The Tiger is coming to the surface. The New decade has already come in the West, and in China we are again in this no man’s land between the Solar and the Lunar New Year, between the Bull and the Tiger. It is time to look back and see where we stand.

In World politics time is measured in decades, and many will call the 00s the decade of China. It is just a simplification, these 10 years are nothing but part of a longer process started in 78, and probably still ongoing for another decade more. And yet, if we have to choose one event that marked the decade in World politics, like the end of the Cold War marked the 90s, the rise of China is the most reasonable choice. No other event is likely to be be more decisive in the history of the World.

In the first post of this Year End edition we proved that, within the general growing trend of the decade, 2008 was a peak for China’s presence in the World media, and 2009 has gone back to relatively normal levels. This peak cannot hide the general trend: that China is growing inexorably to become a World superpower and that it is already changing the power balance of humanity.

Measuring the Chinese decade

If we have to chose one single parameter to measure this rise, it is the economy that can give us the best clue. There is no point in going to the decimals when analyzing decade trends, so the calculation is simple: China has grown roughly 7% faster than Western countries in the last decade, and all seems to indicate that this will continue into the 10s.

The calculation* is straightforward:  1.07^10 = 2

At a rate of 7% differential a year, the size of China’s economy relative to the Western economies is doubling every decade. Today most estimates of GDP place China between 1/4 and 1/2 of the USA economy, depending if it is measured in nominal GDP or in PPP. This means that, if nothing else changes in the next decade, Chinese economy will be the biggest in the World anytime between 2020 and 2030.

The consequences of this calculation are enormous, and they are already operating today. That is because in politics we behave like in the stock market: decisions are made taking into account the foreseeable future rather than the present. China is already displacing the EU in World politics, even if it is a fraction of the European economy, even if it doesn’t want to be the protagonist. The media and the politicians are betting on the future value of China.

The Question of the Decade

Of course, nothing guarantees that the growth patterns of the 00s will continue in the 10s. There is one important school of thought that insists on the unsustainability of the Chinese system. They mention corruption, growing inequality, lack of civil rights and a civil society, repression of creativity and free market, the inability to build World class brands and a financial system in disarray, among other problems, to justify their prediction that sooner or later the Chinese economy is bound to crumble.

Those of us who live and work in China know that these problems are serious and very real, and that somewhere down the line there is bound to be a serious readjustment. And yet, the same predictions have been made regularly almost every year in the last three decades, and the collapse has not materialized.

The real question of this decade is When?

Will the Chinese economy stop growing before or after it has become a superpower as large as the USA? Will the Chinese seriously demand more rights and liberties before or after China has become a developed country? Will the economic and political readjustments be done progressively with the new generation of Chinese leaders, or will there be a dangerous explosion in this decade?

We don’t have the answers to this today, and you should not believe any China expert who claims to have them. All we can do is frame the question above, and watch out for early signs to answer it in the coming years.

There is however one statement we can make today. Looking at the World, it is obvious that many important players are already betting on the rise of China, and this view is gathering more support every year. As we have seen above, to the extent that the majority in the World believes in the superpower scenario, China is ALREADY a superpower. The political power comes years in advance of the GDP, and the new World order is already a fact today.

Photo: Eric Risberg

*This is an engineer’s calculation, the nightmare of any serious mathematician. And yet, most bridges we do are still standing, and when we speak of decade trends anything more accurate than this is a joke.

I was tinkering with some statistics last night, considering that strange idea of the Insularity of the Chinese Internet that we’ve been discussing lately. The expression itself is odd, because “internet” and “insularity” form an oxymoron, but you hardly notice these things when you live here. It’s normal routine in the land of socialist market economy.

Whatever we make of the phrase, the fact is that it comes up every time, whether we are speaking of language, media or politics,  all seems to point in that direction.  The pictures below are my attempt to draw a World Map of the Internet to illustrate this insularity, using the data from the site Internet World Stats.

Here is the first idea I had: I got the statistics of all countries with more than 10 Million internet users, that makes 32 in total, from China to Morocco. Then I did an Excel chart where each bubble has an area proportional to the internet users of the country, and crucially, I filled the bubbles with code from the Matrix. Result: the World Map of the Matrix:

The World Map of the Internet Matrix

One interesting thing in the map above is that Asia is already the largest internet area in the World. Amazing—but not really, after all, it has by far the largest population. And this is nothing compared to what is coming: with the growth of India and China the internet is going to be an Asian joint in the next few years. No hit will be really global on the net without them. Up to now, most people on the net were from developed countries, from now on the majority will be from developing ones. The close contact between our societies will have important consequences online and off. That is, supposing we really manage to connect.

