China cannot risk the global chaos of currency devaluation
It is in any case wrestling with an impossible contradiction: aspiring to hi-tech growth on the economic cutting edge, yet under top-down Communist party control and spreading repression. That way lies the middle income trap, the curse of all authoritarian regimes that fail to reform in time.
What is China doing with its currency, and why?
Apocalyptic aftermath of Chinese warehouse explosion
According to BBC, residents had been meeting with city officials just days ago about the unsafe conditions at this facility and had been reassured the government was on top of things. The fact that the ChiComs are censoring social media as fast as posts can be made criticizing the government tell you what they are really afraid of: losing the Mandate of Heaven.
6 comments:
Red China's Yuan, will be the reserve currency of the world. The $ will be put in the trash bin of history. After the privately owned Federal Reserve Bank. Red China holds the 2nd most American debt. The District of Criminals have sold us out. . We can thank Bill Clinton and Newt Gingrich's - Nafta, Gatt,and Uruguay Rounds. For awakening that sleeping giant. Destroying the blue collar, middle class's job's and manufacturing base. The PTB ,will just start another war .To district the slave minded, sheeple, lemming's and goyium. The dumbed down, patriotic, flag waver's will be out in full force. Beating the drum's of war. How many more American's will forfeit,their life's in vain. For the globalist banker's and multinational corporations. They are just as bad as the Fudd's. How do you wake these people up ? Business as usual. Nothing to see here,move along. Behind enemy lines. AAA/O.,11B20.
The classic mistake people make about how the Chinese Communist Party establishes legitimacy is two-fold. First, they assume that the Chinese rely on the Party to protect them from domestic threats like rapacious businesses, corrupt officials, or Uighur terrorism. It's true that these are the areas which give rise to legitimate complaints, but the Party sells itself primarily as defending China from external threats and enemies, like Japan, and this doesn't make the news because the Chinese people have almost no legitimate complaints about the Party's execution of this core competency.
The second mistake is assuming that Chinese people care about "the economy" rather than about their own personal standard of living. It is important to recognize that economic concerns, for most Chinese, generally fall into the 'domestic' rather than 'foreign' area of concerns, which is to say that they don't regard it as the Party's responsibility...unless the media is portraying some element of the economy as a 'foreign' issue. Hence, when the Chinese economy is portrayed as being in direct competition with other economies, or when it is portrayed as being under some kind of attack, that is regarded as relevant to the legitimacy of the Party. But when it comes to personal finances and standard of living, the Chinese tend to regard this as their own problem. Further, personal standard of living is more important than personal finance, an issue which completely destroys most common Western assumptions about China's dependence on the global economy.
What most external observers miss about China's economic numbers is that the high performance of the Chinese economy on paper comes at a significant expense to the standard of living enjoyed by the vast majority of Chinese people. In essence, they work (and pollute) to manufacture goods which are then shipped overseas in exchange for worthless paper...which is kept by the government, not the people. The massive trade imbalance means the Chinese work without being able to enjoy the fruits of their labor. If all trade with China stopped tomorrow, they would stop working to produce goods that are not consumed in China, and they would start being able to consume goods which previously would have been shipped overseas. That's an immediate and significant gain in standard of living. Over time, the domestic productive capacity could be readjusted to better serve the domestic market, further improving the standard of living for ordinary Chinese. It is true that a large number of the wealthier investment class will be 'soaked' initially, and many may fall out of the wealthy class, but this does not pose any kind of serious legitimacy issue, particularly in comparison with the twin boosts of improved standards of living and national economic independence.
The more alarming mechanic remains the more important legitimacy issue, the Chinese Communist Party selling itself as the defender of the nation from external threats. The Chinese have made significant strides in anti-corruption and anti-terrorism (and isn't averse to casting itself in heroics against business interests). But it is a mistake to assume that these are ends in themselves, they are aimed at improving military readiness for dealing more aggressively with external threats to China as a nation rather than just the Party itself. China has mostly been careful to resolve most international conflicts by diplomacy (often rather undiplomatic diplomacy) rather than direct military action, but it is important to remember that Chinese people do not observe or readily comprehend any fundamental distinction. A win is a win, a low-cost/high-return win is a better win than a high-cost/low-return win, but a win is a win is a win is a win and "diplomacy" is just the shallow end of the military engagement pool.
