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Author Topic: This time, China is different (China, Terminator of Globalization)  (Read 29818 times)
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Polly
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« on: December 28, 2006, 06:31:54 PM »

(The original Chinese essay by 陳經 is at the end of the thread)

(28/3/2013) Edit to add link to original article:

http://bbs.tianya.cn/post-worldlook-208272-1.shtml

I came across a very interesting post on 6-parks written from a pure Chinese, and rare enough, optimistic perspective on the economic development and prospect of China. The post is more than 11,000 words and the translation will have to come in parts.  Any errors and mistakes remain my own.  This is the first installment.

Quote
Before I blow the trumpet for China, let me blow my own. All these years I have been steadfast in my optimism and advocacy for the outlook and development of China – one can say I have “seen the light” relatively early.  The Chinese government has given me plenty of face, stiff economic data come out one after another.  Internationally she makes moves in all four directions  with bigger and bigger momentum and magnitude.  Were one to conduct a crisis analysis for China by way of conventional thinking, be it the bleeding-hearted and indignant castigation of the “righteous individuals”, or the schadenfreude of the adversary powers, the impending-collapse theory does not seem to hold water.  More and more evidence points to the fact that the development of China is much different from that of a developing country.  “Expectations” that the agricultural, automobile and retail-sales sectors will be crushed after her entry into the WTO, have failed to materialize.  What has bankrupt though, are these expectations.

People who buy into the collapse theory are very much swayed by their own political belief.  There was never a big market for this faith anyway and it is not surprising that the prophecy has never come true.  What is surprising indeed is the challenging stance adopted by China towards the developed countries.  Though I have myself half expected it, I was surprised to see her challenges coming off so soon and so blunt and direct.  The fear mongering assertion of “flight of capital running into a trillion USD”just a while ago, has quickly turned into “hot money spilling over” and “foreign exchange reserve to double”,  which is looking to be number one worldwide in no time at all (note 1).  Just a few years ago, few would have noticed that China was secretly investing in overseas assets.  Within 2 years Chinese enterprises are buying and acquiring across the world like a nouvelle riche, with a penchant that is eye-popping.

“China is a developing country” has been repeated so many years as it will be endlessly in time to come.  Yet this “developing country” has changed so much, she is almost beyond recognition.  By landing ashore, the 4 little dragons have brought about remarkable transformation, but only to themselves.  The development of China has just started off and yet it is bound to change the whole world.  When it comes to looking at the economic development of a developing country, the developed countries have always been aloof as if they were looking at some insect or worm in a test tube.  Now confronted with China, they cannot help but throw themselves into it.  So many developing countries have been economically embargoed for so long, they can only listen to the looter-logic sophistry of the developed countries while watching their own economy wilt into desolation. Yet with China now, just by lifting her interest rate by an iota she managed to send stock markets around the world into a violent hiccup.  To think, just a few years ago, China was mentioned in the news of the developing countries no more than a few times a year, now they only wish they could talk about her a few times every 60 minutes.  The developed countries have blocked China for decades, and until just a while ago, have been pumping money and working tirelessly to fulfill the “China collapse” theory.  Yet just while they were puzzling over its final realization, they discovered China has become the global economic engine, with the economic growth of the neighboring countries hinging upon her.  Even her pause to buy more US T bills will be problem enough for Greenspan to have to come out and explain to the angry US Congressmen gently and gingerly.

Of course, the problems that China faces are plentiful.  Problems that cannot be solved for the time being are many. That is why, the collapse theory will continue to exist in its many forms.  Even for those who are hopeful of the future, the population, resources, environment and technology issues remain head-hurting problems.  That is why their forecasts and expectations are always lower than realistic, their optimism restrained.  Yet for better or for worse, we should look at the issues from a global perspective, we should think about the kind of changes China will bring about to the world and not about whether Chinese economy will grow or die in the test tube.  What we can be sure of now is that, nobody, not even the Americans, have the luxury of remaining aloof and contemplate this experiment as a matter of pure meta-physics.

“Developing economy studies” is the study of the economy of developing countries, a big portion of it is aloof observation and commentary by the economists in developed countries, another big part of it is the gut-spilling and bone-shaking lament of the economists in the developing countries. Applying this school of thought to China and the outcome is “total blindness”.  Different forecasts have bankrupt numerous times, and laughable assertions are not few.  Symptoms that defy conventional theory emerges one after another.  Now foreign economists are becoming more circumspect, the few Nobel Prize winning economists who have visited China are more polite, and observably less snotty than before. The study of Chinese economy has also become a scholarly pursuit, with Chinese economists going swimmingly and having a field day. There is both great internal (and conflicting) needs in America, on the one hand to erect an enemy, and on the other to maintain the correctness of their democracy value system by deprecating and belittling the development of China.  That is why the China threat theory and the collapse theory comes afore in turn, but they only serves to confuse and confound the Americans themselves.  When it comes to China, many of them have become card-carrying boneheads.  In sum, reliance on economic theory or multinational media editorials and propaganda would not be truly conducive, we have to make deduction on our own when it come to understanding China.

