In case anyone has no place to go as the holiday winds to a close….

Something to chew on:

The global economy will slow close to a halt this year as more than $2 trillion of bad assets in the United States help sink economies from Russia to Britain, the International Monetary Fund said Wednesday.

Bank losses worldwide from toxic U.S. assets may reach $2.2 trillion, the IMF said in a report, more than the $1.4 trillion that the fund predicted in October. World growth will be 0.5 percent this year, the weakest postwar pace, the fund said in a separate report.

The reports signal that write-downs and losses at banks totaling $1.1 trillion so far are only half of what’s to come and that already contracting economies may worsen. Advanced and developing countries need to be “even more supportive” of demand than they already have been, with lower interest rates and fiscal stimulus, the lender said.

“Unless stronger financial strains and uncertainties are forcefully addressed, the pernicious feedback loop between real activity and financial markets will intensify, leading to even more toxic effects on global growth,” the IMF said.

I remember one commenter saying snarkishly, “The sky is falling!” Well, guess what?

He must feel pretty dumb today.

Don’t mean to sound like a broken record – I know we’ve talked about this many times. But the situation is worsening in the US and making it even more obvious than before that we’re on the verge of a new world order as America becomes, in the words of a friend I had dinner with last night, “a banana republic with nuclear weapons.” Based on the rapidly deteriorating situation in America, this merits a healthy clip:

While the rest of the world is grappling with the global slowdown, China is figuring out ways to exploit it.

Over the past few months, China has capitalized on the financial turmoil that has paralyzed the world’s “developed” economies by stocking up on cheap commodities, weeding out competition to its largest state-run companies, and acquiring even more foreign assets.

Indeed, with China’s economic growth projected at an enviable 8% for this year, that country’s government has been able to spend less time promoting immediate growth and liquidity, and more time preparing for the economic renaissance that almost certainly seems to be the Asian giant’s destiny.

By exposing Western free-market capitalism, undermining the United States economic clout, and eviscerating commodities prices, China is using the financial crisis as the perfect opportunity to advance its domestic agenda.

That agenda begins with the recently unveiled $586 billion stimulus plan – a plan primarily focused on infrastructure.

China’s financial institutions have little or no exposure to the toxic subprime assets that spawned this current global crisis. Thus, instead of having to spend hundreds of billions of dollars to bail out its banks, China can choose to develop the stage on which it will display its future economic might.

And the first phase of that plan is key: Before its plans for a massive infrastructure overhaul can be realized, China must first load up on the raw materials crucial to its execution.

We all know the impossible problems China is facing, and that 8 percent growth (which some call a rosy prediction) is a big drop that will have painful impact. We all know it’s killing its environment and repressing those citizens who can’t fight back. And we all know that the US economy is entwined with China’s, meaning more pain is inevitable. But there are differences and there are reasons why China holds an advantage for the future. The engineers at the top of the party know what they want to do and don’t have to deal with messy thing like pluralism or individual rights, so whoever gets in their way can be quickly and (relatively) easily silenced. What they want to do now is seal deals for the future, giving China more global leverage and creating a new balance of power.

We’ve been hearing about the imminent collapse of China for ten years. I was on that bandwagon in 2003. But as all the bad news keeps accumulating and everyone finds links that guarantee China has to collapse, somehow it keeps going and in some ways even gets stronger. Like in cementing its relations with Africa and exploiting the depression to make bargain-basement acquisitions that will ensure badly needed natural resources in the future. I know, I know – China’s totally fucked. But they’re less fucked than the US and Europe. And that is what will leave them in a cozy spot after the carnage is over, perhaps years from now.

Meanwhile, I hope everyone’s watching where gold has gone since I first recommended it, when it was under $650 an ounce. Think about where’d you’d be today if your 401K money had been invested differently. The dollar simply has to fall, and as the dollar falls, gold…. Please take a look at this if you still doubt. This issue is relevant to China, which is already quietly looking for other places to invest its money.

The Peking Duck himself is interviewed over at Ryan’s splendid site about why/how he left the US to came to Asia, why he left Beijing early in 2003, where he went next, how he came back at the end of 2006 and whether he has plans to leave in the future. I also briefly reflect on the state of the current government and what I’d like to see it do to improve. For those of you who don’t yet know much about your host and who have nothing more important to do this weekend, please be sure and have a look. I

Thanks to Ryan, who of course helped give this site the facelift it so badly needed last year, and for providing the opportunity to share with his readers stuff I normally say little about over here. Please do have a look.

[Note, at 11.30 the next morning: I wrote this post at 4am and meant to save it as a draft, to put up in the morning. Never blog after 2am. I edited it down.]
.

