The Dark Side of China's Economic Boom

SimonWorld says:

Despite the flak I took in promoting an article written by mainland born, U.S. based political science professor Minxin Pei (the last time about Taiwan), I shall do it again. This time, Dr. Pei writes a very readable editorial for the sometimes geographically challenged readership of the San Francisco Chronicle. He had some brave observations about why we should be pessimistic about political liberalization following on from economic liberalization... I don't agree with all of his arguments, but they are a quick read and definitely worth absorbing.

Here's the commentary on China's patronage system:

The dark side of China's dazzling economic boom, by Minxin Pei, Commentary, SF Chronicle: The only thing rising faster than China is the hype about China. ... And why shouldn't they believe the hype? The record of China's growth during the past two decades has proved pessimists wrong and optimists not optimistic enough. But before we all start learning Chinese and marveling at the accomplishments of the Chinese Communist Party, we might want to pause. Upon close examination, China's record loses some of its luster. ...

Behind the glowing headlines are fundamental frailties rooted in the Chinese neo-Leninist state. Unlike Maoism, neo-Leninism blends one-party rule and state control of key sectors of the economy with partial market reforms and an end to self-imposed isolation from the world economy.

The Maoist state preached egalitarianism and relied on the loyalty of workers and peasants. The neo-Leninist state practices elitism, draws its support from technocrats, the military, and the police, and co-opts new social elites (professionals and private entrepreneurs) and foreign capital -- all vilified under Maoism. ...

To most Western observers, China's economic success obscures the predatory characteristics of its neo-Leninist state. But Beijing's brand of authoritarian politics is spawning a dangerous mix of crony capitalism, rampant corruption and widening inequality. Dreams that the country's economic liberalization will someday lead to political reform remain distant.

After a quarter century of gradual economic reform, has China succeeded in transforming its old command economy into a genuine market economy? Not nearly as well as most people would guess. ... The Chinese state remains deeply entrenched in the economy. According to official data for 2003, state-owned companies directly accounted for 38 percent of the country's GDP and employed 85 million people (about one third of the urban workforce).

But China's tentacles are even more securely wrapped around the economy than these figures suggest. For example, Beijing continues to own the bulk of capital. In 2003, the state controlled $1.2 trillion worth of capital stock, or 56 percent of the country's fixed industrial assets. There are only 40 private firms among the 1,520 Chinese companies listed on domestic and foreign exchanges.

To many observers, Beijing's tight grip on the Chinese economy means only that its reform process is incomplete. As China continues to open itself, they predict, state control will ease and market forces will clear away inefficient industries and clean up state institutions. The strong belief in gradual but inexorable economic liberalization often has a political corollary: that market forces will eventually produce civil liberties and political pluralism.

It's a comforting thought. Yet these optimistic visions tend to ignore the neo-Leninist regime's desperate need for unfettered access to economic spoils. Few authoritarian regimes can maintain power through coercion alone. Most mix coercion with patronage to secure support from key constituencies, such as the bureaucracy, the military and business interests. In other words, an authoritarian regime imperils its capacity for political control if it embraces full economic liberalization. Most authoritarian regimes know that much, and none better than Beijing.

Today, Beijing oversees a vast patronage system that secures the loyalty of supporters and allocates privileges to favored groups. The party appoints 81 percent of the chief executives of state-owned enterprises and 56 percent of all senior corporate executives.

State enterprises are miserably unprofitable. In 2003, a boom year, their median rate of return on assets was a measly 1.5 percent. More than 35 percent of state enterprises lose money and 1 in 6 has more debts than assets. China is the only country in history to have simultaneously achieved record economic growth and a record number of nonperforming bank loans.

Political savvy and business acumen do not often go together. Because of the party's fixation with high growth, government officials are rewarded for delivering, or appearing to deliver, precisely that. This incentive structure fuels a widespread misallocation of capital to "image projects" (such as new factories, luxury shopping malls, recreational facilities, and unnecessary infrastructure) that burnish local officials' records and strengthen their chances of promotion. The results of these mistakes -- gleaming office complexes, industrial parks, landscaped highways and public squares -- tend to impress Western visitors, who view them as further proof of China's economic prowess.

The Chinese economy is not merely inefficient; it has also fallen victim to crony capitalism with Chinese characteristics -- the marriage between unchecked power and ill-gotten wealth. And corruption is worst where the hand of the state is strongest. The most corrupt sectors in China, such as power generation, tobacco, banking, financial services, and infrastructure, are all state-controlled monopolies. ...

Various indicators, pieced together from official sources, suggest endemic graft within the state. ... Dishonest officials today face little risk of serious punishment. On average, 140,000 party officials and members were caught in corruption scandals each year in the 1990s, and 5.6 percent of these were criminally prosecuted. In 2004, 170,850 party officials and members were implicated, but only ... 2.9 percent ... were subject to criminal prosecution. So, party membership has its privileges.

