those times, there was a clear “trigger”: the humiliating treatment of China by the Western powers in the Treaty of Versailles after the First World War, including the unforgivable transfer of territories to Japan.

One last note for the optimists: this weekend I learnt of a reputable economics professor living in Shanghai who recently bought 3 months advance of canned food to store in case the situation gets rapidly unmanageable. In a city like Shanghai, if the logistic networks are disrupted we can run out of food in a matter of days. I am still not quite there myself, but I must admit that, since I heard this, the idea hasn’t quite left my head and I tend to go more generous on every visit to Lawson’s.

UPDATE: Oops, I completely missed this one. All Roads has been doing the same comparison and drawing his own conclusions. You can see it here.

Barely two weeks after the publication of the Chrter 08, it has already become old news, lost in the indifference of Western media (with notable exceptions), and erased in China by the cold intervention of the censors. I want to examine here the importance of this document and give some more thought to it and its possible impact.

There is one line in Chrter 08 which concentrates in my understanding the essence of the document:

“Human Rights are not bestowed by a State. Every person is born with inherent rights to Dignity and Freedom. The government exists for the protection of the Human Rights of its citizens.”

This principle, inspired in the long tradition of the Enlightment and the famous 18^th century Declarations, is at the heart of the matter. Should these rights apply to China, or are they just an interference of foreign ideas in Chinese affairs? This mostly unspoken debate that rages today in China is putting in doubt the universality of Human Rights, and questioning it in view of the singularities of the Chinese culture.

Of course, this line of argument does not resist the minimum intellectual scrutiny, but it’s marketable to avid patriots. One doesn’t need to put many brain cells in contact to see that the entire ideology of Maoism -or today’s wild capitalism for that matter- are also based on foreign ideas. And that great Ideas, like print and paper, cure to cancer or Human Rights, belong to Humanity.

One of the most influential political thinkers of the Enlightment, who inspired the precursors of this Charter, wrote 3 centuries ago:

“I am a man before being French. For I am necessarily a man, but French only by accident.”

This Charter is up to now the boldest effort in mainland China to speak out for the Universality of Human Rights. Its influence, directly or indirectly, will no doubt be decisive at the time when these questions will have to be seriously debated by the Chinese government. Whether this happens in turbulent 2009 or many years later, China will be in debt with those 303 brave men who dared to stand up for their ideas.

Reflections on the Chrter 08

Before I write these reflections, I want to state my respect for all the authors and supporters of the Charter in China. My points below are not rejecting their fundamental principles, and they should be understood as constructive critic.

1. The fact of publishing the Charter and obtaining a few thousand signatures in the Mainland is in itself the most important action for Human Rights ever done in China, and it represents a qualitative leap from previous actions which were: 1- Purely reactive, 2- Mostly isolated, 3- Strongly supported by Western actors. This is a serious challenge to the Chinese government, and a very dangerous one for the signers, as it is well known how China reacts to coordinated efforts of this kind.

2. One important difference from past actions is the positive nature of the movement. The Charter is not merely a reaction or complaint; it is a statement that stands in its own right. Note, however, one important difference between the line quoted above and those in the classic American and French Declarations: this one is formulated in the negative, “Human Rights are not bestowed by a State”. There is still an important element of reaction which will have consequences on the future of the Charter.

3. A document of this kind should try to seek the maximum consensus in mainland China. This is, in my understanding, the main weakness of the Chrter 08. Going into particular details, such as proposing federalism for Taiwan, or putting in question sacred figures like Deng Xiaoping (by mentioning Tiananmen*) is not working to achieve maximum consensus. Neither is aggressively criticizing Mao’s legacy while failing to recognize the important successes of the present regime. These points can be easily utilized by detractors to turn public opinion against the Charter.