(comments on various media and intellectuals snipped)

The Chinese are worry freaks, we are always“anxious about the country and anxious about the populace”(note 2),  anxiety is our middle name.  Any tiny aberration will be magnified and many of them looked at and alleviated to the level of decimation of civilization.  At the sight of hardship of the peasant workers, we immediately condemn the corrupted officials, the elite, the government and the reform and opening policy.  We see corrupted officials and lament “state will be no state” and all is hopelessness, “let’s all migrate and find a living elsewhere”.  We find prostitutes, robbers and thieves and conclude that morality has come to an end,  we can’t stay on.  When there is a congregation of people, we imagine dry firewood and fire sparkle abound, as well as the remediless of the conflict of class struggle and revolution on the brink.  When Taiwan makes a fuss, we imagine unthinkable conspiracy cooked up between the USA and Japan and their war plans to thwart our modernization plan.  Any obstruction in the oil pipeline or acquisition plans necessarily means Chinese is forced to pay big bucks for oil and not really getting any.  When raw material prices hike and export prices dip, we imagine import and export being profitless and the factories go bust.  Trading dispute in textile product and footwear means entry to WTO for naught, that we have forfeited our profits and taken all the shit. We see reliance on modern import in certain area of technological production and conclude we are working our fingers to the bones for nothing, sustaining bigger loss with bigger production, and economic crisis cannot  be far away.  We look at a few trillions of bad debts in local banks and imagine bank run upon the arrival of their foreign competitors.

This mode of thinking, coupled with the anger arising from our sense of justice, indignation and patriotism, has seen all these years passing in anxiety and condemnation.  People worry on as old problems are solved and new, more insidious problems surface.  This is of course not blameworthy.  Generally speaking, unless in times of great social tumult, such anxiety and condemnation can work as moral pressure that presses the society to move forward.  However, there is no congenital veracity in this mode of thinking just because of its moral laudability.  To have an economic forecast that is tenable, we must well think with a level head and from multi-perspective.                

(humorous remarks snipped)

2)   Latin America

(to be continued)

Note 1, this article is believed to have been written in 2005.
Note 2, part of a famous poem of a famous Chinese poet.
« Last Edit: April 28, 2013, 07:06:14 PM by Polly » Logged

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« Reply #1 on: December 29, 2006, 05:58:32 AM »

one word... paddle fish.
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« Reply #2 on: December 29, 2006, 09:34:38 AM »

I'd give anything to blow my own trumpet.

I'd never need to leave the house.

Driveby: Do you suppose this guy might be interested in blowing his own saxophone?
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« Reply #3 on: December 29, 2006, 10:19:05 AM »

i dare say it would have been thrown out the minute he got back to his hotel room.i am trying to think of other foriegners i met along the way in china i hated. i know we all have stories so share them. i was in a busines meeting/lunch once when this fat aussie guy reached across the table with his chopsticks to accept a business card. i kid you not. a real show stopper.

did anyone ever meet pete the bar owner from the kiwi bar. he was with out doubt the worst ever and i doubt anyone here could beat him for a story. i couldnt begin to say some of the things he did.
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« Reply #4 on: December 30, 2006, 10:45:42 PM »

 Chinese Smiley  Aaaaa, little grass-hooper, we are quite used to thes abuse, I remember reading somewhere that as late as the turn of last century, there were foreigners saying that Chinese was not worth learning, because it was the "ants' language".
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« Reply #5 on: December 30, 2006, 10:48:12 PM »

Quote
2) Let’s look at Latin America first

The term “developing country” is pretty close to a term of abuse.  They are synonymous with divergence of the rich and the poor, corruption and graft, debt crisis, economic crisis, quick succession of political powers, pollution of the environment, slumps and humanity crisis.  People around the world are pretty well endowed with the spirit to strive, those, like the Indians, who are naturally happy-go-lucky and easily content with their fate, are minority.  Confronted with these ills, one has to find out the root cause.  The developed and imperialistic countries have been wicked since the age of colonialism, so wicked that pus oozed from their pores.  They looted and plundered thereafter through unequal trade and evidence on the subject abound.  Poor countries, and not just China alone, have mounting bitterness and bottomless hatred when it comes to developed countries.  Chairman Mao, facing this macro-trend, had divided the world into three camps, it was indeed an ingenious stroke.
Apart from those roaring with communist notion, there were those in Latin America who were unwillingly (words missing), all of them had lifted their debate and discourse to the level of economic theory.  Judging from their results though, both camps had met stark setback.  If one were to be blunt, they have failed.  China has been ploughing her lone furrow. Right from the beginning she has quarreled with basically every other communist country and was blockaded by all the major powers.  She forced her way around for more than two decades and then started fumbling with the Reform and Open-up Policy.  In a number of areas, she has charted new grounds where precedent did not existed.  Looking at things as they currently are, I can only say if there is hope amongst the developing countries, it can only be pinned on China that she finally achieves something.  In terms of India, I used to think there would be “drama” (note 3), but not quite.  The country is not even comparable to the Latin American countries as I gathered better understanding of it.  India’s divergence in wealth and poverty is beyond imagination, her experience of particular interest and value is few.  What is remarkable is the result of good fortune, and what is undesirable is boundless.