The Party chooses to win through diplomacy because other countries care about avoiding war and the Chinese simply don't see any difference between talking and shooting except the pragmatic result, which has to factor in the greater costs and lower returns of victory through direct military action. But as the 'soft power' of China fades (with the collapse of economic engagement), there is no psychological barrier to resorting to direct military action. Tens of thousands of Chinese are pushed below subsistence level, often dying of treatable diseases or committing suicide, every year ("done to death"), for the sake of the 'soft power' used to negotiate diplomatic victories. The Chinese people know this perfectly well, and have no real objection to deaths in a 'stand-up fight' instead. It may be that the actual Chinese military personnel, long insulated from being the ones in danger of dying, will turn out to be 'soft' in a real fight...but they genuinely fear losing their relatively privileged position (with good reason), and there is little to no chance that China will run out of highly motivated fresh recruits in an open war.
This doesn't imply that the Chinese Communist Party is in no danger of loosing the Mandate of Heaven...what it means is that they have tools at their disposal for responding to that danger, and foremost among those tools are economic and military warfare against Japan and its allies. Beijing has spent decades, tens of millions of Chinese lives, and astronomical quantities of treasure to prepare for exactly that. We are fools to believe they won't follow through rather than allow themselves to be deposed and killed for their crimes.
Of course, nearly all our public policy for the last several decades has been based on exactly that belief. Even now, with all the writing on the wall, it is a distinct minority of policymakers who believe that Beijing is willing and seriously planning to go to war to protect their legitimacy. Even fewer realize that, in most important respects, America has already lost that war.
Marxism is the mandate of hell, not heaven.
My own prediction is based on the fact that objective truth isn't even a concept to the ChiComs.
Remember the 1980s "bubble" years in Japan, that turned out to be all based on creative accounting and overly optimistic (read: fraudulent) estimates of earnings and profits released to the public? And it went on so long because so many powerful men were afraid of losing face if the truth came out? Now Japan is twenty-five years into a recession with no end in sight. Remember how we all used to be afraid Japan was taking over the world? Now they're just another backwater country with an aging population that doesn't have enough children to replace its own numbers, a shrinking GDP, and a slow-motion economic death-spiral that they can't correct.
Now consider the ChiComs, who have more to lose at the top, and who have even less regard for the truth than the Japanese do.
They've been telling the world for years about their "growing" economy, with implausible numbers released every quarter. I think it's bullshit.
I've said it here before:
Some here may be old enough to recall that the state propaganda organs would publish pictures of the Eight Cosmonaut-Heroes of the Soviet Union on the front page. Then there would be a ghastly accident on the launch pad at Baikonur and five would die. The next day Pravda would publish shrill denials that anything untoward had taken place, plus a crudely airbrushed photo of the Three Cosmonaut-Heroes of the Soviet Union, with the five dead men crudely airbrushed out above the waist, but the three men would still have sixteen legs and feet. Anyone who noticed this and remarked on it in public, of course, was a good candidate for a one-way trip to Siberia, if not the Lubyanka.
If China's officially released "economic growth" figures look too good to be true, even when their debt ratios have passed our own, even when they are devaluing their own currency... well, maybe anyone planning to invest in China should proceed with caution. And maybe people watching that part of the world would do well to expect the unexpected.
Shinzo Abe's fatal missteps at the commemoration of the 70th anniversary of Japan's surrender to the U.S. have basically sealed Japan's fate as regional scapegoat and pretext for increasing Chinese aggression against the norms of international law based on Western standards.
Thanks a lot, Abe.
Of course, this was nothing more or less than what any interested observer might have predicted. Certainly the Chinese Communist Party leadership would have regarded this as a likely (if not guaranteed) outcome. While Chinese provocations and incremental aggressions against the rest of the regional nations are likely to continue apace, Abe (speaking in front of the entire Pacific audience) basically just asked China to make Japan apologize for WWII, and China has long been planning how to accomplish exactly that.
If the U.S. had a State Department worth their used underwear, they'd have communicated to Abe some idea of how important it was to strengthen the commitment of other regional nations to the post-war international order, rather than alienating them. They might even have suggested a way that Japan could make a strong apology which emphasized the role of the United States as an essential force for global and regional prosperity and stability. And if Obama hadn't been squatting in the White House for the last 6 years, Abe might even have been able to deliver such a line without everyone breaking into laughter.
But hey, since we've already basically conceded Eastern Europe to a resurgent Russia, why not let China play at empire in the Pacific?
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