A wonderful post by a China historian, inspired by a conversation with a Chinese friend:

Today YJ and I were discussing for the 1000th time the Τιbetan question and I suggested that my disdain and distaste for the Party line (and its supporters and parrots at home and abroad) had little to do with their opinion or right to hold such an opinion, but rather that the claims this group tended to make were of a different intellectual tradition than my own. The “Τιbet always has been, always will be part of China” crowd are starting from a point of certainty and proceeding to mine the past to create a narrative in support of that predetermined certainty. Complexity and nuance need not apply.

I’m not disputing the assertion “Τιbet is a part of China” or even “Τιbet was historically a part of China,” just that such assertions are built on unstable ground. The problem of Τιbet involves highly complex questions of sovereignty, authority, national identity, (de)colonization, and the evolution of empires into nation-states. Even the very definitions of these ideas, never mind how such ideas were understood in the past, are subject to discussion and debate. Thus the above assertion on Τιbet isn’t “wrong,” but the glassy-eyed certainty with which it is uttered and the narratives which support it deserve to be unpacked and the constituent parts looked at carefully and critically. For me, the counter to “Τιbet is part of China and history says so” is not “Τιbet is not part of China and history says so” but rather “How can you be so sure? Did you look at it this way?”

It then examines how historians’ minds work when it comes to reaching conclusions that then go on to become mainstream. shibboleths. This is not really a post on Tibet, but on drawing historical parallels in general. Its conclusion certainly got me thinking:

Indeed, the rhetoric of same sex marriage and gays serving the military disturbingly resembles the rhetoric against miscegenation and mixed-race army units in the 20th century. Similarly, the suggestions that PRC control of the Tibetan plateau was a strategic necessity, a humanitarian mission of liberation, or a benevolent paternalism which brought “modernity” in the form of hospitals, schools, and infrastructure to the benighted locals is fiendishly close to the justifications used by European and American imperialists in centuries past (and recent years).

Ouch. Please go read it all.

This topic seems to have see-sawed in and out of the news. This piece in today’s WaPo indicates it may not be dead in the water after all.

When Tang Xiaozhao first saw a copy of the pro-democracy petition in her e-mail inbox, she silently acknowledged she agreed with everything in it but didn’t want to get involved. Tang, a pigtailed, 30-something cosmetology major, had never considered herself the activist type. Like many other Chinese citizens, she kept a blog where she wrote about current events and her life, but she wasn’t political.

A few days later, however, Tang surprised herself. She logged on to her computer and signed the document by sending her full name, location and occupation to a special e-mail address. “I was afraid, but I had already signed it hundreds of times in my heart,” Tang said in an interview.

Hers is the 3,943rd signature on the list that has swelled to more than 8,100 from across China. Although their numbers are still small, those signing the document, and the broad spectrum from which they come, have made the human rights manifesto, known as Charter 08, a significant marker in the demands for democracy in China, one of the few sustained campaigns since the 1989 Tiananmen Square protests. Those who sign the charter risk arrest and punishment.

When the document first appeared online in mid-December, its impact was limited. Many of the original signers were lawyers, writers and other intellectuals who had long been known for their pro-democracy stance. The Chinese government moved quickly to censor the charter — putting those suspected of having written it under surveillance, interrogating those who had signed, and deleting any mention of it from the Internet behind its great firewall.

Then something unusual happened. Ordinary people such as Tang with no history of challenging the government began to circulate the document and declare themselves supporters. The list now includes scholars, journalists, computer technicians, businessmen, teachers and students whose names had not been associated with such movements before, as well as some on the lower rungs of China’s social hierarchy — factory and construction workers and farmers.

That bolded section is the money quote. Thus far, fenqing commenters like HongXing and Math have derided the petition using the same technique as American nutters — i.e., claiming it’s a product of “elitists,” of brainiacs who are far from the common people. This separation, they insist, will inevitably cause the issue to fade out. I admit, I thought they were at least partly right, that the initiative would fade away, if only because it quickly fell out of the news.

Now it seems to be creeping back. I think we all know how social issues can take on steam in China once they strike the right chord. It’s way too soon to say if that can still happen with Charter 08, but a few stories like this in media that Chinese people read have the potential for a firestorm. (A few days ago Bei Da thought it was enough of an issue that they forbade students from signing the document, which could also backfire.)

Tang Xiaozhao became famous a few weeks ago when her blog posts on Charter 08 were deleted as fast as she could open new blogs. But not before the posts made a difference.

Before her blog was shut down entirely Jan. 13, the comments section was filled by online friends who said they had signed Charter 08. Tang counted 17 so far.