4. Most importantly, from a theoretical point of view, figures like Mao or KMT should have no place in a Charter that wants to unite the Chinese. The recent History of China is an amazing tale of cruel failures and unequaled successes. Events that need to be openly discussed at some point, certainly, and compensation given to the victims. But direct accusations are altogether at a different level and unworthy of sharing the same document with the generous ideals stated in the Charter. These things do not only weaken the Chrter 08 from a practical point of view, but also reduce its soundness as a Universal Statement.

Will Chrter 08 fly into 09

I have written it before in this blog, and I am convinced of this: China has an intelligent government. For each propaganda muncher crying traitor at Liu Xiaobo, there is one thoughtful official that reads the Charter and understands the challenges that his country is facing. The government of China is as skillful to control internal issues as it is unable to control the external image of the country, and it has done an impressive job this time at downplaying and silencing the Charter. The lesson of 1989 is well learnt.

The sad consequence of this is that today the vast majority of the Chinese population has no idea of the existence of the Chrter 08. And I am not only speaking of the masses of peasants. A quick survey among my personal Shanghai friends, all of them with university education and speakers of at least one foreign language, gave discouraging results: Not a single one of them had even heard the term “lingbaxianzhang” (Chrter 08) one week after its publication.

It is unlikely that this Charter -or any other Charter for that matter- will in itself spark political change. Its direct impact is limited, and it has probably already run all it had to run. It is not Charters, but Leaders that start revolutions. And when they do, they look back to the works of the intellectuals to give a meaning to their actions. Inevitably, the time will come for political change in China, and Chrter 08 can be the precursor and the basis for future debate.

However, for these changes to happen peacefully they should first reach the largest possible consensus, not only among the intellectuals, but among the people of China. This includes millions of honest middle aged Chinese who still regard Mao as a respectable leader, and who understand that it is him and his followers, with all their faults, that led China from misery and humiliation to the present prosperity.

These people are not criminals or radicals, nor did they consciously cause any suffering to others during Mao’s terrible years. They are simple, honest Chinese who lived the time they had to live working quietly for their country. Brainwashed or not, these are today the good people of China. And when the intellectuals draft and sign a charter they should always bear in mind that it is for them that they are fighting.

History shows that there are two ways to change the system in China: the violent revolution way (Mao) and the peaceful consensus way (Deng). I believe that this second way is the one that most Chinese desire for their country, and China has proven in the past that it is capable of taking it successfully.

However, to move the massive inertia of the CPC requires some level of distress, like the one existing prior to 1978. Whether the impact of the crisis in 2009 will be enough to lead to this situation and whether the leaders in China will be willing or brave enough to push the changes, remains to be seen. But 2009 might very well bring the first real opportunity in many years, and this well timed Chrter 08 might still have its word to say in the coming months.

Conclusion and note to censors

I am living in China, where I have always been treated with patience and generosity by the Chinese people. For this I have learnt to love and admire this country. I know my obligations as a guest, and with my work, my life and my writing I try my best to return all that China has given to me.

Therefore, I state here my respect to Chinese of all ideologies. Dear censor, I would much appreciate it if you can continue to afford me the privilege of living in your country, not only physically, but also through my little voice on the internet. Please, do not block my blog.

Finally, my best wishes to Liu Xiaobo and his family in these difficult moments. Lu Xiaobo is the main drafter of the Chrter 08 and at this moment he is still detained by the police. He should be released immediately.

I want to show him all my support here, and give my tiny contribution by spreading his work below.

Happy Christmas.

.

The Principles

These are the noble principles that 303 brave men published in China in 2008:

Freedom. Freedom is at the core of universal human values. Freedom of speech, freedom of the press, freedom of assembly, freedom of association, freedom in where to live, and the freedoms to strike, to demonstrate, and to protest, among others, are the forms that freedom takes. Without freedom, China will always remain far from civilized ideals.