Rapid economic growth has not yet produced China's much-anticipated political pluralism. In part, democracy itself has been a victim of the country's economic expansion. However flawed and mismanaged, the country's rapid growth has bolstered Beijing's legitimacy and reduced pressure on its ruling elites to liberalize. Democratic transitions in developing countries are often caused by economic crises blamed on the incompetence and mismanagement of the ancien regime. China hasn't experienced that crisis yet. Meanwhile, the riches available to the ruling class tend to drown any movement for democratic reform from within the elite. Political power has become more valuable because it can be converted into wealth and privilege unimaginable in the past. At the moment, China's economic growth is having a perverse effect on democratization: It makes the ruling elite even more reluctant to part with power. ...

The emerging social elite ... is co-opted and coddled. The party showers the urban intelligentsia, professionals and private entrepreneurs with economic perks, professional honors, and political access. For example, nationwide, 145,000 designated experts, or about 8 percent of senior professionals, received "special government stipends" (monthly salary supplements) in 2004; tens of thousands of former college professors have been recruited into the party and promoted to senior government positions. At least for now, the party's charm campaign is working: The social groups that are usually the forces of democratization have been politically neutralized.

China has already paid a heavy price for the flaws of its political system and the corruption it has spawned. Its new leaders, though aware of the depth of the decay, are taking only modest steps to correct it. For the moment, China's strong economic fundamentals and the boundless energy of its people have concealed and offset its poor governance, but they will carry China only so far. Someday soon, we will know whether such a flawed system can pass a stress test: a severe economic shock, political upheaval, a public health crisis or an ecological catastrophe. China may be rising, but no one really knows whether it can fly.

Comments

[Emmanuel]

In 2003, the state controlled $1.2 trillion worth of capital stock, or 56 percent of the country's fixed industrial assets. There are only 40 private firms among the 1,520 Chinese companies listed on domestic and foreign exchanges.

And people wonder why the Chinese stock exchanges are underperforming in spite of China's economic boom.
John Snow and Paul O'Neill, eat your hearts out -

Today, Beijing oversees a vast patronage system that secures the loyalty of supporters and allocates privileges to favored groups. The party appoints 81 percent of the chief executives of state-owned enterprises and 56 percent of all senior corporate executives.

[John Konop]

Mark,

This article about what is really going on in China is very important and under reported. India is also having similar type problems. The unrest due to the current trade policies is creating more unrest not less.The moral of the story is GDP is gross not net.Also just because EXXON has a great year it does not mean the average guy is doing better. The best indicators are real wages and debt for the majority of people as to the success or failure of trade and economic policy. I am a capitalist, but if the game gets out of balance, you better check the rules of the game.Thank you great post !

[donna]

"But Beijing's brand of authoritarian politics is spawning a dangerous mix of crony capitalism, rampant corruption and widening inequality."

And ours isn't?

"Most mix coercion with patronage to secure support from key constituencies, such as the bureaucracy, the military and business interests."

Oh, so they ought to adopt our model, then - so if they ive big contracts to Halliburton too, everyone will be happy, huh?

"The emerging social elite ... is co-opted and coddled. The party showers the urban intelligentsia, professionals and private entrepreneurs with economic perks, professional honors, and political access."

Um, and we don't? This whole article makes it sound to me as if China IS already just like America....

[Sean Matthews]

I read the longer version of this piece. I don't really understand why people don't talk more about the medium term political risks in China.

It does not follow that the place is *going* to explode, but my amateur impression is that there is a non-trivial risk that it might (imagine, e.g., something finally going very wrong with the scary current economic Tango with the US), and I wonder why there is no discussion. None. Does no-one read Tocqueville any more?

[John Konop]

Donna,

The scary part is in china has about 1.2 billion people living on less than $2 dollar a day. Also China has over 50 separate cultures in the country. This is ripe for major unrest. India close 800 million living on lees than $2 dollars a day. Yet all we hear about is the GDP growth in China and India. If we do not reverse this trend our economic polict that promotes slave labor,our country will keep spiraling in that direction.

[John Konop]

Donna,

Sorry ,economic policy that promotes slave labor.

[algernon]

Massive misallocation of resouces is what causes recessions. It sounds as tho' the Chinese are following in the footsteps of Japan 1989. The trigger could be the US saying it can't borrow anymore, even at low rates.

Donna, we are more corrupt by the year. But the buying of votes with taxpayer money that goes on here doesn't rise to the level of what this author describes.

[a]

I agree with what the author said about China --- a lot more reform in the economic side to do. Recently an internal debate held on March 4 by well respected Chinese scholars were leaked to the internet, and a WSJ report "China Meeting On Market System Is Leaked on Web" detailed the debate, the leak as well as the handling of the leak.