“I also signed,” one person wrote. “I cried when I knew Xiaozhao had cried. I wasn’t moved to tears by her tears, but I cried out of frustration and helplessness.” Another saw hope in the censorship: “They wouldn’t have been deleting posts in such a crazy manner,” he wrote, referring to Chinese authorities, ” if they were not scared.” A third person said he “prepared my clothes right after signing my name. I am ready. I don’t want to go to jail, but I am not afraid of going to jail.”

And two days ago Time magazine printed an interview with Bao Tong, “a top aide and speechwriter for the secretary of the Chinese Communist Party in the 1980s” who now “lives under virtual house arrest, his every move observed, every visitor screened by a handful of guards, every conversation presumably monitored.” He was a key architect of Charter 08 and is not going at all gentle into that good night.

Chinese officials have said that now, when the country is straining under the growing pressures of the global downturn and spending billions to help create jobs, is the worst time to call for democratization. Bao argues that economic challenges need to be met with political adaptations as well. “Because we have an economic crisis, we need to bring the people together,” he says. “We can’t take every difference and dissatisfaction and let it intensify. Human rights, democracy, republicanism — these help eliminate conflicts, not intensify conflicts.” For now the country’s leadership is content to let Bao and China’s other democracy advocates stew in anonymity, and hope that once again the Party can grow its way out of trouble.

So China has once again succeeded in creating a martyr, someone the international media can use as a hook for more stories on Charter 08. Not a great strategy.

Finally, ESWN has contributed to this week’s wave of Charter 08 buzz with a spirited new post, part of which I must take issue with. He makes comparisons of the spirit of demonstrators in 1989 with that of the Charter 08 movement today, and says a crucial difference is the Chinese people today have more knowledge of what democracy is and what it brings, thanks to the Internet.

When CNNIC started to count in 1997, there were 630,000 Internet users in all of China. By the end of 2008, the number was almost 300 million (or about 19% of the entire population of China). What might people learn from the Internet, especially about this thing known as democracy? They can easily find out what happened during the presidency of the democratically elected President George W. Bush of the United States of America from 2000 to 2008. These events are known, circulated and discussed in China. Here they are:

He then goes on to list the handling of Hurricane Katrina, Abu Ghraib, the deaths and maiming of Iraqi children and other Bush atrocities. But aren’t people smart enough to know they can’t point solely to what Bush did in his eight catastrophic years and then say, “Look – look at what democracy holds in store for you”? Bush was an aberration. Can we look at this period and say it’s representative of Western democracy? If so, democracy is an unbridled failure, a disaster, a blight.

Roland’s point may be that since it was during the Bush years that Internet usage in China soared, this was all that many of their citizens have seen of Western democracy, and thus may think twice before risking their necks to argue for its adoption in China. But if this were so — if Chinese people see democracy as a disaster because they watched Bush ruin the world on the Internet — then there’d be no Charter 08 and Tang Xiaozhao would be ignored.

I can’t say I see many Chinese people here itching for democracy. But most seem to understand that Bush was an anomaly, and that Americans had the power and the freedom to end the Republican regime and choose their own leaders. I like this quote from a New Yorker article (via ESWN, perhaps ironically):

Chinese young people are not naïve about America and they often make pointed criticisms. But we are fortunate that at least one stratum of Chinese youth seems hungry to restore the American image to what many Americans want it to be. As a Chinese student told the three researchers not long ago, “When I was little, I heard adults talking about the American dream – – money, power, freedom, and fairy-tale life…All this seemed to shape an unreachable fairy tale in my little heart.”

So yes, I would say Chinese people don’t only think of torture, attack dogs and incompetency when they think of America. (God knows, every single one of them I know, without exception, wants to go there, and most refer to America’s “open society” with some envy.) The image of democracy has not been permanently tarnished by Bush.

For the record: I am not a proponent of overnight democracy in China. Maybe Western-style democracy will never be right for China. Democracy is full of crippling flaws and at this point China may be better served with a different system. But I am in favor of reform, including no taxation without representation and a legal system that can bring corrupt exploiters to justice. That’s the least the Chinese people deserve, and you don’t need full-blown Western democracy to provide them.

So Charter 08 has gone from a nearly forgotten whisper to a more piercing if not deafening scream. Will it become a roar? I was skeptical before, but now I’d say it’s not impossible. I also understand that 8,000 signatures in China is less than a tiny drop in a huge bucket. But the story now has the potential to resonate. We’ll just have to wait and see.

This post was a bit stream-of-consciousness, as I was looking at a lot of material. Thanks for your patience as I sorted it out for myself.

