Thursday, August 7, 2014

I was recently asked a series of question for commentary by MODERN WEEKLY a Chinese publication that circulates nationally out of Beijing.

The questions reflect that there are many publications in China (all government owned and controlled) that are not all propaganda.

The questions and my responses in italics.


Q1: Several days ago, the House of Representatives voted to sue President Obama for abusing his power while carrying out his signature "Obamacare" health care reform bill in 2010. Though the Democrats denounced the move as a cynical election-year stunt, Obama has indeed met obstacles in getting his substantial legislation through Congress. With two years and a half left in the Oval Office, has Obama entered the lame-duck session earlier than the conventionalWhat does his governing ability depend on?

The general feeling is that there is little expectation that the Obama Administration will be able to carry out any substantive policy changes in the next two years. If the mid-term elections in November this year give the Republicans control of both the Senate and the House of Representatives the President's prospects will be even more isolated.
The President's lame-duck status has occurred earlier than usual. The cause is the  
polarization of American politics that poses a risk to the American legislative system that is fundamentally based on compromise.

2: This fall's midterm election will be an intense battleground in which the Democrats and Republicans race for Senate and House seats. Apparently what the Democrats worry most is the loss of control in the Senate. What adverse factors do you think the Democrats now face and how will the result of midterm election affect the two parties' move following up?

The fact is that in the House of Representatives there are few truly contested seats. Most Representatives have succeeded in creating what the British call "rotten boroughs", districts that overwhelmingly support the incumbent candidate. More than 80% of House members are almost automatically re-elected. a situation that threatens the foundation of electoral politics, and makes shifts in control unlikely.
Conversely Senators must stand for election throughout a state with a better balance of voters. But here too the polarization of American politics has created sections of the country where opposition parties have an increasingly difficult time being anything more than a minority at election time.
This midterm election is too close to call. If the Democrats lose control of the Senate, there are some who say this may be a better result for the President than the current split between Republicans in the House and Democrats in the Senate. The current split leaves a stalemate. An opposition legislature gives the President a clear adversary.  

Q3: Thorny domestic issues like immigration, health care, economy and so on, which one do you think Obama should put into priority in order to make gains in the next few yearsCan you have an analysis of the two parties’ policy over major domestic issues?

There are many "ifs" in this question.
If the Democrats lose control of both houses of Congress there will be no substantive legislation passed on the President's agenda. Immigration reform will be dead. The Republicans will likely attempt to nibble away at Obamacare along with attempts to push their favored economic concept: tax cuts. This will put the President in a position of vetoing Republican led legislation that will further stall the legislative process.
If the Democrats maintain control of the Senate, the President may try to produce compromise legislation on immigration reform; but the chances are slim. Obamacare will remain safe unless there are further court challenges that prove successful. 
The US economy continues to improve. If that pattern holds, the President's best bets are economic initiatives (including a rise in the federal minimum wage). 

Q4Surveys have repeatedly found Obama's approval ratings on international affairs are at an all-time low. With no apparent solution to end the violence in Ukraine, Gaza, Iraq, Syria and Afghanistan, and little breakthrough in Iran talks, is America having less impact over global issues or is Obama becoming more restrained to "lead" the world? 

The past impact of the US on foreign conflicts may seem larger than it was. That may be what we are seeing now. 
The conflicts in the Middle East have changed little in the last decade. 
The Israeli-Palestinian confrontations move from armed conflict to intractable negotiation. 
The Syrian Civil War continues but the major powers have not intervened directly on either side. If anything that is a positive. 
The Ukraine is President Putin using foreign policy to keep his domestic image popular. While successful, the US and the EU have also coordinated boycott policy to isolate Russia as much as possible. The Russian economy is weak and threatens to weaken. By some measure this is a success of US-EU foreign policy. 
Iran has no obvious imminent solution, but diplomatic talks currently underway will likely lead to a longer-term solution. One thing is clear. Neither side wants or speaks of a conflict.
This leaves the public with headlines about armed conflict in Gaza, civil war in Syria, and armed conflict in the Ukraine. The impressions are fearsome, but the facts support a view that the heavy reliance by the US and the EU on diplomacy and diplomatic tools, including economic boycott, are proving slowly but relatively successful. 
Iran may be the most positive example of change. The very lack of conflict does not make for headlines and therefore gets lost in the noise of combat elsewhere.