For any one that can read Chinese, the original leak is posted here:
http://washeng.net/HuaShan/BBS/shishi/gbcurrent/144538.shtml

[a]

Here is the WSJ article:

China Meeting
On Market System
Is Leaked on Web

By KATHY CHEN
April 6, 2006

BEIJING -- Minutes of a closed, government-backed
meeting about China's transition to a market economy
have been leaked onto the Internet, offering a rare,
inside look into the heated debate over the future
direction of overhauls -- and underscoring the
growing role of the Web in opening up the once-closed
nation.

The China Society of Economic Reform, a think tank
affiliated with the State Council, or cabinet, had
invited more than three dozen academics, experts and
government officials to the March 4 event to discuss
the next step in China's transition to a market
system. The aim was to solicit the frank views of
participants behind closed doors for China's top
leaders.

But minutes of the meeting -- including
hitherto-unknown details about the controversial
sale of stakes in China's big state-run commercial banks to foreign investors, as well as sensitive statistics reflecting growing public discontent -- have since surfaced on a number of Chinese-language Web sites.

"We have no idea how the original minutes would get
out and be posted onto the Internet," said a society
official, who asked to be identified only by his
surname, Hu. "This was supposed to be an internal
meeting, and some of the words are improper for
publication."

Such a leak, which would have been unheard of even a
few years ago, has propelled the think tank to
publish a cleaned-up version of the forum minutes, which it posted on the Internet last week. That hasn't
stopped copies of the original minutes from proliferating on the Internet, after one of the earliest postings appeared March 20 on a Web site critical of the move to a market economy, Huayue Forum. Currently, dozens of political-discussion and general chat-room sites are carrying the original minutes.

SPEAKING OUT


Comments from a closed forum on China's economic
overhauls are disclosed online
?Original version: Peking University Professor He
Weifang: "I have explicably said I hope that the
Communist Party will split into two
factions? because it is an organization without any legal basis [and] infringes on freedom and stomps on the law? [The system] has seriously violated what the Constitution says."
Cleaned-up version: Mr. He's speech has been
deleted.

?Original version: Xie Ping, China SAFE Investment
Corp. head: "The last [bank] which nobody wants is
the Agricultural Bank of China."
Cleaned-up version: Mr. Xie's comment on the bank
has been deleted.

?Original version: Chi Fulin, deputy director of
Hainan-based China Institute for Reform and
Development: The National Development and Reform
Commission "is in charge of both abstract and
concrete things, both long and short things, and everything. For example, Hainan's governor paid a new year visit to the [commission] before the Lunar New Year , which achieved considerable results? During several meals with [Minister] Ma Kai and [Deputy Minister] Zhang Guobao present, several decisions were made right at the table."
Cleaned-up version: Mr. Chi's comments about China's
most powerful economic agency were removed.


Source: WSJ researchIn an example of the difference
between the two versions, the original minutes
quoted a state bank-holding company executive as saying Citigroup Inc. had proclaimed one Chinese bank "a total mess." The sanitized version of the minutes has him quoting Citigroup as saying that the Chinese bank's "internal management is poor."

Mr. Hu and several participants in the meeting
confirmed that the original minutes posted online
were accurate, though they included some transcription
glitches.

It remains unclear who leaked the minutes or for
what purpose. The development is the latest twist in an increasingly fierce and public debate over the
future of China's transition to a market economy. A rising chorus of criticism about problems arising from the transition -- from a growing wealth gap to rising
corruption to the domination of some industries by
foreign investors -- has put China at a critical
crossroads in its 27-year-old restructuring program.

While few expect a significant rollback of the
country's increasingly market-driven economy, the
debate, which began among academics, is already
affecting policy decisions. Some market-liberalization
measures -- such as mergers and acquisitions,
management buyouts and policies allowing Chinese
private companies to take over large state-run
companies -- have been scaled back or put on hold. A
number of proposed foreign-investment deals have
been scuttled or are receiving greater scrutiny.

Propaganda authorities have ordered key state-run
media to refrain from reporting on the debate since
early March, says a Chinese media executive. But
some local newspapers have continued to publish articles on the issue, and people on both sides of the debate have increasingly turned to the Internet to air their views.

According to the original forum minutes carried
online, some participants used the event to defend
China's overhauls. Xie Ping, head of China SAFE
Investment Corp., or Central Huijin, a state-run
company that oversees China's major banks, addressed
widespread complaints that China has sold stakes in
its banks too cheaply to foreign investors. He said
Huijin agreed to sell a 9% stake in China
Construction Bank to Bank of America Corp. and other strategic investors for 1.15 yuan (14 U.S. cents) per share -- or $3 billion -- after Citigroup had refused to pay more than one yuan a share, proclaiming the Chinese bank "a total mess."