First take a look at the article, and then read a blogger tear it apart, syllable by syllable. Quite hilarious. Totally merciless.

Beijing is in the process of shutting down for the holiday. The restaurants were all half-empty at lunch-time today and the streets seem semi-deserted. Of course, the fact that it’s totally freezing outside with slicing winds  knocking down bicycles and forcing pedestrians to walk with their backs to the wind could be a factor as well. Right in front of my apartment a gigantic, bright red fireworks shop suddenly appeared out of nowhere this morning. I think the only reason it’s so quiet out there is that no one wants to step away from their central heating.

I thought about leaving for the week, maybe going to Kunming or Guangzhou just for a change of scenery and a little more warmth. Then I decided I’d be better off saving the money and traveling when I have friends in town to go with me (which will happen next month). Still not sure how long I’ll be in China after the holiday; it all depends on the job market.  I think within  few weeks after the holiday I should have a pretty good idea of what my new opportunities here are. I’m still working part-time and going to class, but I can’t work part-time forever. Bills are due and all that. But I have to say, working part-time and studying is not a bad way to live.

Lots happened since my last post. America has a new president. China has announced plans to launch universal health care for all, while doling out stiff penalties to those behind the melamine-laced milk that not only killed and poisoned lots of kids but also made nearly all Chinese-made food products radioactive in the minds of consumers. Reports about which way China’s economy is going are still all over the map, and you can find ample evidence for any theory you can come up with. I have no doubt this’ll be the hot topic here for some months to come. 

There’s always a dramatic lull in business before CNY, and this year, based on my talks with friends and colleagues, this year it was deeper and longer than usual. (No surprise there.) Everyone’s wondering to what extent business will bounce back after the holiday ends. I am, too, and the answer could determine how long I stay here. Let’s hope for the best, for America and China, and despite the cliché, a happy Year of the Ox to everyone.

Update: Forgot to mention, this is an open thread, if anyone is around during the holiday to comment.

Slow news time, with CNY around the corner. Feel free to talk amongst yourselves.

Here in China it’s a wretched time for Pu’er tea investors, but otherwise things aren’t necessarily as grim as the newspapers might lead you to believe. At least that’s the claim of this China business blogger who just returned from a depressing trip to angst-ridden Minnesota. He says China’s woes are being exaggerated, and the sky’s not falling over here like it is over there. Interesting perspective, especially on the factory closings.

Yes, there are thousands of factories closing down in China … but have you seen what those are like? Many of them are shoddy Taiwan- or Hong Kong-owned enterprises making commodity junk of questionable quality and pushing it into the market at dangerously narrow margins. If this is you, then yes, you are a statistic and should take immediate action to remedy this situation – I suggest quickly removing yourself from the commercial gene pool. But since junk companies are not this blog’s key demographic, I need to assume you are smarter than this.

We can all be cautiously optimistic about China in 2009. Yes, 8% GDP growth is lower than the 12% we have been experiencing in the past few years, but it is about 9% greater than what most of the rest of the world is experiencing. So find your happy place, and dig down to locate your opportunity in China. Its here. It is not going to be reaching out to grab you; you’re going to have to look for it. But I am guessing that your opportunities among the native Minnesotans – as nice as they may be – are going to be limited. They are too busy looking at their 401(K)s that are sliding quicker that a Lutheran in Sunday-go-to-meeting-shoes the morning after an ice storm.

No, your opportunities are here. And with caution aplenty and wariness radar on full blast, you will find them.

While he’s more optimistic than I am, his post definitely made me wonder whether we’re getting caught up in pack journalism when it comes to the collapse of Guangdong and China’s manufacturing backbone, and whether things are really as dire here as some are saying (or as some would like to see). I just had a conversation with a reporter who told me they’re surprised at just how stable things are here, at least thus far. They said the job market was still remarkably stable; we are not seeing the white-collar layoffs endemic to present-day America. At least not yet. And I don’t hear from people in China what I’m hearing from literally all my friends and family members back home – that their life savings have been reduced to a fraction of what they were a year ago, and that they’re rearranging their entire lives.

I know, there’s a whole lot to worry about and a whole lot of pain down the road for China. But maybe those horror stories from Shenzhen and Guangzhou only tell a part of the story? And maybe this really is the best place to be right now. I’d sure like to think so.

America’s smartest journalist explains how and why the pilot and crew responded so beautifully, and the hazards involved in every take-off and landing. An amateur pilot himself, he offers some wonderful first-hand insights. Please go there.

I read pieces like this, and I so hope professional journalism finds a way to survive.