Latin America countries have a long and intertwining history of dealing with American imperialistic economy.  From the perspective of economic theory, things look pretty modernized and respectable.  Many would be impressed with their “development” theory, in particular their policy of “import substitute”.  Their fundamental objects are industrialization, and breaking away from the international economic structure of “center-peripheral” dominated by the developed countries.  There are three major elements to industrialization, the introduction of substantial investment, the implementation of protectionism and the stringent control of foreign exchange, and the regulation of policies in the areas of taxation, wages, profit and employment, so as to foster the development of domestic enterprises.  In the course of industrialization, a country has to engage in “import substitute” in an effort to throw off reliance on international market, in particular on the products of developed countries, so that it can form its only production base and achieve economic independence. There is one clarification to be made here.  Because of historical reasons, when Latin American countries started off with “import substitute” in the 1930’s, foreign capital was still in the domineering role, unlike the foreign monies that fled in their entirety from China during her revolution. Therefore China started to toy with manufacturing without foreign capital in the picture, whereas Latin America started off with substitution and with foreign capital as its focal point.

Prima facie, this economic policy cannot be too right and the economists in Latin America were no vegetarians either (note 4). As a matter of fact, import-substitute made great achievement.  Brazil, Argentina, Mexico were the leading countries amongst the developing world, with per capita GDP much higher than that of the Chinese. They have achieved self-sufficiency in the area of light-industrial product in 1950, and over 80% self-sufficiency in the area of industrial product in late 1960’s.  There was remarkable improvement in their economic power and general living standard.  Mexico had once held the Olympic Games, it couldn’t have been done if you are totally inapt. And those were the good old days for development economics.

Apparently this scenario is similar to what is happening in China - foreign capital finds its way everywhere and a lot of advance equipment comes from overseas.  Many left leaning policies demand protectionism, the driving away of foreign capitals as well as the improvement of autonomous technology.  We all know that Latin America has since derailed and there was a litany of economic crisis.  What were they all about?

The derailment of Latin America came in two stages.  The first stage is the crisis arising from the failure of the import-substitute strategy, and its consequential package of neo-liberalism, market-opening, structural realignment and globalization. The second stage is the destruction and crisis brought about by neo-liberalism and globalization, and this time SE Asia hit the wall as well.  We are generally more familiar with the second stage and its colossal disasters surfacing in the last two decades.  There was global condemnation.  Even the developed countries felt embarrassed and vowed to study globalization more closely, namely the random spilling of foreign capitals in and out of capital markets, and the depreciation of currencies in the event of insufficient foreign reserves.  I have mentioned these before.  But where did import-substitute go wrong? It certainly looked very convincing.

This is very close to Wang An She’s reform (Note 5), what appears to be a very good idea can become a totally different kettle of fish upon execution and can bring about the very antithesis of intended result.  The original object of “import substitute” was to cut reliance on foreign countries, yet after three to four decades of implementation, the reliance becomes even stronger.

The inherent flaw of “import substitute” is that it shuts out the rest of the world.  Domestic industrial capacity increases after years of working, but the world market is forgotten. Control by international market is decreased but only at the expense of the competitiveness of domestic industry in the global arena.  Latin American countries were indeed at a loss as to their role in the world.  Sell raw materials? Doesn’t seem right.  Sell industrial product?  They are not competitive enough.  Time is wasted contemplating about these two stools. They ultimately sold raw materials when money was short, not unlike Russia.  Things were relatively easy and went their way when the initial stage of industrialization came to fruition.  Yet as industrialization becomes more sophisticated, problems present themselves.  Big problems.  Foreign trade and international trade balance got worse! Consumer goods were produced domestically, so it’s mission accomplished.  But as industrialization advance in sophistication, the machination that produce the consumer goods itself is not easy to make.  God alone knows when they were going to get their hands on it if they were to make it themselves, so import was inevitable.  Plus the parts and components, essential raw materials, and the price hikes by the developed countries, a lot of money was spent. In addition, the nationalization of foreign enterprises, over 200 of them after the 1960’s, also took colossal amount of foreign reserve. The rich who worshipped and adored blindly foreign goods spent big bucks on their import.  Internationally domestic goods was far from competitive, and there was few reliable source of income.  As a result, foreign trade balance dipped into the red year after year.