Q5: Will the international crises emerging in a row divert U.S.'s attention from Asia, especially as a response to China's economic and military might?

Yes and no. 
There is no question that the areas of conflict in the rest of the world preoccupy both the US and the EU and leave less time and effort for Asia. Despite the continuing conflicts over disputed islands in Asian waters, the threat of armed conflict is more noise than reality. There is the current likelihood of high level negotiations between China and Japan to lower the level of threat and tension; despite continuing verbal bluster to the contrary.
China continues her growth economically and militarily, but the economic rate of growth is reduced. That presents China with domestic concerns to provide for 22 million new jobs every year, continued reform in education, as well as the ongoing policy of fighting corruption at all levels. 
The growth of China's military can be seen two ways. The PLA as recently as the last decade was outmoded. A military based on manpower when modern military challenges are technological, not based on the size of an army and navy. 
Modernization has been the policy of Chinese military growth and will continue to be for the next decade and more. This is a long-term necessity. To others this may seem threatening, but the Chinese military and civilian leadership know that the changes are still catching-up to the reality of modern military needs.

Q6: What do you suggest Obama should do to walk himself out of the predicament and gain more room for administration?

President Obama has a good sense of humour. I expect his answer to this question might be: "Advance the calendar to January 2017 and let me get out of here."
There is little if anything President Obama can do proactively to improve his ability to govern. Too much depends on hope. 
Hope that the Democrats can hold onto the Senate majority. 
Hope that the Republicans continue their internal conflicts between their right wing and their less strident center and thereby weaken their ability to take initiatives. 
The unlikely hope, but still a hope that one of the more conservative Justices of the US Supreme Court retires and gives the President the opportunity for an appointment closer to his political philosophy.
The President can and will take foreign initiatives. He will continue to emphasize diplomacy over military engagement. If successful, this will create a better image for US foreign policy and Mr. Obama's leadership. That can have positive effects on his ability to undertake domestic initiatives.
But the final two years will be what they always are, a struggle against legislative irrelevance as the political reality looks forward to 2016 and an open race for the next American President. 

Friday, August 1, 2014

THE UNIT

A TV series produced. and in some episodes directed and/or written by David Mamet. Since "24" and its aggressive portrayal of an America that is forceful to the point of ignoring the human rights and values the US often extols, I had not seen a similar point of view from the TV/Hollywood Community that often wears liberalism on its sleeve.

David Mamet's platform is a secret military unit (based on a book about the real "Delta Force") "created by Congress in the 1970s that answers only to the President of the US". A Praetorian Guard that reaches out to right wrongs, protect and defend its own. and wreak justice.
The action stories are often cliched, the good guys usually win, only secondary characters are killed in shootouts and firefights that would see casualty rates exceeding 60%. But this is TV tinged with enough plausibility to keep some viewers watching; me included.
I am fascinated largely because I try to understand David Mamet's participation, a writer I have long enjoyed and a deft playwright. Glengarry Glenn Ross is among Mr. Mamet's best in his understanding  and view of man's nature. So how did he become the man behind THE UNIT?
I knew Mr. Mamet as a liberal, which he was. But ten years in China made me miss a lot in the USA. I missed Mr. Mamet's political transition and then caught up it with the following from THE VILLAGE VOICE in NY city, once the bastion of Manhattan liberals:

David Mamet: 

Why I Am No Longer a 'Brain-Dead Liberal'
 

An election-season essay

 By David Mamet Tuesday, Mar 11 2008


John Maynard Keynes was twitted with changing his mind. He replied, "When the facts change, I change my opinion. What do you do, sir?"

My favorite example of a change of mind was Norman Mailer at The Village Voice.

Norman took on the role of drama critic, weighing in on the New York premiere of Waiting for Godot.

Twentieth century's greatest play. Without bothering to go, Mailer called it a piece of garbage.

When he did get around to seeing it, he realized his mistake. He was no longer a Voice columnist, however, so he bought a page in the paper and wrote a retraction, praising the play as the masterpiece it is.

Every playwright's dream.

