Understanding the way China is governed, and why.
“China Names Economist as Central Bank Adviser,” by Rick Carew. The Wall Street Journal, Beijing, August 14, 2006 (Subscription Required)
I had the rare and humbling honor of sharing a podium with Professor Fan Gang, head of the National Economic Research Institute, at a Singapore confab for Strategic Intelligence about six years ago. He is every bit (and more) the worldly and sophisticated an economist as Steve Green at Standard Chartered gives him credit for being, but he is also extremely engaging, easy to talk to, and as comfortable in a salon full of western businessmen as he is in a hall filled with party cadres.
It is this combination of intellect and social ambidexterity that makes him such a positive addition to the monetary policy committee at the People’s Bank of China. I can only hope this is a stepping stone to a more official position.
If nothing else, China could use his talents to mange the fairly hawkish rhetoric coming out of U.S. Treasury Secretary Henry Paulson’s office. After Snow had backed down a bit, Paulson’s debut in office has been marked by increase demands to adjust the yuan. I think Fan Gang is the kind of economist that can help PBOC and Treasury build a clearer mutual understanding based on the economics rather than the rhetoric, both because he fundamentally agrees with some adjustment, but also because he can clearly and intelligently articulate (in terms U.S. economists would get) why it can’t go any faster.
In the Hutong, deep, deep inside the Bunker
The Washington Post site is blocked.
The guys at BeijingLUG are reporting some bizarre internet behavior – and verifying that some interesting blocking – never before seen – is happening at the international gateways. Dumb stuff – even Zinio.com, where one downloads electronic editions of major magazines available ONLY with a U.S. credit card, is likewise blocked.
It’s getting really ugly here again. That’s no news.
The question is – why now?
Why, all of a sudden, after a long, long liberalization, have the leadership of China decided that they need to crack down again?
The ostensible reason given is always stabilization.
China’s continued stability depends on a constant inflow of foreign cash and jobs. Here’s the problem. Businessmen in this country need access to their information. If they can’t get it, they will be increasingly inclined to take their business – and their regional headquarters, and their employment – elsewhere.
And when the economy’s growth drops off, and the property bubble bursts, and foreigners stop hiring scads of local workers because they’re shipping out to India or whereever, THEN where is this place going to be?
In The Hutong,
The Chinese government’s recently issued list of 50 banned video and computer games is going to grow, and I wouldn’t rule out the possibility of more aggressive moves against this genre of entertainment.
The problem with games goes beyond this current banning, which primarily content and anti-piracy focused. (I mean, come on – anybody who has played Command & Conquer: Generals can understand why the content nannies in the Beijing government might have a tiny problem with it.)
The real problem is that there is a growing sentiment in the market among parents, teachers, policymakers, and journalists that games are little more than an addictive, anti-social form of time wastage, like gambling without the cash, and that they have no redeeming social value. This sort of perception makes it difficult to build any kind of opposition to these sorts of administrative action, and they make the lives of game manufacturers uncomfortable.
The industry can either say “hey – parents, teachers, and policymakers: bite my game controller,” and deal with the results of that kind of approach, or they can take a more proactive approach to improve the image of gaming among those groups.
Guaranteed, if the industry DOESN’T do anything, these problems will grow. Soon.
You read it here first.
All this brouhaha about Taiwan – is it real, or is it a crimson anchovy?
Joseph Kahn at the New York Times makes a good case to suggest that Jiang Zemin remains firmly in control of security policy in China. Not terribly surprising given Jiang’s role as chairman of the Central Military Commission (junwei).
Some observers question how Jiang, virtually the creator and chief guardian of “the middle road” between conservatives and reformists in Zhongnanhai, could possibly have become a leading voice in government for “the slow road” to reform. There are a range of possible explanations, but the most likely is that he has used his new position to solidify his credentials as a hawk and conservative so that Hu Jintao could afford to play the reformist card. Not exactly “good cop/bad cop,” more like “black cat/white cat.”
What continues to cook my noodle is exactly how concerned junwei remains about Taiwan. The more one looks into the issue of Taiwan and its place in the military doctrine of China, the more one begins to realize that this is likely the reddest of red herrings. This is not to suggest that the possibility of Taiwan going it’s own way doesn’t concern China’s leaders greatly. Rather, that Taiwan is a convenient target on which China could appear to focus its attentions, thus making the world assume that China is focusing its attentions on Taiwan. Clearly, the PLA has to be worried about a broad range of security issues, of which Taiwan is just one. In the land of Sun Tzu, the birthplace the art of strategic distraction, how far could this be from the truth? Regardless, if I were Chen Shui-bian, I would studiously avoid believing my own rhetoric and cool it a bit. The last thing this region needs right now is a tinpot politician with delusions of greatness ready to sacrifice peace in some grand, futile, and horribly costly gesture.
Potential Chinese Geopolitical Security Concerns:
1. A rogue North Korea (not just because of what Kim could do, but because of an expanded U.S. presence in the region.)
2. A re-armed Japan driven by neo-Keynsian thinking (“tired of building bridges nobody uses and roads to nowhere? Hey! I’ve got it! Let’s rebuild our military! Banzai!”)
3. An unstable Russia
4. The growing influence of would-be muslim theocrats in Central Asia
5. Growing American “adventurism” in Southwest Asia
6. A fluid leadership situation in Pakistan leading to instability in the Subcontinent.
PBS Nightly business report quotes David underscoring how the PRC leadership has created a high level of expectations for itself. This is even more the case for the new generation.
Ten truisms about China that usually upset my fellow Americans…and others.
1. China is not a democracy because the Chinese don’t want one. Not yet.
2. The human rights situation in China is steadily improving.
3. The Falun Gong is a genuinely dangerous fringe group and should be controlled, even supressed.
4. Tibet is better off a part of China than independent.
5. The Communist Party is China’s best shot at this time.
6. Most foreign companies who fail in China do so more from incompetence than anything else.
7. The Sino-Foreign joint venture in its classical form is the worst business structure imaginable from a management point of view. Just because some very bright people have made it work does not make this point less valid.
8. What we think China’s real problems are, and what they think they are, are different. Neither side is completely right.
9. IPR issues in China cannot be solved by legal processes alone, or even as a primary focus of effort.
10. Localization is a good thing as long as you dont take it too far. There are some things foreigners still do better than locals.
Article from China Daily/Business Weekly quoting David on Jiang Zemin’s three represents.
Do I like the three represents? Yes.