Then there was the social problem.  They embarked on the industrial and neglected the agricultural sector.  The land reform was less than thorough and large number of farmers who were half-unemployed flooded into the cities and slums mushroomed.  The industrial sector was intended to absorb the farming population, yet it turned out that more than half of the “import substitute” industries were capital and technology intensive, and couldn’t absorb much labour.  Without a satisfactory level of social justice and social distribution, the divergence of wealth and poverty became more extreme.  Social problems gave rise to social unrest which saw the top of the rank engaging in coup and the rest in guerrilla warfare, upholding Mao’s banner for military revolution.

With their own nationals being unreliable and the international trade balance getting worse and worse, the governing bloc in Latin America was left with one option: to have the problems solved by imperialistic developed countries.  Loans were order of the day.  And of course as the developed countries are not “religious men and pious women”, the conditions stipulated were as stringent as could be.  What could come more naturally than greater and greater reliance on the developed countries?  Thus they set foot on the path of globalization and ruined a great part of their achievement in the area of “import substitute”.

Globalization is not the solution to all problems, because globalization is utterly ruthless.  Many of those in the developed countries find it frightening, not to mention the populace in Latin America.  Now with the production factors concentrating in China, the product of Latin America are no more competitive.  They could scrap together a humble living for sure, but should they aspire to leap to a higher level, their  international trade balance will plunge.  This is indeed an insurmountable problem.

3)   Savior to the developing countries?

Latin America is over but they offered a pretty clear lesson.  The term “latin-americanize” is quite hot.  Much ink has been spilled over Latin America giving a bad name to “harmonious society” or that care should be taken lest they would impede on “harmonious society” (note 6).

Compare the path of China to the above analysis and we will find that instead of the  “import substitute” strategy, she has shut herself in and engaged in autonomous industry for a period of time.  Lots of mistakes have been made during the time but some problems were solved as well.  Because of the mistakes, the proceeding speed was less than satisfactory, with lots of high water marks and low bottoms, on average (the growth was) about 7% (per annum).  It could have been much higher.  The agricultural sector was not much of a success, not many of the peasants went to the industrial sector in the cities.  As at the late 1970’s, the living standard and infrastructure were comparable to those of India, a typical case for underdevelopment, and were a lot worse than lots of developing countries and not just a little worse than Latin American countries.  There was a huge gap between China and the developed countries.  Those who have went abroad for state visits were shocked.  This can be accounted for by a number of reasons – enclosed development, political upheavals, failure of left-leaning policies etc.  But it was not quite as bad as it seemed, there were a few achievements.  She has become substantively different from the developing countries. A leading party with remarkable executive prowess has arisen.  When it is on the wrong path, the results are catastrophic. Yet when it is on the right tract, the results can be quite phenomenal as well.  She is autonomous and independent, with a free hand to chart her own reform.  The land reform was a success, all land has been vested in the state, and because of this the government was able to derive big money from the use of land and use the money to carry out “3-connections and 1-level” in the special development zones.  There was no foreign capital, as there was no foreign debt.  Reform could start from scratch with minimal burden.  The capacity for autonomous industry was not bad.  In terms of industrial upgrade, the wall to the next higher level was not entirely thick and opaque, the leap was not unmanageable.  The bottleneck in industrial development capacity was higher an average developing country.  The society was stable.  The labor force was hardworking and willing to learn.

   


Note 3, “drama” is probably a Beijing colloquial term, the exact meaning of which I do not understand, my best guess is “scenario with unfolding tension and interest”.
Note 4, vegetarians are believed to be soft-hearted and weak-handed, non-vegetarians are in contrast relentless.
Note 5 .1021-1086, a prime minister who initiated land reform which ended in failure. http://zh.wikipedia.org/wiki/%E7%8E%8B%E5%AE%89%E7%9F%B3
Note 6.  http://en.wikipedia.org/wiki/Harmonious_society
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« Reply #6 on: December 31, 2006, 01:37:09 AM »

Chinese Smiley  Aaaaa, little grass-hooper, we are quite used to thes abuse, I remember reading somewhere that as late as the turn of last century, there were foreigners saying that Chinese was not worth learning, because it was the "ants' language".
Polly he does sound like a guy with a huge chip on his shoulder.

He starts by creating a strawman claiming the rest of the world looked down on China and then proceeds at greattttt length to demolish his premise whilst simultaneously deriding his own countrymen for their lack of patriotism.

 In all my time I have never heard or seen any anti-chinese propaganda other than the usual rhetoric from the usual xenophobic arsehole neo-cons in the US. China has always been admired for it's culture and it's contributions to technology and more recently for it's economic successes.

I am sure many western people would like to be able to speak chinese but it is so different to our own languages it is nigh on impossible for us to learn it, at least not without a huge expenditure in time which most people just do not have.
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« Reply #7 on: December 31, 2006, 07:18:10 AM »

That is so true, Art.

I have been here three years and when I speak, I still have great problems.

I also have not taken the time to study ... there are only so many hours in a day.

