@ Dr Core

Were those Chinese projects really overcapacity? I find economics these days is too concerned with a monetary value. Economics is not money, it is resources and the effective use of resources and hence positive and negative externalities.

Hence from this approach 'The Great Wall' may have had a positive ROI when non-monetary externalities are included. For instance, if the population felt safe from being raided then they logically would have lived more settled lives,increasing the population, the productive capacity as well as increased trade. So that a project undertaken for propaganda reason could have a positive economic ROI. Not really over-capacity.

However, assuming the theory that the population on Easter Island was decimated by over use of wood cutting is correct then this provides evidence of the negative impacts of over capacity on the economy and in this case physical survival of the society.

Your question concerning what is wrong with the West is apt. We can conclude that it is due to short term politics, the reduction of competitive advantages a lack of savings that could hurt investment in the medium to long term. Taking a rather odd ball perspective, could it be a case of human nature. It seems economies also rise and decline eventually, China on many occasions, Japan, Holland, the Bitish Empire. But why does this happen, possibly because humans are mortal and think short term by nature, as a economy and hence a society matures it loses its advantages to more risk-free, adaptive and flexible societies. Technology generally wouldn't change this, possibly a cheap, inexhuastable energy supply.

What happened when Holland lost its competitive advantage in Whale oil and finance. My understand (which isn't to great) is that it didn't collapse in some attempt to maintain its dominant position to England that was undergoing the industrial revolution. Myabe the West should conserve its resources and society; consolidation until its society has the energy and ability to re-invent itself by taking a constructive view towards future technologies. Ofcourse betting on future technologies is risky by there are a few that would definitely enable massive economic growth, robotics, genetics, nano-technology. Since the internet there hasn't been any world changing technologies hence money that should have been saved and hence invested in or until new economy changing technologies was invested in short term and illusionary growth. Asians generally have done better in this regard but they will face these challanges aswell.

Infiniti wrote:
Were those Chinese projects really overcapacity? I find economics these days is too concerned with a monetary value. Economics is not money, it is resources and the effective use of resources and hence positive and negative externalities.
Broadly I agree with you. But on overcapacity, it's the explicit reason behind the many "cooling" measures taken by Beijing, and there's no reason to doubt their honesty on this regard.

But there are overcapacity and overcapacity. On civil infrastructures, driven mainly by provincial and national governments with central planning, I have some faith that the planning had been sound. It would surprise me to find, say, some 7-lanes highway to nowhere with no cars on it.

On private infrastructures, low cost export-oriented manufacturing, concrete and steel production, commercial and residential construction, and the "new thang" tourism, driven by private investors looking for quick profits, I think there is huge overcapacity pressure. And Beijing has been actively intervening in the market.

the population on Easter Island was decimated by over use of wood cutting is correct then this provides evidence of the negative impacts of over capacity on the economy

That's dead wrong. The lesson to learn there is nothing about economy, but that you reap what you sow. If you put the religious priesthood in charge, you get the self-fulfilled prophesy: end of the world. Which is what you are getting with the West: you put people who believe in the END OF THE WORLD in charge.

economies also rise and decline eventually, China on many occasions, Japan, Holland, the Bitish Empire. But why does this happen, possibly because humans are mortal and think short term by nature, as a economy and hence a society matures it loses its advantages to ...
Congratulations, you just discovered Taoism. Or at least, you discover the "original problem" for which Taoism seeks a solution.

The first line of the Taoism classic reads "The Tao (way, or solution) that could be described, is not the constant (true) Tao." I.e. any ideology or religion that can be described in a holy book or textbooks or lectures of sermons are not universal truth that can be applied everywhere and every time. In particular, Market Economy is not the be-all-&-end-all, and proclamation of "End of History" is highly premature.

What happened when Holland lost its competitive advantage in Whale oil and finance. My understand ...

I have my little pet theory why the Dutch gave way to the English in turn gave way to Americans and why Americans and along with it about 500 years of Christian-Anglo-European hegemony is in its last throes. Whether it ends, as prosthesized in the bible, in Armageddon, or as wished for by China and most of the world, in a new multipolar and/or superpower-less world order, is yet to be seen.