Human rights. Human rights are not bestowed by a state. Every person is born with inherent rights to dignity and freedom. The government exists for the protection of the human rights of its citizens. The exercise of state power must be authorized by the people. The succession of political disasters in China’s recent history is a direct consequence of the ruling regime’s disregard for human rights.

Equality. The integrity, dignity, and freedom of every person—regardless of social station, occupation, sex, economic condition, ethnicity, skin color, religion, or political belief—are the same as those of any other. Principles of equality before the law and equality of social, economic, cultural, civil, and political rights must be upheld.

Republicanism. Republicanism, which holds that power should be balanced among different branches of government and competing interests should be served, resembles the traditional Chinese political ideal of “fairness in all under heaven.” It allows different interest groups and social assemblies, and people with a variety of cultures and beliefs, to exercise democratic self-government and to deliberate in order to reach peaceful resolution of public questions on a basis of equal access to government and free and fair competition.

Democracy. The most fundamental principles of democracy are that the people are sovereign and the people select their government. Democracy has these characteristics: (1) Political power begins with the people and the legitimacy of a regime derives from the people. (2) Political power is exercised through choices that the people make. (3) The holders of major official posts in government at all levels are determined through periodic competitive elections. (4) While honoring the will of the majority, the fundamental dignity, freedom, and human rights of minorities are protected. In short, democracy is a modern means for achieving government truly “of the people, by the people, and for the people.”

Constitutional rule. Constitutional rule is rule through a legal system and legal regulations to implement principles that are spelled out in a constitution. It means protecting the freedom and the rights of citizens, limiting and defining the scope of legitimate government power, and providing the administrative apparatus necessary to serve these ends.

*For the mention of Tiananmen incidents and discussion on discrepancies in the Charter, see my previous post here.

This week David Dollar has a very informative post: On exchange rates, think multilaterally. It is an analysis of the RMB exchange rates and their change over time. Using one of those useful trade-weighted indexes that the World Bank likes so much, David goes over the history of RMB exchange rates from the 90s to now, drawing conclusions on the policies of the Chinese government and their consequences at each stage.

After some retrospective paragraphs that I absolutely recommend to read to anyone who wants to understand past Chinese currency policy, he goes on to speak of the future:

There is a lot of potential for misunderstanding in this area. China feels that it has had a rapid effective appreciation and now wants to see what the real effects are before going further.The U.S. is probably looking at a substantial devaluation of the dollar against other major currencies, as the immediate financial crisis wanes and the U.S. needs to rein in its consumption and save more. If that happens, it is not in China’s interest to follow the dollar down. It will take good coordination between China and the U.S. to resolve their large imbalances in a smooth manner.

And I have the same objection that I always make to the World Bank Chinese publications: they stick to strictly economic terms, and avoid Chinese politics as much as possible. OK, I can understand being part of the WB he is not as free as this anonymous blog,  and he prefers to not stick his nose into sensitive matters. The trouble is, looking at the economy without the politics around it leaves you completely blind to see the immediate future.

I am not even close to having the experience of David Dollar or the number crunching capabilities of the World Bank, but I have eyes to see that something very big is missing in his picture. Multilateralism? Misunderstanding? Before any misunderstanding can actually happen, there has to be a will to understand. And this is far from sure at this point.

I just copy here part of the comment I wrote on his blog to show what I mean:

Still, as you imply yourself in the post, economists are always better at explaining things in retrospect. I am not sure at all that Chinese authorities will do the right thing in 2009.

.

We need to keep in mind that Chinese politics always give priority to internal issues over external image or foreign affairs in general. Examples of this abound in recent times, such as their attitude towards protesters during the Olympics, or their cancellation of latest EU Summit because of DL, etc.

.

If it comes to a point where unemployment gets even slightly out of control I have no doubt that Beijing will do what it takes to avoid internal problems. Including playing with the RMB, engaging in trade wars, and all the while siding with the “people” against the “Western menace”.

.

We should keep an eye on Unemployment and Currency.

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 – ?

<.. ! ..>