Yeah ... I know this all sounds like excuses and I am guilty of that however, it is said that the language takes 3 years of study to become fluent and the written language takes 6 years to get to the point of reading a newspaper. (It's damn near inaccessible)

Even something as simple as a menu is complicated by the fact that they tend to use 'artistic' descriptions that have no meaning outside the context. For example 'Ants crawling up a tree' is in reality noodles with black pepper. Yu xiang rou si ... Fish smell Pork ... Pork cooked in Fish spices. And then there is the ubiquitous 'squirrel shaped fish'!?

Those things we do 'understand' are complicated by the fact that We are messed up by translations from either our old scholars or the language being filtered through Guandong... Canton.

Try discussing Confucius with your average Chinese who has learned English for example. If they do know of him, they call him Gong fu si. Try to talk about the 'Art of War' by Sun Tsu and you'll get a blank stare.

Even try to discuss western popular films and you'll find the stars and the titles have been rendered impossible to decipher. Arnold Schwartzenegger ... Sylvester Stallone... Even Hepburn must be said with the right tones or one of the most popular western actresses here will be a mystery to them.

In Japanese, they tend to absorb English terminology and if they want to talk about a western addition to technology or influence, they will refer to things like hi-he-ru (High Heels), E-re-ba-tor (Elevator), Remon (lemon) and terebision. Telephone in Chinese is rendered Dien Hua ... Electric Voice. There is no absorbtion of foreign terms whatsoever.

What this does is reduce every foreigner to absurd 'mimes' of what it is they want... And how do you mime Confucius? (Bathroom is easy if you just cross your legs and point at your crotch or dance around a bit... That's if you can't remember that they were taught the old English term 'WC' (water closet) by some well meaning Jesuit Priest.

Some restaurants have seen the light and reduced menus to pictures however that nice pot of 'beef stew' does look appetizing unless you understand the waiter telling you it is DOG.

And then there is Chenglish ... their attempt to communicate with foreigners ... 'Incline lan for Deformed Man' is posted on the gate of Century Park in Shanghai. It's the 'Disabled Ramp'.

Most of us who have lived here for any length of time have seen renderings of English that will bring you to tears of laughter. I was in a hotel a few weeks ago in Beijing and saw a sign above the toilet, just beside the toilet paper, that said 'Use Skid Protection' (My brain just screamed 'Skid Marks' as in 'Use toilet paper'). What they meant was to use the rubber mat on the floor.

Now I know you're asking me why on earth I am quoting Chenglish in an attempt to explain the language difficulties ... Well, it's because the Chenglish is the literal translation of the Chinese. It's not simply learning a new word to replace the ones you already know. It often means learning a descriptive phrase that represents something. Not only that, if you use the wrong tone, you render the whole phrase incomprehensible to them... or worse. If you use the wrong tone when you are buying a pencil from a female clerk in a shop and you may just make an offer to buy her 'pussy'.

The word 'Ma' for example can mean Horse, Hemp, Mother, Interrogative Particle or an expletive.

The words Buy and Sell are the same ... Mai.

It's a freaking hard language and the Chinese just can't understand why we have a problem with it. After all ... their three year olds can speak it.

They have a tongue twister here made up of only two words 'si' and 'shi'. And they have 'pun' masters (cross talkers) who are basically 'stand up comics' who make fun of themselves by misunderstanding and mispronouncing words.

Then there is their trained monkey Da Shan; an irritating Canadian Fuck who has been learning the language for decades and then tries to teach it on TV. He calls his TV show 'Travel Chinese' or something and yet the only people I have talked to that have managed to get anything out of it have been living here for 20 years. And he seems to be the benchmark for the way we foreigners are all judged.

Then there is their irritating habit of asking the person who looks most Chinese at the table all the questions. My boss is Filipino. They talk to him. I answer and they still talk to him.

I have a friend in Beijing who does not speak Cantonese. We met in the UK and while there, we went to a Cantonese restaurant for Dim Sum. I lived in Toronto Chinatown for 17 years and know Dim Sum terminology quite well. The waitress comes over and asks him in Cantonese what we want and I answered, Pao Lei (Pu'Er) Cha, har gow, siu mai, wor'teip, char siu bao, cheung fun, dan tat, etc. She does not let her eyes stray from his face and asks him if there will be anything else. (he has not said a single word at this point) Then they bring me a fucking fork!!! I have been using chopsticks for 36 years now ... longer than she has been alive!!! (Some of my Cantonese friends went ballistic in Toronto when this was done to me there. They considered it the biggest insult they had ever seen and took a strip off the waiter who did it)

You're damned if you do and damned if you don't when you take on the learning of Chinese.
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« Reply #8 on: January 01, 2007, 02:37:24 AM »

 Grin Art and Smokie, a child can naturally and effortlessly absorb any language before the age of 9, then the difficulty increases with age.  Thank you both for your explanation, now I will know if a foreigner ever dismisses the language again, it's probably because he is too thick to pick it up  Grin