I once won one of Mary Ann Madden's "Competitions" in New York magazine. The task was to name or create a "10" of anything, and mine was the World's Perfect Theatrical Review. It went like this: "I never understood the theater until last night. Please forgive everything I've ever written. When you read this I'll be dead." That, of course, is the only review anybody in the theater ever wants to get.

My prize, in a stunning example of irony, was a year's subscription to New York, which rag (apart from Mary Ann's "Competition") I considered an open running sore on the body of world literacy—this due to the presence in its pages of John Simon, whose stunning amalgam of superciliousness and savagery, over the years, was appreciated by that readership searching for an endorsement of proactive mediocrity.

But I digress.

I wrote a play about politics (November, Barrymore Theater, Broadway, some seats still available). And as part of the "writing process," as I believe it's called, I started thinking about politics. This comment is not actually as jejune as it might seem. Porgy and Bess is a buncha good songs but has nothing to do with race relations, which is the flag of convenience under which it sailed.

But my play, it turned out, was actually about politics, which is to say, about the polemic between persons of two opposing views. The argument in my play is between a president who is self-interested, corrupt, suborned, and realistic, and his leftish, lesbian, utopian-socialist speechwriter.

The play, while being a laugh a minute, is, when it's at home, a disputation between reason and faith, or perhaps between the conservative (or tragic) view and the liberal (or perfectionist) view. The conservative president in the piece holds that people are each out to make a living, and the best way for government to facilitate that is to stay out of the way, as the inevitable abuses and failures of this system (free-market economics) are less than those of government intervention.

I took the liberal view for many decades, but I believe I have changed my mind.

As a child of the '60s, I accepted as an article of faith that government is corrupt, that business is exploitative, and that people are generally good at heart.

These cherished precepts had, over the years, become ingrained as increasingly impracticable prejudices. Why do I say impracticable? Because although I still held these beliefs, I no longer applied them in my life. How do I know? My wife informed me. We were riding along and listening to NPR. I felt my facial muscles tightening, and the words beginning to form in my mind: Shut the fuck up. "?" she prompted. And her terse, elegant summation, as always, awakened me to a deeper truth: I had been listening to NPR and reading various organs of national opinion for years, wonder and rage contending for pride of place. Further: I found I had been—rather charmingly, I thought—referring to myself for years as "a brain-dead liberal," and to NPR as "National Palestinian Radio."

This is, to me, the synthesis of this worldview with which I now found myself disenchanted: that everything is always wrong.

But in my life, a brief review revealed, everything was not always wrong, and neither was nor is always wrong in the community in which I live, or in my country. Further, it was not always wrong in previous communities in which I lived, and among the various and mobile classes of which I was at various times a part.

And, I wondered, how could I have spent decades thinking that I thought everything was always wrong at the same time that I thought I thought that people were basically good at heart? Which was it? I began to question what I actually thought and found that I do not think that people are basically good at heart; indeed, that view of human nature has both prompted and informed my writing for the last 40 years. I think that people, in circumstances of stress, can behave like swine, and that this, indeed, is not only a fit subject, but the only subject, of drama.

I'd observed that lust, greed, envy, sloth, and their pals are giving the world a good run for its money, but that nonetheless, people in general seem to get from day to day; and that we in the United States get from day to day under rather wonderful and privileged circumstances—that we are not and never have been the villains that some of the world and some of our citizens make us out to be, but that we are a confection of normal (greedy, lustful, duplicitous, corrupt, inspired—in short, human) individuals living under a spectacularly effective compact called the Constitution, and lucky to get it.

For the Constitution, rather than suggesting that all behave in a godlike manner, recognizes that, to the contrary, people are swine and will take any opportunity to subvert any agreement in order to pursue what they consider to be their proper interests.

To that end, the Constitution separates the power of the state into those three branches which are for most of us (I include myself) the only thing we remember from 12 years of schooling.

The Constitution, written by men with some experience of actual government, assumes that the chief executive will work to be king, the Parliament will scheme to sell off the silverware, and the judiciary will consider itself Olympian and do everything it can to much improve (destroy) the work of the other two branches. So the Constitution pits them against each other, in the attempt not to achieve stasis, but rather to allow for the constant corrections necessary to prevent one branch from getting too much power for too long.