Mr. Xie rebutted concerns that selling Chinese bank
stakes to foreigners would endanger China's
financial security. He said the state would continue to hold a majority stake in China's four major commercial banks for "at least 10 years" and defined majority stake as at least 66% -- a definition that hadn't previously been made public.

Li Shuguang, a vice dean at the China University of
Politics and Law, revealed during the forum that the
government received about 30 million petitions from
people seeking redress for grievances in 2005, a
figure that also hasn't been publicized. In
comparison, he said, the total number of petitions
received between 1979 and 1982 was 20,000.

Some forum participants took the opportunity to call
for greater democracy and other changes to the
political system, which remains under authoritarian,
Communist Party control. He Weifang, a professor
with prestigious Peking University, told the forum: "We all have a goal, which we can't express for now. But we eventually will certainly step onto that path: for example, a multiparty system, press freedom, true democracy, real individual freedom."

Critics of overhauls seized on the original minutes
to write attacks on Internet sites against some forum
participants who want China to continue market
liberalization. One person, writing on the
conservative Huayue Forum, questioned "whether this
meeting is to carry reform through the hardest part,
or to overturn the regime." The posting alleged that
Messrs. He and Li, among other participants, are
using the name of "reform" to "split and overturn the
[Communist] Party."

Others applauded the meeting and the participants'
candid comments. "Some of the speakers have a
conscience," wrote another person. The sanitized
version of the forum minutes failed to carry any of
Mr. He's comments advocating greater democracy.

Write to Kathy Chen at kathy.chen@wsj.com

[anne]

http://www.msci.com/equity/index2.html

Actually, if there is anything odd about the Chinese stock market I missed it. China and Taiwan have paced each other over the last 10 years, with China doing considerably better during the last 5 years, and doing quite well the last 5 in any comparison. The only problem I know of is new issues rountinely being pricy and performing poorly before a reasonable valuation is created. As for prime shares, as state oil, they are fine. Asian shares were often limited after the currency crisis of 1998, and caught in the general bear market after 2000. China is 9.2% of the Vanguard emerging market index.

[Bruce Wilder]

"On average, 140,000 party officials and members were caught in corruption scandals each year in the 1990s, and 5.6 percent of these were criminally prosecuted. In 2004, 170,850 party officials and members were implicated, but only ... 2.9 percent ... were subject to criminal prosecution. So, party membership has its privileges."

Who keeps such precise statistics on corruption scandals?

I guess the numbers are kind of discouraging, but the fact that there are numbers -- first, it seems a bit odd -- maybe that is encouraging.

There's a lot of cultural and economic institution building, which has to go on in China, just like there is a lot of infrastructure building. I find it hard to weigh or evaluate this article. If someone complained about all the bad roads in China, what would that tell me? That China is a developing country, with a legacy of bad infrastructure? Duh?

China has a legacy of communist industrial enterprise and authoritarian political institutions. I think I knew that, already. And, I am sure China's leadership realizes it as well.

Identifying what constitutes corruption is almost as important in building institutions as legal prosecutions. We, in the West, tend not to notice, but communist regimes tended to identify much of normal Western business practice as "corruption". Russia stumbled, in part, because the norms established by 70 years of Communism made business entrepreneurs and mobsters nearly indistinguishable in the public mind, so that mobsters and gangsters now dominate the private economy. China actually seems to have done a better job of negotiating that passage. Highly educated professionals are being co-opted by the Party? Maybe. And, maybe, the professions are a key part of successful institution-building, which identifies successful business enterprise as something other than a criminal enterprise, and competent government administration as a worthy goal requiring professionals. The Communist Party got started on the present path, by welcoming the children of the former capitalist, landlord class into the Party around 1980. It is hard to know whether the regard for the professions is cynical co-option or far-sighted institution-building.

China will eventually reach a crisis point of some sort -- it will not all be smooth trend-lines and gradual transitions. Jeanne Dixon could predict that. The simple rule of 36 would suggest China has a ways to go, before it reaches its next inflection point.

For those not familiar with the rule of 36, it is a passing of generations thing, which is remarkably good at marking out moments of historic transitions. In the history of the U.S., the four-year interval for Presidential elections makes it very regular, indeed: 36 years from Washington's election as President to the crisis of the John Q. Adams v. Andrew Jackson election, and another 36 years to Lincoln; or the 36 years of the New Deal -- FDR to Nixon. Even without elections, it works pretty well: 36 years from the Russian Revolution to the death of Stalin, and another 36 years to the fall of the Berlin Wall. By that reckoning, since Mao died in 1976 and the Cultural Revolution petered out soon after, China's next shift ought to be due circa 2012-15. You heard it here first, folks!