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Compared with Latin America, China had more favorable conditions when it came to reform and open-up and bettering the living standard and infrastructure.  But just as well she had to get her hands dirty and be very circumspect in the way she went about it.  I believe the Reform and Opening-up Policy was characterized by the fact that industries with comparative advantage (“IWCAs”) have been quite successful, thereby securing a steady source of income from international trade.  We have put our heads down and worked steadily to develop different levels of industry on the basis of comparative advantage.  We started off with the primary, moved up and sank our teeth into the secondary and tertiary.  We centered the development on competitiveness and would not protect any industries that we had resolved to develop.  Instead we struck a balance between opening up and protection, tempering overseas imports with self-invention.  When the time was right, we opened up (the market) and let the state enterprises, the foreign enterprises and the Chinese-civilian-run enterprises compete in a murderous and bloody dog fight.  The triumphant party was bound to be globally competitive.  This way we were able to secure a few industries that were competitive in the world as well as a steady source of income.  One of those industries used to be textile, then we had electric products, both immense in scale, a small portion of either could pillar up a small economy, China instead took the industries as well as related opportunities over without much exchange of civilities.

From there on, China becomes different from other developing countries.  They did not find an IWCA, and were preoccupied with all kinds of crisis.  Should there be any “wind blowing and grass moving”, calamity befell.  China instead has her IWCAs which form the base skeleton on which solutions and progress are made.  There is high development every year.  Where IWCAs are concerned, she is not different from the Four Little Dragons, as all have developed on the basis of comparative advantage instead of following the developmental economy of Latin America. China’s issues and problems are not any fewer than those in Latin America.  The divergence of the rich and the poor, as well as corruption etc, are more insidious.  She has little land, few resources, massive population and too many job seekers, all in all she is less well-endowed than Latin America.  Yet with her reliable industries, she has bigger hope than Latin America in overcoming these issues.  Where a country does not find an IWCA, it will normally resort to selling raw materials.  Of course unless a country is endowed with an unnatural streak of good fortune and oil and diamond can be scooped up everywhere, it is very vulnerable to wild fluctuation in prices.  In general raw material does not solve too many problems.  As a matter of economic principle, these countries have less way out than their industrialized counterparts.

China puts a lot of emphasis on industrialization as do the Four Little Dragons, yet there is a difference in the way they go about it.  The Little Dragons had to upgrade after a while, shifting production elsewhere.  They invariably found themselves caught up in tertiary production, high CPI and internal inflation, currency appreciation, virtual economy and consumption on credit.  This path leads to flipping and speculation and aligns itself to the developed countries.  For China, she engages in an industry and works her way up. Once she establishes a foothold, she will not let it go.  She does not get involved in speculation either.  What she is instead is a long-term low-price system.  This is a strategy that sets its eyes on production capacity, rather than quick success and instant benefit and firing up of nominal GDP.  Therefore, other regions have little point in aspiring to compete with her while she develops toward the direction of a global production base.  Given the robust economic growth since the Reform and Opening-up Policy, it is only natural that wages will go up as well, isn’t it?  Not really.  Instead China works to suppress the prices of consumer industrial goods.  There were a few wage increases but at a rate insignificant when compared to that of other countries. There has been in fact little increase in the wages of the population. Though in substance, there is a big rise in living standard.  Real estate underwent a bit of speculation and the government immediately stepped on the brake, because speculation is inconsistent with the government’s strategy.  Were we ever to throw ourselves into speculation though, then what with a general price hike and appreciation of RMB, our GDP would have long shot up into the sky.  But the government says no speculation, no appreciation, do honest work and produce industrial products for self-consumption, and export as much as we can.  Raw materials and advance equipment are two major components of our imports, and after going through processing at a few stages, they bring about added-value and favourable international trade balance.  Yet the favouable balance is becoming a bit of a problem, this is an unprecedented economic phenomenon in history.  There seem to be similarities with the Four Little Dragons, the developing countries and in terms the mode of international trade, with the developed countries, but there seem to be differences as well.

The appearance of a country like China, out of nowhere, has caught the developing countries, actually as well as the developed countries, quite unprepared.  When China went ahead with the depreciation of RMB in 1993 and 1994, there was little murmur across the world.  Nobody thought very much of it.  Actually it was a very “dark” (note 7).  I mean we were able to devalue so substantially in one go, it could be considered a sneak attack accomplished.  Should it take place nowadays, I mean as it is, people are already going ballistic just because we refuse to appreciate the Yuan, a heap of people will go ape shit were we to depreciate it instead. SE Asia as well as Latin America have found out that they are no competition to China – foreign capitals rush in, infrastructure gets better and better, chains of production congregate, there is “a war feeding a war”.  Over time a positive self-reinforcing cycle will form, and competition will be just out of the question.  The government has gone to extraordinary lengths and spared no effort to make it happen.  We are not talking about a tiny shortfall in competitiveness, we are talking about being driven out of the competition altogether.  To compete they have to build high-end infrastructure, assemble all related plants and have a multitude of high-quality and low-wage labour.  Not any one of these factors is easily attainable.  Mexico was hard-hit, and had been dragging her feet in consenting to China’s entry to WTO.