But when we speak of the internet, it doesn’t make much sense to look at political boundaries. There is no such a thing as border controls online, what really unites or divides the peoples is culture. An in particular, the most important parameter is language: regardless of your national origin, what defines you as an user is the language you surf in. That is the reason why my browsing habits look more like this blogger’s than like anyone in my country: ESWN and I have completely different backgrounds, but we have in common our surfing languages.

So I looked up the statistics of the 10 most used languages on the internet, from English to Korean. This time I coloured the bubbles with flags, and I placed them roughly on the center of gravity of their community of speakers. The result is the map of Surfing Languages:

The World Map of the Surfing Languages

Still, the map is not great. Many of the speakers in the massive English bubble are actually Indians, Spanish should be both in America and in Europe, and Australia is completely out of the picture. Physical distance has no meaning on the net, even less than political boundaries. It becomes clear that geography is of little use for my purpose, so we might as well dump  Gmaps and stick to the bubbles.

My new diagram looks like this, where all the major internet communities are represented together in a Cloud. We are all interconnected, and the only solid differentiator is language. Two people might share a hobby, like soccer , but they don’t go to the same websites if they surf in different languages. Most of the media and resources on the internet are not translated into other languages, but rather re-written and re-interpreted by native bloggers/journalists, who function as border control among the communities.

Improved World Map of the Internet: the Cloud

One of the things we see on the Cloud is that all the communities are touching each other. But I’m afraid this is not a very precise picture. Normally Russians don’t translate Japanese content, neither do Portuguese translate Arabic. The English language has a crucial role on the internet today, because in most cases it is through English that the rest of the languages communicate: Most content is translated first to English and from there to the other communities. The English bubble, including users from all over the World, is the Center of the Internet.

Another problem with the Cloud is that it shows all the communities equally interconnected, which is not very realistic. Users who speak European languages are much more likely to read English. The Spanish community, for example, includes many Americans who surf English sites as much as their own language. Actually, most of the language bubbles share a significant part of their pixels with the English bubble, so we can represent the Map as a sort of Venn diagram:

Second Iteration: the Venn Diagram Map

We see the new Map is very different from the previous one. Now there is a cluster of Western languages that share a lot of content with English, two more languages that share a bit, Russian and Arabic, and then the three languages that form the core of the Asian internet today: Chinese, Korean and Japanese. And you may have noticed that I have drawn Chinese at a distance from the rest.

For various reasons that we will see, Chinese don’t use Facebook, or Twitter, or Youtube, or MySpace, or eBay. They don’t read Boing Boing or the Huffington post, and they chat in their own QQ chatrooms. They rarely receive the viral emails that we receive, and instead they get others like this one. They have all the things that we have and some more, but they built them in parallel in their separate parcel of the internet.

Whereas the sizes of the bubbles above are based on quantitative data collected by a respected source, the positions are only decided by semi-informed feeling. Any reader could argue that China should not be so far right. There is Hong Kong,  Chinese-Americans, even mainland Chinese who do surf in English. And I will be forced to admit that the Venn Map is flawed, because it fails to show this.

But in such a fast changing World like the Internet, position really means nothing. What holds today may be different tomorrow. What is really significant is the dynamics: which direction is China going, and how will the internet look in 10 years? Everybody agrees that China’s internet community is growing very fast, and that is natural. The worrying part is that it might also be moving away from the rest.

Third iteration: The Dynamic Map

Because in Western countries internet penetration is already very high and India is still lagging behind, in the next 10 years the Chinese internet will become almost as big as all the rest together. If it continues to diverge, it may grow into a parallel network, like a dark side of the moon, a vast, self-sufficient island that the government can cut out at any moment and most people inside it don’t even notice the difference. This defeats the whole idea of the www.

Whatever the real magnitude of the problem, it is clear to most observers that there is a disconnect between China and the rest of the Internet, and there are powerful forces pulling them further apart. Fortunately, there are also forces working to balance this, and the results in the coming years will very much depend on how those factors play against each other. Here is how my new map looks now:

The Forces of the Internet

As we saw before in this blog,  some of the main factors that keep China separate from the World are the following, shown in red in the chart:

• Linguistic, as we saw in this post, where we proved that Chinese language is beautiful and unique in many ways, but it makes it very difficult for Chinese and foreigners to connect.
• Cultural, in the broad sense of the word, meaning that the communities have so different views and values that they cannot understand each other. This includes the problems with the Media.
• Political, the deliberate actions of the CCP in  multiple forms, including Nannies, the Great Firewall of China (GFW) and directly arresting people, as we saw here.