Myabe the West should conserve its resources and society;
Your counsel is wise, but no one is listening.

The basic thread here pertains to China's "permanent advantage" in infrastructure. However, as history verifies, "a permanent advantage in infrastructure" fundementally depends on the ideology that created it. So the question is this: Does China have an ideology that will actually give it "permanent advantages?"

As far as I can determine, China is properly defined as 1 of 3 below:

(1) A Fascist state,

From Wikipedia: en.wikipedia.org/wiki/Fascism

Fascism, is a radical and authoritarian nationalist political ideology. Fascists seek to organize a nation on corporatist perspectives; values; and systems such as the political system and the economy. Scholars generally consider fascism to be on the far right of the conventional left-right political spectrum although some scholars claim that fascism has been influenced by both the left and the right. Fascists believe that a nation is an organic community that requires strong leadership, collective identity, and the will and ability to commit violence and wage war in order to keep the nation strong. Fascists identify violence and war as actions that create national regeneration, spirit and vitality. Fascists claim that culture is created by collective national society and its state, that cultural ideas are what give individuals identity, and thus rejects individualism. In viewing the nation as an integrated collective community, fascists claim that pluralism is a dysfunctional aspect of society, and justify a totalitarian state as a means to represent the nation in its entirety. Fascists advocate the creation of a single-party state. Fascist governments forbid and suppress openness and opposition to the fascist state and the fascist movement. Fascism rejects and resists autonomy of cultural or ethnic groups who are not considered part of the fascists' nation and who refuse to assimilate or are unable to be assimilated. Fascists consider attempts to create such autonomy as an affront and threat to the nation.

(The above defines and describes China perfectly.)

(2) A Bolshevik Corporatism,

(3) A pseudo-Communist Totalitarian state.

1-3 above do not confer "permanent advantages." In fact, as history verifies, 1-3 above are all utter, complete, total disasters in the making.

So is there ANY description of China other than 1-3 above? This is a serious question.

Bronc

Well, since we've moved from Asian infrastructure to opium, tea, and more general economic issues, I'd find it hard to justify moving Broncazonk's latest to a different thread. This one is also posted in the "China's 'advantage'" thread (here, www.atimes.net/The-Edge/Greater-China/17...dvantage.html#173861 ) and I'd appreciate it if, for the sake of neatness and DrCore, general discussion about China's socio-political-economic situation took place there. But I won't be fascist about it.

AQ

Apologies but I prefer to participate in this forum only - going back to the original idea of interacting with readers directly. By all means everyone can move their discussions to other forums, of course.

Bronc

Your question is fundamental to the sustenance of a 'permanent advantage' ... having said that, there are a few points to consider:

a. It is, in my opinion, fundamentally flawed to evaluate Asian societies through a Western prism. Calvin's individualism doesn't run deep in Asian society (by which I include India, by the way), but has instead given way to people identifying themselves through groups or more pertinently as members of a larger social unit. This distinction is important because it helps one to understand whether managing these societies is necessarily done through Western notions of 'democracy', and even if such democracy prevails, will it represent the true ideas of the same. Neither Asia's most prosperous democracy, Japan, nor its biggest (indeed the world's biggest) India can be substantially said to represent "true" democratic values in the Western sense. In both cases, what passes for democracy is an organization of economic "tribes" jousting one another. The LDP has been in power forever in Japan and the Congress in India. The DPP is now in power in Japan but yet cannot make any substantial changes to the entrenched system.

In that light, what China (and to a lesser extent Vietnam) represent is a different form of political organization that isn't truly fascist or communist or indeed totalitarian. The definition "Communism with Chinese Characteristics" comes closest to the notions of the system.

The 'benevolent dictator' model championed elsewhere in Asia - in another alleged democracy by the way - has transitioned into a 'Responsible Oligarchy' model in China in the post-Mao period; Russia has sailed the same route but in their case the Oligarchs are ALSO economically powerful which in the case of China they are NOT necessarily.