Rather brilliant. For, in the abstract, we may envision an Olympian perfection of perfect beings in Washington doing the business of their employers, the people, but any of us who has ever been at a zoning meeting with our property at stake is aware of the urge to cut through all the pernicious bullshit and go straight to firearms.

I found not only that I didn't trust the current government (that, to me, was no surprise), but that an impartial review revealed that the faults of this president—whom I, a good liberal, considered a monster—were little different from those of a president whom I revered.

Bush got us into Iraq, JFK into Vietnam. Bush stole the election in Florida; Kennedy stole his in Chicago. Bush outed a CIA agent; Kennedy left hundreds of them to die in the surf at the Bay of Pigs. Bush lied about his military service; Kennedy accepted a Pulitzer Prize for a book written by Ted Sorenson. Bush was in bed with the Saudis, Kennedy with the Mafia. Oh.

And I began to question my hatred for "the Corporations"—the hatred of which, I found, was but the flip side of my hunger for those goods and services they provide and without which we could not live.

And I began to question my distrust of the "Bad, Bad Military" of my youth, which, I saw, was then and is now made up of those men and women who actually risk their lives to protect the rest of us from a very hostile world. Is the military always right? No. Neither is government, nor are the corporations—they are just different signposts for the particular amalgamation of our country into separate working groups, if you will. Are these groups infallible, free from the possibility of mismanagement, corruption, or crime? No, and neither are you or I. So, taking the tragic view, the question was not "Is everything perfect?" but "How could it be better, at what cost, and according to whose definition?" Put into which form, things appeared to me to be unfolding pretty well.

Do I speak as a member of the "privileged class"? If you will—but classes in the United States are mobile, not static, which is the Marxist view. That is: Immigrants came and continue to come here penniless and can (and do) become rich; the nerd makes a trillion dollars; the single mother, penniless and ignorant of English, sends her two sons to college (my grandmother). On the other hand, the rich and the children of the rich can go belly-up; the hegemony of the railroads is appropriated by the airlines, that of the networks by the Internet; and the individual may and probably will change status more than once within his lifetime.

What about the role of government? Well, in the abstract, coming from my time and background, I thought it was a rather good thing, but tallying up the ledger in those things which affect me and in those things I observe, I am hard-pressed to see an instance where the intervention of the government led to much beyond sorrow.

But if the government is not to intervene, how will we, mere human beings, work it all out?

I wondered and read, and it occurred to me that I knew the answer, and here it is: We just seem to. How do I know? From experience. I referred to my own—take away the director from the staged play and what do you get? Usually a diminution of strife, a shorter rehearsal period, and a better production.

The director, generally, does not cause strife, but his or her presence impels the actors to direct (and manufacture) claims designed to appeal to Authority—that is, to set aside the original goal (staging a play for the audience) and indulge in politics, the purpose of which may be to gain status and influence outside the ostensible goal of the endeavor.

Strand unacquainted bus travelers in the middle of the night, and what do you get? A lot of bad drama, and a shake-and-bake Mayflower Compact. Each, instantly, adds what he or she can to the solution. Why? Each wants, and in fact needs, to contribute—to throw into the pot what gifts each has in order to achieve the overall goal, as well as status in the new-formed community. And so they work it out.

See also that most magnificent of schools, the jury system, where, again, each brings nothing into the room save his or her own prejudices, and, through the course of deliberation, comes not to a perfect solution, but a solution acceptable to the community—a solution the community can live with.

Prior to the midterm elections, my rabbi was taking a lot of flack. The congregation is exclusively liberal, he is a self-described independent (read "conservative"), and he was driving the flock wild. Why? Because a) he never discussed politics; and b) he taught that the quality of political discourse must be addressed first—that Jewish law teaches that it is incumbent upon each person to hear the other fellow out.

And so I, like many of the liberal congregation, began, teeth grinding, to attempt to do so. And in doing so, I recognized that I held those two views of America (politics, government, corporations, the military). One was of a state where everything was magically wrong and must be immediately corrected at any cost; and the other—the world in which I actually functioned day to day—was made up of people, most of whom were reasonably trying to maximize their comfort by getting along with each other (in the workplace, the marketplace, the jury room, on the freeway, even at the school-board meeting).

And I realized that the time had come for me to avow my participation in that America in which I chose to live, and that that country was not a schoolroom teaching values, but a marketplace.