[a]

However, judging from the intensive internal debate, I have to also emphasize that:
1) the government is trying to get better.
2) the eocnomic reform is facing a choice of direction, a more input from the west on how to broaden the benefit to more people is appreciated --- I also have got this positive impression by some of the speech in the Economic forum help recently in Beijing. Again, Prof. Stiglitz was there.
3) to assume that economic growth automatic translate to democracy is self-invented by the west. There is a lot more reform on the political side needed, but politcal-cultural reform would understandable come at later stage. And won't come that easy.

As a Chinese I do see our traditional culture has some lacking in respecting human rights and to progress into a country that fully respect human rights, we need a longer time to go. Even today, while many people still suffer the lack of basic rights (I recently learned that a friend of mine was detained for 45 days without Charge), there is also progress made. My own parents would tell me that the progress is also undenialble. Life is more appreciated than in the past, though not up to the standard in the west.

Despite our cultural flaws (which I do admit), we are also a great culture that absorb and learn from other cultures and I have confidence that my country will achieve democarcy one day. Maybe not in the way the west imagined. We ha come a long way, no deny of that. And we have a long way to go, not deny either.

[anne]

I could not be more impressed by what China has accomplished in the last generation, and find no reason for concern other than the concern for confronting with reasonable smoothness a radical development path involving 1.4 billion people. Problem on problem has been effectively dealt with as more and more people are finding lives changed markedly for the better.

[yartrebo]

State run corporations are not the problem, corruption is. State corporations can be either beacons of transparency or corrupt cess-pools of corruption. Private corporations are the same way. Fannie Mae is very secretive and is capable of doing immense harm. Drug companies make a killing (pun intended) from their government grandted monopolies.

China should be focusing on rooting out corruption, not being sidetracked with privatization (which in itself is a magnet for corruption).

[OldVet]

I found myself inserting "US" for "China" in the commentary, and smiling. We're blurring the lines in more ways than one.

[a]

yartrebo, agree.

But the problem that Mr. Pei mentioned in state-run enterprises is: the officials are appointed by the party, not purely by level of competance but also by cronism.

The political system is, in some way, making it harder to have economic reforms. Many Chinese are asking, if the current political system is sustainable. It is in the party's interest to stem out corruption for its own survival. But it is very hard without an independent judiciary and monitoring system. Whistle blowers are commonly abused, even by ordinary people, because they are often demonized by the people in power as "stopping the locals benefitting" from the corruption.

I really wish Wen and Hu knew what they are doing and will gently lead the country into a more balanced political system that is more responsible to the people, and less afraid of criticism.

[anne]

http://www.nytimes.com/2006/04/11/world/asia/11china.html?ex=1302408000&en=2bc69b3c0d6805cd&ei=5090&partner=rssuserland&emc=rss

April 11, 2006

Chinese Turn to Civic Power as a New Tool
By HOWARD W. FRENCH

XINZHUANG, China — This winter, Liu Xianhong's life was changed for the second time by her infection with AIDS.

The first time was seven years ago, when she discovered that she, along with her newborn son, had contracted the disease through an infusion of contaminated blood given to her during childbirth.

Then late last year, her story was publicized by a leading Chinese journalist, turning one woman's quest for compensation into a national cause célèbre for a new class of advocates who are using the country's legal system to fight for social justice.

Ms. Liu's experience, all but unimaginable as recently as two or three years ago, is increasingly common in China, where a once totalitarian system is facing growing pressure from a population that is awakening to the power of independent organization. Uncounted millions of Chinese, from the rich cities of the east to the impoverished countryside, are pushing an inflexible political system for redress over issues from shoddy health care and illegal land seizures to dire pollution and rampant official corruption.

Ms. Liu first sought help in November, after hearing rumors that she was about to be arrested here in her hometown in this dismal region of northern China for protesting her infection at the local Communist Party headquarters. She was brought to Tiananmen Square in Beijing, the country's most famous site, by the politically aware employee of the blood bank in Xingtai who first publicly accused it of distributing contaminated blood to her and more than a thousand others.

There, amid the crowds of people who show up from all over China each morning to watch the flag-raising ceremony — and provide a measure of anonymity — Ms. Liu met Hu Jia, one of China's leading advocates for people with AIDS. It was the 32-year-old woman's introduction to the world of nongovernmental organizations, or NGO's, which are fighting for better treatment of people with the disease.

In the space of a few weeks, she returned to Beijing twice more for meetings that were scheduled and rescheduled in different locations, to avoid detection by the police. It was through those meetings that she met one of the country's most aggressive investigative reporters, Wang Keqin, who brought her case to the attention of China's rising advocate class, who began championing her cause.

China's leaders seem to be of two minds in confronting the trend. Predictably enough, many warn of the dangers an independent civil society poses to the authority of the state. But there are others who now recognize, however tentatively, that the government cannot deal effectively with every issue without contributions from advocates, civic organizations and intellectuals.