Lastly, the key question to ask is - how many Chinese do you know who are allegedly clamoring for Western-style democracy? Lets be honest about that ... and if they are NOT, then who gets to determine that they actually NEED it? The US experiment of imposing democracy in Iraq hasn't gone terribly well now, has it?

b. Your definition of fascism, while interesting, play to the Fox News gallery and their feelings for China. My own view is that Middle-Eastern states are better representatives of fascism in Asia, even though they operate under the cloaks of monarchy.

c. I concede that a sustainable political system is central to the notion of continuing a relative advantage i.e. the ability to make it permanent. The point I am making is that just because one doesn't fully understand the system in a part of the world, doesn't necessarily doom it to extinction.

CA

Chan Akya wrote:
AQ

Apologies

No problem Chan, this wasn't a criticism directed at you. This IS your part of the forum, and a very good one it is too. I don't expect you to be responding to users elsewhere and I understand that users want to interact with you.

The only posts I'd move are those that have nothing to do with you. It might be a good idea, though, to start new threads within the Chan Akya category, [ALL, TAKE NOTE] for discussions that are completely separated from the original topic/article. Otherwise, there's not much point having threads (apart from a technical one involving atimes.net), but if Chan Akya gets much more popular, things will get unwieldy.

aquicke wrote:
Chan Akya wrote:
AQ

Apologies

No problem Chan, this wasn't a criticism directed at you. This IS your part of the forum, and a very good one it is too. I don't expect you to be responding to users elsewhere and I understand that users want to interact with you.

The only posts I'd move are those that have nothing to do with you. It might be a good idea, though, to start new threads within the Chan Akya category, [ALL, TAKE NOTE] for discussions that are completely separated from the original topic/article. Otherwise, there's not much point having threads (apart from a technical one involving atimes.net), but if Chan Akya gets much more popular, things will get unwieldy.


"If Chan Akya gets more popular..." ... having just quoted Calvin early my morning, I find it difficult to juggle between my coffee and Kierkegaard's existential dilemma now ...

I thank Chan Akya again for replying to my questions.

By way of explanation: I do not consider the political system (as it now exists) or the various political ideologies (as they now exist) in United States to be positive examples for the rest of the planet. The political system is broken in the United States (in any number of ways) and there may be fundamental defects (the Electoral College) in addition to that. Without serious (and immediate) political reforms, the United States will soon be unable to govern itself. In Europe, the EU's "super-government" experiment has also failed, miserably, offering nothing except bureaucratic absurdity and "politically-correct" totalitarianism.

Therefore the question of whether China has hit upon a political ideology that offers true advantages is an intellectually honest one. Now my response to CA's reply.

CA writes, "It is, in my opinion, fundamentally flawed to evaluate Asian societies through a Western prism. Calvin's individualism doesn't run deep in Asian society (by which I include India, by the way), but has instead given way to people identifying themselves through groups or more pertinently as members of a larger social unit. This distinction is important because it helps one to understand whether managing these societies is necessarily done through Western notions of 'democracy', and even if such democracy prevails, will it represent the true ideas of the same. Neither Asia's most prosperous democracy, Japan, nor its biggest (indeed the world's biggest) India can be substantially said to represent "true" democratic values in the Western sense. In both cases, what passes for democracy is an organization of economic "tribes" jousting one another. The LDP has been in power forever in Japan and the Congress in India. The DPP is now in power in Japan but yet cannot make any substantial changes to the entrenched system."

Bronc replies: Hiding behind the expediency of cultural relativism is an admission of the inherent defects of an ideology. An ideology that truly offers "permanent advantages in infrastructure" has no need to whine about "racism" and no need to hide behind cultural relativism. A truly powerful ideology jumps at the chance to be compared against other ideologies. It encourage a free exchange of ideas, a free press, a free academic environment, a free political system, because truly powerful ideologies have nothing to fear from the comparison. (They actually benefit by making the comparison.)

There's an ancient saying in China going all the way back to Lao-Tzu and it goes like this: If it walks like a duck, quacks like a duck and swims like a duck--it's a duck. The system in China walks like, quacks like and swims like a Fascist state and no amount of "but you don't understand the Eastern mind" horseshit is going to change that. Furthermore, if anyone in the CCP truly believed the fascist system in China offered "permanent advantages in infrastructure" they would be encouraging a free exchange of ideas, a free press, a free academic environment, a free political system, because that's what truly powerful ideologies do.