And in green the main factors that go in the opposite direction. Here they are in detail, for the optimists to rejoice:

• The growing number of bridge bloggers and other internet uses that work to connect the two communities. These include not only the English language Chinablogs, but mainly Chinese people who translate foreign media and other content on the Chinese internet. From this humble blog I also did my bit against the GFW.
• The post 90s and 80s generations that already dominate the Chinese internet. Their personal tastes in arts, music or cinema will probably be more international, and push them to connect with the World. This point is object of debate though, and some Westerners are very skeptical of the post 80s.
• Business is one of most important factors that link China to the World. Since the construction of the EU, it is no secret that commerce can achieve the most ambitious goals in World Peace, so whatever your take is on those business minded Chinese, they are probably the main force that is still keeping the Chinese Island connected and holding the World Wide Web together.

What do you think? 你有什么想法？

Do you think I am exaggerating? Or is the problem even worse than this? Any factor I missed in the Internet Maps? Internet friends: you are the pixels inside the coloured bubbles, you know all about this World because it is your home: comment and help me improve my Map!

你觉得这很夸张吗？还是认为问题写得还不够严重？你知道我在互联网地图里忽略了哪些元素吗？网友们：你们是小圈里面的像素，那里就是你们家，帮助我改进我的地图！  U5KMU63NGPP2

I enjoyed reading this article by Evelyn Chan on the Carter Center blog.  It is clear and well written and in my opinion it is right on the money. It’s the article I would have liked to write on the stimulus package (h/t  CDT)

When it comes to Chinese economy I have always been a bit of  a pessimist. This year I am getting to understand better the situation of public finance - I recently read the informative Finance and Factions, by Victor Shih-  and now the outlook looks even bleaker. On the surface China is doing well, but the more you look into the details the more unsustainable it looks. Which is exactly how systems look when they are about to snap.

And yet somehow I will not be surprised if in 10 years time we look back and find that we are still in the same situation.  After all, there were experts writing similar predictions already 10 years ago…

The mysterious ways of computer science.

Today for example, I completely panicked when I stumbled into one of the bugs of wordpress. For some reason, when you add a “click to read more” tag next to a section in bold, it goes and turns the whole blog to bold, including sidebar, titles and header. So yes, I think I have gone bold for a few hours,  but it was not intended. I hope I didn’t hurt any feelings.

The Goose Huggers

But this bolding effect is nothing compared to the vicious attack that this blog is suffering from an international band of Goose Huggers. 

I have been wondering for a while what is going on with my Goose post. It is attracting more clicking action than anything else around here, and by now it has become already the most popular of my posts. 

Click to continue »

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 »

It’s been half a year since the first announcement of the Chinese stimulus package, and the time has come to look back and ask ourselves: how is the Crisis doing to-day? Well, we don’t need to surf very far to find some hints. Judging by the attention she gets  in the media, the Crisis is still in tip top form, barely upstaged by a drove of sneezing pigs, and plotting her next move in the People’s Republic.

And in the meantime, we have read so much about her that the debate gets old, the initial guessing game we merrily joined some months ago giving way to a phase of weary expectation.

So, finally, is there going to be trouble in China or not - Will the Wall Fall? I have my own opinions about this, but I’ll keep them clear off this post. Instead, I want to  summarize some ideas appeared in the sinosphere, list the main arguments from each side, and let the reader choose which make sense.  Luckily, this is the kind of discussion where the same arguments are fluently used to support all views, so the list can be made manageable.

But first of all, let’s examine the parties. In this business of Chinese Crisis Watching there are 3 main schools of thought,  which can be roughly classified as follows:

A. The Optimistic Executives:  Old China hands with long memories, bullish consultants with short ones. Optimistic people with or without a stake in the optimism of their clients. Just to list some recent ones.

B. The Academics of Doom:  Everybody knows the highest fulfilment of a dismal scientist is to announce doom and then have doom come. On the other hand, there might be something in what they say…  some examples.