That ambivalence was illustrated clearly this past winter. In February, Mr. Hu, the advocate, was detained and held without explanation for six weeks. But on March 1, Beijing introduced stricter nationwide regulations governing the collection and distribution of blood products by the banks, a development that advocates attribute at least partly to their work....

[a]

anne, nice post from New York Times.

Democracy is definitely better than authortarian because when everyone can participate, the system benefits from everyone's energy.

And as others commented here: there are cautions on giving the rich minority too much power as well. To evolve into a democracy that is beneficial to most of the people, is hard.

[calmo]

Could be the similarity that donna is outraged by is part of the intent. [You think that's outrageous?]
Skillings, for example, tells us that he is "absolutely innocent" --not partially or relatively or temporarily or any other kind of conditional innocence. We (and apparently the jury) are absolutely skeptical (bless our hearts).
I would not be surprised to learn Ken has many counterparts in China whose justice is just not as well reported.

[Bruce Wilder]

"corruption" is really not an entirely objective thing; it is defined by legal institutions and moral expectations.

I am sure is Jeffrey Skillings mind, he is innocent; the man strikes me as a pathological narcissist. As Mark Kleiman said recently, "The expropriation of shareholder wealth by predatory corporate executives is one of the great scandals of the past quarter-century, and in particular the past decade."
http://www.samefacts.com/archives/_/2006/04/like_master_like_man.php

Defining something as corruption can be a political weapon. It has been a favorite weapon for reactionaries, fighting populists for centuries, and vice versa works as well. I am not saying it has no useful meaning, only that it means different things to different people. Any organization will make mistakes, and have mechanisms in place to prevent deviation from its prescribed course. Every one has friends and family and is inclined to trust those he knows; that might be cronyism in a certain context, but it is universal. Every society will have an elite, and the elite will be served well, perhaps too well; how well it serves is the open question.

The ability of a society to motivate people to respect abstract principles and to create trust in anonymous institutions is vital. Two of the richest cities in the world are Hong Kong and Singapore -- Chinese mercantile energy and intelligence combined with British institutions (law, accounting, rational and responsible government, insurance companies and banks, stock markets and trustworthy corporations, universities). Neither one has ever been exactly a democracy. They are examples to contemplate.

[John Konop]

Bruce,

If you have a city that is rich like Singapore and 70% to 80% of the population around it makes less than $2 a day this is a successful model ? Do you think, an economic model that leaves most of the people behind is not ripe for unrest ? Central America and Middle East our the poster Childs of why the most extremist groups keep winning elections.

[dryfly]

Do you think, an economic model that leaves most of the people behind is not ripe for unrest?

John - here's another nugget. I've read a number of places that something like 20-30 million people leave rural China every year and head (mostly) to the coastal cities. This started a while back (mid-90s) but has taken off like crazy since 2000 or so.

That is a little less than the population of California moving into an area a little smaller or about the size of California... EVERY YEAR.

Now realize... something like 250 million to 300 million already live in those coastal provinces (thats 8-10 times the population of California already there in an area about the size of california or smaller). This is the greatest human migration in the history of the species.

Unrest a possibility? Ummm ya I'd say so.

That in part explains two things (1) why the Chinese will do almost ANYTHING to buy jobs to keep those folks idle & eating and (2) given all that is on the plate of our administration - Iraq, Iran, oil - why they aren't pushing China harder to float the RMB... the last thing they 'need' is another revolution in China.

Interesting times indeed.

[dryfly]

I found myself inserting "US" for "China" in the commentary, and smiling.

Mr too.

Notice that they - the Chinese - have very sensitive minutes of an important 'official meeting' floating all over the internet... any one see minutes from Dick Chaney's energy summit released or 'leaked'?

[Movie Guy]

The dark side of China's economy is the amount of pollution that is being produced. On a per unit production basis as compared to production in Western nations, the production yield is much higher.

Oh...we were discussing that.

But we should.

[STS]

The political questions about globalization are what most worry me. Growing inequality at home gets little attention and less action because *on average* the economy is growing decently. So the US elite go right on cozying up to the authoritarian elites abroad.

There is a certain rough justice in lots of materially privileged Americans starting to compete with millions of people abroad who have been artificially prevented from participating economically. But I fear economic insecurity will make Americans so quiet politically that we will sacrifice our political rights.

Our rights as American citizens may turn out to depend importantly on the political aspirations of those Chinese workers flocking to the coastal cities. If their increasing economic freedom does not in fact produce political assertiveness, our own political culture may continue its authoritarian trend past the point of no return.

[John Konop]

Dryfly, Movie Guy,

If you are not using innovation due to cheap labor, would not that increase enviormental problems ? Assuming new technology would be more enviormental friendly. By promoting China's slave labor business model are we hurting the enviorment ? By the way Frontline had a great special last night on this topic.

[John Konop]

STS,

Your post is my biggest fear.I was on the radio today making a simular point about our trade and immgration policy. We must look at both sides of the problem because they feed each other(good or badly).