In fact were they to give up the hope of competing with China, they will find that it is not a bad deal at all, it could even be a pretty nice deal. If you think along this line, China is in fact the saviour of the developing countries.  First of all, there will be no more bending over backwards to gear up production. While vying and fighting for foreign investment and baring themselves for assessment, the developing countries have been hauled and shifted around and have brought upon themselves much disaster.  If they were to cut the idea loose, this sort of mishap as well as duplicate construction can be spared.  In addition, Chinese products are of good quality and guided by the cheap-price policy.  All sorts of industrial products are so much cheaper, you get a handful with just a few dollars, so the population are happy.  Judging from the consumption of various industrial products, the living standard of the developing countries has risen quite substantially although the GDPs see no marked increase. Lastly, as China’s demand for raw materials increases by leaps and bounds, so does its need for exotic non-staple food stuffs and tourism.  The price of raw materials is bound to increase without ever shrinking back. So they can rack up a positive trade balance just by selling special products and raw materials.  Their economy will be more stable and even the goal of providing a “comfortable livelihood” for the population will not be entirely unattainable.

Of course if you are less than happy with the arrangement, you are unlikely to accept it.  “What entitles you to engage in production while I be reduced to selling raw materials?”  But it is not difficult see the good sense of that arrangement.  India is now pretty much one of the few countries which are not happy with it.  SE Asia was unable to reconcile herself with it, but not after persuasion from China and having a taste of the benefits from trading with her.  The 10 +1 Asean Free Trade Zone is set up and (will be) formally running.  In no time at all it will be the most populated free trade zone.  I reckon it will be the role model for the free trading zones of developing countries.  India is slowly coming round to the idea.  Not only are any of its interests prejudiced by trading with China, she racks up a favourable balance.  While marveling at her powerful manufacturing sector, it is starting to feel that it’s quite a good deal to be working with China.  When Wu and Wang travel abroad to resource rich countries, they were revered like big moneybags and embraced like the moon by surrounding stars. China gives them a good bargain as well.  After all what have they gained from dealing with the developed countries previously? There is no exchange of equal values.  Instead China buys raw materials at high price and sells industrial products at low price, isn’t that great? What more can you expect?  Of course this is not to say China gets herself a raw deal. The truth is the prices set up by the developed countries are just too “dark”. How much have Huawei and ZTE slashed off the prices of international telecommunication equipment? Could developing countries not have taken notice?  The human heart is made of flesh, these countries will be holding onto their own views despite the China-threat theory being worked to a frenzy.  They will not want to be deceived any more despite the investment, donation and fanfare of the developed countries! Both Japan and S Korea relish the prospect of forming a free trade zone with SE Asian countries.  But there is no genuine intention and no real heart.  Now that China has achieved it, it does not necessarily mean that they will be automatically included in 10 + 1.  What is the point of their entry anyway? Neither Japan nor S Korea is populated and they will not be opening up their agricultural market, pretty petty.  What products they may have, have long been acquired by their joint ventures in China, so the minimum tariff system in the free trade zone can do little to them.  They are not like China.  When China says open up, she delivers.  If everyone in the country were to consume 2 ounces of longan (note 8 ), Thailand will have to busy herself with production for a long while.  China and the 10 Asean countries collaborating, what rosy prospect that will bring.  Both side will be enabled to consume by their own consumption. You buy my home appliance and I buy your raw materials and fruits, doesn’t it just have to mean economic growth?

The developing countries have come round to the idea.  The developed countries have not.  Isn’t this country with its USD1000 per capita GDP or thereabout, and GDP no more than that of Italy, destined to collapse over the long run?  Why is she achieving all these things?  It’s too hard to understand.

4)   Terminator of globalization?

(to be continued) 

Note7.  “Dark” could mean underhanded, calculating, insidious, wicked, evil, sinister plot, scheming and intrigue etc.   
Note 8.  http://en.wikipedia.org/wiki/Longan
« Last Edit: January 01, 2007, 02:40:04 AM by Polly » Logged

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« Reply #9 on: January 01, 2007, 07:48:52 PM »

I have a friend whose husband works for Huawei, and he is currently in Nigeria under the "Saudi Arabia and North Africa" division having worked in Malta and Spain and a country in Central Europe.  According to her, instead of asking if they are Japanese, local people are starting to ask if they are Chinese Cheesy

http://www.tdscdma-forum.org/en/news/see.asp?id=3814
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« Reply #10 on: January 02, 2007, 07:02:23 AM »