So from now on CA, when someone says, "China is a bunch of pseudo-Communist totalitarian fascists." You should be saying,"Hell yes, China is a bunch of pseudo-Communist totalitarian fascists, because pseudo-Communist totalitarian fascism offers all of the following fantastic advantages..."

CA writes: "In that light, what China (and to a lesser extent Vietnam) represent is a different form of political organization that isn't truly fascist or communist or indeed totalitarian. The definition "Communism with Chinese Characteristics" comes closest to the notions of the system."

Bronc replies: Karl Marx-the father of Communist philosophy-was a German man who spent most of his adult life in the coffee shops of Paris, Brussels and London, and when given a map couldn't have found China if his life depended on it. Vladimir Lenin was a Russian man who spent most of his adult life in the coffee shops of Zurich and Paris, and he couldn't find China either.

Communism is an invention of Western thought--China and "the mysteries of the Eastern mind" had nothing to do with it. Furthermore: Confucius would have considered Communism to be a repugnant and repulsive ideology. There is simply no doubting these facts.

The point is this: Communism is a Western invention best understood by the Western mind and to put it bluntly CA--if you think Communism offers "permanent advantages in infrastructure"--you are completely out of your mind.

Fascism is another Western invention that is really, really good at building infrastructure--that's one of its hallmarks--but its really, really bad at keeping it--and that's also one of its hallmarks.

CA writes, "The 'benevolent dictator' model championed elsewhere in Asia - in another alleged democracy by the way - has transitioned into a 'Responsible Oligarchy' model in China in the post-Mao period; Russia has sailed the same route but in their case the Oligarchs are ALSO economically powerful which in the case of China they are NOT necessarily."

Bronc replies: 'Benevolent dictator' and 'Responsible Oligarchy' were terms invented by fantasy fiction writers who couldn't find jobs selling books about hidden treasures and magic dragons. Are you kidding me? 'Benevolent dictator' is the second most absurd oxymoron in all of history--the first being:
'Responsible Oligarchy.'

CA writes: "Lastly, the key question to ask is - how many Chinese do you know who are allegedly clamoring for Western-style democracy? Lets be honest about that ... and if they are NOT, then who gets to determine that they actually NEED it?"

Bronc replies: Don't be so sure. China is a totalitarian Fascist state without a free exchange of ideas, a free press, a free academic environment, a free political system, etc. Furthermore, the events in 1989 in Tiananmen Square belies your contention: people were willing to die for a breath of freedom.

As a matter of undisputed historical fact: China was given a once in a millennium opportunity by the United States to become a preferred trading partner so the people of China would have the opportunity for a better way of life. This gift was conferred on Chinese people by the American people with one condition: that China will quit its pseudo-communist-fascist-totalitarian ways and move towards "Democracy with Chinese Characteristics." It seems however that the 'benevolent dictator' and 'responsible oligarchy' who run China have forgotten this promise.

For the past 160 years Chinese intellectuals and political leaders have been consumed by two words: fu (wealthy) and qiang(strong). Translating that into Western thought:"Greed" and "the quest for power" do not offer permanent advantages in infrastructure. The CCP has made a Faustian bargain with the Chinese people AND the Chinese people have made a Faustian bargain with themselves in the hope of being fu and qiang. In short, having China selling China out for a lot of shoddily constructed infrastructure is going to end in certain tragedy.

Bronc

Chan Akya wrote:
[quote]Why did the British peddle Opium?

When all other explanations fail, the simplest one - even if unacceptable from the moral perspective - must be true. In other words, they peddled opium because it was the only product where they had a competitive advantage against Chinese traders (and manufacturers), having access to the "Sea of Poppies" in India. Another way of putting that answer is that the British mores didn't extend to people of other races ...

Competitive advantage?

Chan, I have long had the impression that you are not so strong as a historian as you appear to be as an economist.