[anne]

Reference to China's accomplishments in mean spirited terms, both from the Chinese perspective and from our historical perspective, is needlessly offensive and merely a way of clouding our ability to look to our own economic structures and programs. China is as deserving of our respect as Britain or Japan or Mexico.

[anne]

Using a term to refer to Chinese workers that is insulting and wrong and carries historical connotations that are painful, should be stopped.

[John Konop]

anne,

You should feel guilty for being indifferent to the truth.

This was found on a concentration camp wall after WW2.

FEAR NOT YOUR FRIENDS FOR THEY CAN ONLY BETRAY YOU

FEAR NOT YOUR ENEMY FOR THEY CAN ONLY KILL YOU

YET FEAR THE INDIFFERENT WHO LET KILLERS AND BETRAYERS WALK SAFELY ON OUR EARTH

In the special on Frontline they use the term SLAVE LABOR.

TV: 'Tank Man' explores China's fierce economic machine

Vince Horiuchi

On June 5, 1989, one day after Chinese troops expelled thousands of demonstrators from Tiananmen Square in Beijing, a solitary, unarmed protester stood his ground before a column of tanks advancing down the Avenue of Eternal Peace. Captured by Western photographers watching nearby, this extraordinary confrontation became an icon of the fight for freedom around the world.

It's simple, elegant in its imagery, and it stands as one of the defining photos of the late 20th century.
A lone man carrying shopping bags stands in front of a barricade of Chinese tanks, defying their advance on Beijing's Tiananmen Square in 1989.
That image of an individual taking on Chinese oppression inspired millions and became an icon of Chinese revolts against government control and in favor of freedom of speech and a free press.
Tuesday's brilliant "Frontline" (8 p.m. on KUED Channel 7) examines the 1989 Tiananmen Square massacre and how those bloody demonstrations for social and political reform led to an economic revolution in that country on a scale the world had never seen. That iconic moment in Chinese history is used as a focal point to examine the nation's remarkable transformation.
No one knows the name of the man who stood in front of those tanks that June day after several days of violent protests on the square. That week saw the deaths of more than 2,000 people, according to the Chinese Red Cross.
But "The Tank Man," as he became known, became a symbol for freedom and reform, inspiring others to fight against Communist control.
After the protests, the Chinese government agreed to allow foreign companies into big cities like Beijing to produce Western goods there for lower prices as long as it controlled the press and information.
That deal with the devil led to explosive economic growth in big industrial cities, where companies ranging from Prada to Microsoft have settled in to produce goods for much of the Western world.
But that has also led to extreme poverty in other parts of China, where peasant farmers work fields to make enough money to educate their children.


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The rural poverty, in turn, has prompted a huge migration of young people to industrialized cities where they work for slave-labor wages - $125 a month - for the American and European companies.
"The Tank Man" episode is a wonderfully constructed documentary that examines the toll exacted by Chinese government policies since those bloody protests 17 years ago.
That turning point in history apparently isn't being taught to students: In one alarming scene from the film, a group of Beijing students who are shown the picture don't know what it is.
Today, American technology companies such as Microsoft, Cisco Systems and Yahoo! are so determined to do business with the Chinese government they are willing to self-censor Internet information.
This riveting documentary will make you feel angry, sad and guilty. We buy the goods made by cheap labor there - the clothes, the appliances and the cars. The least we can do is watch "The Tank Man" to understand the price paid by the people who make them.
---
Television columnist Vince Horiuchi appears Mondays and Fridays. He can be reached at vince@sltrib.com or 801-257-8607. For more television insights, visit Horiuchi's blog, "The Village Vidiot," at http://blogs.sltrib.com/tv/. Send comments about this column to livingeditor@sltrib.com.

[anne]

Ah; I know now why I prefer to watch British comedy, and I rather appreciate the Chinese and what they have accomplished :)

[anne]

http://www.nytimes.com/2005/03/05/arts/dance/05danc.html?ex=1267765200&en=b2498b03b6c44851&ei=5090&partner=rssuserland

March 5, 2005

The Peacock Princess of China
By DAVID BARBOZA

KUNMING, China - Ever since Yang Liping won first prize in a national dance competition in 1986, she has been delighting Chinese audiences with her signature dance, "Spirit of the Peacock."

Now, Ms. Yang, one of China's best-known dancers, is the director, choreographer and star of a new show that is drawing sellout crowds all over the country.

The show, "Dynamic Yunnan," which is expected to travel to Europe and the United States later this year, features Ms. Yang and about 70 other performers from Yunnan Province, in southwestern China, staging ritualistic folk dances, beating drums, stomping, singing and floating elegantly across the stage like butterflies.