The Chinese are worry freaks, we are always“anxious about the country and anxious about the populace”.
lord give me a break. pity they didnt worry about the paddle fish now on its last legs (fins).

i spent thye whole weekend 'fencing' on a friends new farm. for the uninitiated it means building new fences for the paddock to keep the cows in. it inviolves millions of cuts on the body from the barbed wire, dodging snakes, spiders (there were millions of the buggers and big too)http://www.amonline.net.au/factSheets/huntsman_spiders.htm
now i know the bastards are harmless but they are big and hairy and scare the bugger out of me when they run across the arms.

went swimming in the river which was nice. broke speed records on the motor bike, cooked a ripper thai salad
http://www.thai-info.net/thaifood/somtam.htm with grilled chicken over charcoal , magnificent though charcoal is a pain to start and continue.
drank some red wine at this vineyard
http://www.heathcoteestate.com/about.asp
explained to the owners and my friends that all wine drinkers are dick whackers with too much money, it didnt go down well, or as well as the best beer in australia
http://www.cascadebrewery.com.au/home.html
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« Reply #11 on: January 02, 2007, 07:37:07 AM »

the white tailed spider. a harmless looking bugger came to prominence in the early 1990s when it was suspected of causing shocking bite injuries (necrotic ulcers)
http://www.xs4all.nl/~ednieuw/australian/Lamponidae/Lamponidae.html
the jury is still out on it but they are in almost every house in victoria and i take delight in hitting them with my shoe.

http://adelaidegraham.tripod.com/clinic.html
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« Reply #12 on: January 02, 2007, 08:02:24 AM »

came across this snake down by thye river.
the red bellied black snake. they arent as poisonious as the tiger or the brown but they are bigger which makes them worse in my eyes.
i have been attacked by tiger snakes a few times eventhough they are the smartest and generally get out of the way as quick as possible when they hear you coming.
i am paranoid about snakes so generally pretty quick in seeiing them but about five years ago almost stood on a big tiger snake in short grass (and i mean it was very short had just been cut) and it blended in perfectly.
naturally i came across this black snake when i was hung over on monday morining by the river. he was lying on a tree stump taking it easy and i saw him in plenty of time but if you get between them and their nest they go off like a dunny door in a hurricane.
http://www.avru.org/general/general_redbellied.html

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« Reply #13 on: January 02, 2007, 09:29:14 AM »

smokie i disagree on this language stuff. i learnt one night a week for three years (2 1/2 to be precise).
first year (and tjhis goes on now in most western countrys i have told) they stayed clear of characters to ease u in to it.2nd year we learnt characeters as well, very slowly like 3 a week by mid year i was doing up to twenty characters a week. thrid year i taught myslef as most students can do when at that stage. in china i had a workmate who would come to a teahouse with me on friday arvo for a couple of hours and we would actually have a good time learning.

you only need 300 characters to read almost every street sign, and most of a newspaper and get the gist of what the story is about.
i had those same situations where i would be ignored but on most occassions i found people were rapt that i could speak some of the language. in fact i found it much much (and i mean much) easier to talk to an uneducated person who spoke no english than some person who thought they could. i had a few expereinces where if the waiter didnt understand me or didnt want to they would call over the token person who spoke less engliosh than i spoke chiense and it would be a struggle. taxi drivers were great to learn from. i would often have some lines perepared for them.kids were great too because they had no accent in the way they spoke and their vocab was limited.
i actually found that the longer that a foreienger lived in china the less likely they were to be able to speak chinese , which i found strange. i know having just been in thailand that it is an extremely isolating not being able to speak a language.
the great thing about chiense is that because it is so hard to learn other languages become easier.
i reckon that as a computer head smokie who has to know the jargon of computers if you approached it strategically you would nail it. i really think though that to learn it you need to go to classes as it is too dificult to leanr on own with self study. this is a problem because chinese language schools are crap and the universities are a joke. i investigated in doing chinese at a uni but it is a con and most uni studnets are unhappy with the standard and the rote learning, ie a teacher standing in front of class saying word over and over. and dont get me started on chinese text books from china. shocking.
you are lucky that you are in tianjin where they speak good chinese. i found shandong people also speak grerat chinese too.

i think this is a text book i have used
http://us.st11.yimg.com/us.st.yimg.com/I/chinesemall-com_1928_25222288

i stayed at a chinese hotel in thailand and the owners , this spunky woman whose father was chinese told me i spoke chinese like a communist, funny that.

this book is a cracker. it is an old chinese text book that i learnt and was a killer. it is famous with chinese language students and involves gubo and palanka

book one starts with their parents
"wo baba shi daifu"
wo mama shi laoshi"

http://www.beijingscene.com/v07i010/comrade.html
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« Reply #14 on: January 02, 2007, 11:00:07 AM »

That Beijing Scene thing is absolutely hilarious.

It's like something you would write with correct punctuation and spelling though.
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