C. The Rosy Men of the Republic: This 3rd group is endemic to China. It consists of a set of highly prepared bureaucrats who resolutely believe in the Feelings of the Motherland, in Santa Claus and in the Theory of Scientific Development. You can see here some of their latest achievements.

The English-speaking sinosphere is a little world, and we rarely see the big names that populate other provinces of the internet. But we do have a great advantage: debate here is relatively free from partisan politics.  There is not much in the way of left-wing China blogs, for instance, and American republicans don’t go about throwing  green tea parties just because grandpa Wen announced a healthcare plan. 

In fact, the left and the right in China are conveniently concealed behind the red walls of Zhongnanhai. There are few leaks, and the real data which analysts use is pretty much available to anyone with an internet connection and some notions of mandarin. This is a level field where you can browse around, draw your own conclusions, and enjoy your tea leave reading with Armstrong’s great cover of  ”La vie en rosy“.

But enough if the rosy chit-chat. Here’s the points.

Let’s admit it, the intro section of this blog gives little information about me, other than the proven fact that I am not called Lilly. And I know from what I have read on other blogs that some people attach great importance to a name and a face, and that in their eyes a blogger signing ULN must be little more than an electronic scoundrel.

I can understand these feelings. Nothing would make me prouder than to stick my picture and my name at the top of each page, because I am not ashamed of what I write and I am ready to stand for each of my statements. Nor is mine a full anonymity, as I know and I am known (with my real name) by many people in the China blogging community.

So why continue hiding behind a pseudonym? Simple:  I like writing about subjects that have the potential to excite large numbers of people. Today I represent a company in China, and this company is not mine to decide its political stance.  There is a real risk of clients associating my blog with my company if my name gets spread all over the Chinosphere - it has happened to other bloggers before-  and due to the kind of clients I deal with, I cannot allow this to happen.

So if you don’t mind, and until the next horde of fenqing decide to flesh-seach and chop up Uln, I will keep my semi-anonymity. But since we are speaking of “credentials”, I want to unveil the following points about me, just to make sure that nobody takes me for what I am not:

• I am an engineer, but I have a Master in Business and a Semi-Master in International Relations (Didn’t get the degree because I got a job and never found the time to finish the thesis, but I will be back).

• I like reading a lot, books. Sometimes even uni course books, like my famous brick: Samuelson’s economics. Because of my focus-challenged nature I have always learnt more from my own readings than from what I heard in a classroom, even when I had remarkably good teachers.

• I have been in China for 2-3 years, including Beijing in 2002 and now  Shanghai. I haven’t stopped for a day speaking about politics with all the Chinese I’ve meet. That probably explains my poor results with the “delicate” sex. On the other hand, it has taught me to be diplomatic.

• My experience and “achievements” include weird and unconnected points such as: winning a national poetry contest in France, writing and performing songs with guitar and harp, spending 1+ year living and coordinating a project in 5 different provinces of North Korea, and others even more irrelevant.

• And finally, the most exciting: my Chinese qualifications. My level is already enough to read books in Chinese, the last book I read was XiongDi by Yu Hua, and I absolutely recommend it. I am aiming at HSK 7,  signed up for  the next test session in April and then I will publish the results on this blog.

Voila,  I don’t think any of the points above provides a serious basis to support my comments on Chinese politics and economy, so I am safe from self-satisfaction. My posts will all need to stand on their own, and when they don’t please point it out. Same when I “invent” words and phrases that don’t exist in English.

And I will leave this info hidden behind the fold of a single post instead of updating my profile info. Because I only feel like telling these things to those readers that had the patience to come all this way.

Xinhua has come up with the most brilliant in-depth analysis of the economic crisis that we’ve read to date.

BEIJING, March 8 (Xinhua) — China’s relatively fast economic growth has caught the eye of the world at a time when most of the countries are experiencing the full wrath of a raging economic slowdown.

As some Western media questions why China works, the world’s economic experts and scholars are also wondering the same thing: What tools China has to keep its economy resilient and why it is well-positioned to weather the financial crisis?

The answer lies in the nation’s unique growth mode featuring a “scientific outlook on development.”

Economists and bloggers of doom, read and learn.  For the sceptics, this editorial is based on the work of recognized specialists, such as:

• “Analysts”
• The vice president of Stellenbosch University
• The Colombian ambassador to China
• “The international community”
  
• Velia Hernandez, professor from the A.N. University of Mexico

And many other “economic experts and scholars”.

Finally,  science at the service of the community.  And the question is, what do I do now with my two months worth of canned tuna?

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.

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.