The show is the latest coming-out party for Ms. Yang, who, though not well known outside of China, is known here as a stern but creative and independent force in Chinese dance. And even at 47, she can dance like a spirited youth, contorting her slender frame and whipping her arms, legs and fingers in vivid representations of animals and other aspects of the natural world.

"I just love to dance," Ms. Yang said over dinner after a performance here in Kunming, Yunnan's provincial capital. "My nature is to dance all the time. After I eat, I want to start dancing all over again."

To prepare the show, Ms. Yang said she spent more than a year traveling to remote villages in her native Yunnan, studying local dances, recording disappearing folk songs and recruiting dozens of young people from ethnic minority groups. Yunnan is China's most ethnically diverse province.

Many of the villages she visited were wedged between mountains and seemingly lost to the modern world. There she encountered the folk rhythms of farmers and villagers who seemed to have a natural aptitude for song and dance.

"In these villages, people have songs and dances for every event - when they're happy, at harvest time, when they're getting married or mourning," she said. "It's not a choice, it's a lifestyle."

Ms. Yang is also a dancer by nature. She was born about 100 miles northwest of here, in the town of Dali, the eldest of four children. Her parents and grandparents, members of the Bai ethnic minority, were farmers in a nearby village. As was true for everyone in their village, she said, singing and dancing were a part of their lives.

"My grandmother was the best singer in the village," Ms. Yang said, grabbing a bowl of rice at a restaurant near Kunming's performing arts center. "I clearly remember, when I was 6 years old, waking up and hearing my grandmother's voice. My grandfather had died and she sang all day long - all the details of their life together. This was our life. My family loved to sing and dance."

From an early age, Ms. Yang loved to dance, too. At 11, after the family had moved to Xishuangbanna, a region in southern Yunnan, she joined a local dance troupe and fell in love with a popular dance that imitates the movements of the peacock, a totem of the Bai people....

[anne]

http://www.nytimes.com/2005/03/06/arts/dance/06kour.html

March 6, 2005

Dancing a Dream, From a Child of Mao's Revolution
By GIA KOURLAS

LIKE millions of girls who had come before her, the choreographer Yin Mei was staunchly devoted to her diary. But the thoughts she poured onto its pages were drastically different from those of a typical angst-ridden adolescent. She grew up in a town in central China during the Cultural Revolution. At age 7, she, along with her classmates, started a journal to record, as she puts it, "her progress along the revolutionary road."

"We were the children of Chairman Mao," Ms. Yin, now 42, said recently. "We wanted to offer our life to him. It was real. From the ages of 7 to 14, I sincerely wanted to become a farmer or a soldier. During the Cultural Revolution, everybody spoke the same meaningless words. But as I was reading my later diaries, I can tell I started to have other feelings and sensations. I started to think about myself."

Around the same time she began her diary, Ms. Yin watched a ballet film and fell in love with dance. One of her most treasured childhood memories occurred when her father surprised her with a pair of ballet slippers.

"As students, we had to work on the farm to help with harvest time," she said. "We were basically doing all kinds of things except studying in school. I came home from the country and saw this pair of slippers. I was so excited that I did not even wash my feet. From then on, I was dancing."

During the Cultural Revolution, Ms. Yin, whose outward fragility belies a tougher inner core, performed with a traditional Chinese company before moving to New York in 1985. In her newest piece, "Nomad: The River," to be performed at Dance Theater Workshop beginning on Wednesday, she strives to resolve the experiences of her childhood, not through a linear depiction but through strange and bewitching imagery that is pieced together like a dream.

"Nomad," a quartet, features a set by Christopher Salter so extravagant it could be taken for an installation. Mr. Salter collaborated with the choreographer William Forsythe and the director Peter Sellars before helping to found Sponge, an art and research organization. He met Ms. Yin last spring at Brown University, where he was teaching a course in performance technology.

He watched a showing of "Nomad," which she had staged with a group of students there, and was riveted.

"I've worked on and seen a lot of dance, and what impressed me about Yin Mei's work was the sheer visceral quality of it," Mr. Salter said. "There's very little work happening where you really feel it in your gut. I was also interested in the mix of vocabulary. You see edges of Asian movement traditions, but you also see a lot of German expressionist dance and European influences. I was struck by the fact that it was very organic. It's rooted in a real place."

The title "Nomad: The River" refers to the Yellow River in China and the Ganges in India, both of which Ms. Yin considers at once sacred and destructive. The work begins and ends with voice-overs taken from Ms. Yin's diaries as well as revolutionary slogans, anchoring the dance in a concrete historical moment. The middle section wordlessly evokes horror and fantasy.

"I use words but not details in the piece," Ms. Yin said. "It doesn't become entirely personal. In the end, I want to establish a sense of place to make the audience feel something, but the work is very abstract....

[mich]

I pulled up google to search for the viewpoints of MEXICO regarding assertive behavior. You web site talks about China. Ya know the internet sucks.