I believe that the British would have much preferred to sell the entire gamut of mundane goods pouring out of the factories and mills of Britain at the time: bearing in mind that this was the Britain of the industrial revolution - the only country of the day that had undergone this sort of socio-economic transformation. British machine manufactures could had have cost-effectively offered Chinese buyers an alternative to hand crafted locally made goods had these been allowed into the country. But of course the Chinese did not play fair. I(mperial Chinese governments had a flat policy kinown in German as autarchy - utter national self-sufficiency - if we cannot make it or grow it ourselves we do without.

I have read that in the 18th century Imperial China insisted that all "foreign barbarian" merchants pay for Chinese goods (tea, silk etc) in precious metals, especially silver - the Middle Kingdom seems to have had a derth of silver orebodies. Understandably, it created a drain on Western precious metals resources (bearing in mind there was not even one decent sized silver mine in the whole of the British Empire).

Read up on the outcome of George MJacartney's (1793) expedition ot Beijing:

en.wikipedia.org/wiki/Macartney_Embassy

For the sake of an item of stuffy Chinese court protocol, the Emperor Quinlong blew a golden opportunity to reach an amacable agreement with the emerging European power of the day at a time when all Western powers held China in high regard. To the best of my understanding opium was not on Macartney's trade agenda.

The British (or rather their (East India Company) began selling smuggled opium because it was compact, high value and easy to smuggle across frontiers. They did so because Chinese policy excluded legetimate Western cargos.

Competitive advantage against Chinese traders (and manufacturers), you say? Don't make me laugh, Chan. Qing
merchantile policy make bloody sure that Western traders and manufacturers had no competitive advantage!
The real problem as I see it lay in Chinese hubris: the practice of tagging all foreignors as "barbarians" (a habit that even now not all Chinese have given up) based upon unwqonted supopositions of Chinese cultural and racial superiority. We have an old christian truism "pride cometh before the fall". How true of China!

So Chan, whilst I cannot and do not condone Britain's subsequent strong-arm imperialism or it's record as drug pusher on prostate China, I would suggest that by beinjg so closed-minded to the possiblity that another civilisation may have by the early 19th century equalled or even exceeded their own in overall attaimnents, China invited its subsequent troubles down upon itself! It had effectively confirmed its own prejudices by turning the Brits (and other Western merchantilists) into the very barbarians they assumed they were.

"As you sow, so shall you reap!"

Alright, here goes again

MW

- Sorry but I don't buy the whole "industrial revolution produced a competitive advantage" malarkey. The people of China and India were used to better QUALITY products than what the mills of England could produce.

- If you read Indian history (more) carefully, you will find that the British punished weavers who produced fine cloth, essentially forcing them to leave the business altogether. This was done progressively, and was the main reason why Gandhi chose the spinning wheel as the symbol of resistance to the British (with the more productive looms broken, he pushed Indians to passive resistance with the low-technology wheel)

- in the case of China, your point about British competitive advantage reads very similar to the complaints of Lee Iaocacca and other Americans about the alleged Japanese barriers to entry for American cars. And yet, they refused to make any cars with the steering wheels on the right (rather than the usual left), nor designed the smaller cars that were favoured by Japanese buyers. There were few products that the British excelled at which had ready demand in China.

- Hence the use of opium to balance the trade between the two countries.

Bronc

I remain amazed (and more than slightly disturbed) by your one-sided view of things in China. Like all countries, there are specific issues within China, and certainly it is NOT a place that a typical non-Chinese would consider (or easily could consider) as "normal" in the Western sense of the word.

That said, my point is that all criticism of China MUST be balanced by the terrific advances made by the country. You might call the 100-floor building now sitting in the place of a rice paddy 20 years ago a 'bubble' - but it is also a stunning achievement for the country itself.

Unlike the case of Dubai which leveraged itself to the hilt and depended on foreign funds / workers / tenants / buyers, in the case of China the infrastructure bubble has been LOCAL funds / workers / tenants / buyers (by and large in the case of buyers). Add to that the stunning infrastructure improvements of the past few decades, and it is virtually impossible (in my opinion) to ignore the progress made by the country.


My views in the matter were recently echoed by Gideon Rachman writing in the Financial Times, about "bubble or not, China's rise is real".

CA