"Aha," you will say, and you are right. I began reading not only the economics of Thomas Sowell (our greatest contemporary philosopher) but Milton Friedman, Paul Johnson, and Shelby Steele, and a host of conservative writers, and found that I agreed with them: a free-market understanding of the world meshes more perfectly with my experience than that idealistic vision I called liberalism.

At the same time, I was writing my play about a president, corrupt, venal, cunning, and vengeful (as I assume all of them are), and two turkeys. And I gave this fictional president a speechwriter who, in his view, is a "brain-dead liberal," much like my earlier self; and in the course of the play, they have to work it out. And they eventually do come to a human understanding of the political process. As I believe I am trying to do, and in which I believe I may be succeeding, and I will try to summarize it in the words of William Allen White.

White was for 40 years the editor of the Emporia Gazette in rural Kansas, and a prominent and powerful political commentator. He was a great friend of Theodore Roosevelt and wrote the best book I've ever read about the presidency. It's called Masks in a Pageant, and it profiles presidents from McKinley to Wilson, and I recommend it unreservedly.

White was a pretty clear-headed man, and he'd seen human nature as few can. (As Twain wrote, you want to understand men, run a country paper.) White knew that people need both to get ahead and to get along, and that they're always working at one or the other, and that government should most probably stay out of the way and let them get on with it. But, he added, there is such a thing as liberalism, and it may be reduced to these saddest of words: " . . . and yet . . . "

The right is mooing about faith, the left is mooing about change, and many are incensed about the fools on the other side—but, at the end of the day, they are the same folks we meet at the water cooler. Happy election season.

Thursday, June 12, 2014

A GOOD EXAMPLE

My blog a couple of days ago dealt in part with China's ability to move quickly in adjusting its economic circumstances. A story from Reuters today follows that is a perfect example of how the one-party system gives China the ability to do what would be difficult if not impossible in governmental systems that have more balanced representation as well as checks and balances.

China ramps up spending to spur economy, central bank sees stable policy

BEIJING Wed Jun 11, 2014 10:30am EDT
1
A labourer, wearing an improvised protective mask, welds steel bars at a residential construction site in Quzhou, Zhejiang province April 3, 2014. REUTERS-Stringer
1 OF 2. A labourer, wearing an improvised protective mask, welds steel bars at a residential construction site in Quzhou, Zhejiang province April 3, 2014.
CREDIT: REUTERS/STRINGER
(Reuters) - China's central bank said on Wednesday it will keep monetary policy steady in 2014, even as the finance ministry said fiscal spending had surged nearly 25 percent in May from a year earlier, highlighting government efforts to energize the slowing economy.
Total fiscal spending in May rose to 1.3 trillion yuan ($208.75 billion), quickening sharply from a 9.6 percent rise in the first four months of the year.
China's cabinet also revealed on Wednesday that it was now planning more big infrastructure projects, including highways, train networks and oil and gas distribution and storage facilities, as part of its efforts to keep the economy growing at a stable rate.
The higher spending comes after the world's second-biggest economy got off to a soft start to the year, growing at its slowest pace in 18 months in the first quarter.
The economy has since shown some signs of stabilizing, but the recovery appears patchy and analysts do not rule out further stimulus measures, especially if the cooling property market starts to deteriorate rapidly.
Fiscal revenues rose 7.2 percent in May from the same month last year, slowing from a 9.2 percent rise in April. The ministry attributed the slower revenue growth in May to the slowdown in the economy and falling property transactions.
China's central bank has been describing its policy stance as "prudent" in recent years, even when it is clearly loosening or tightening the policy reins. At the moment, for instance, authorities are in a gentle easing mode to counter the cooldown in the economy.
The People's Bank of China said the outlook for external demand was uncertain, capital flows were volatile, and financial risks were weighing on the economy.
The PBOC's pursuit of stable monetary policy contrasts strongly with the finance ministry's mini-stimulus, which saw total fiscal spending rise 24.6 percent to 1.3 trillion yuan ($208.75 billion) in May as it brought forward spending sharply, from growth of 9.6 percent in the first four months of the year.
Stimulus measures taken so far by Beijing include speeding up the construction of railway projects and public housing, as well as orders to local governments to fast-forward their fiscal spending to prime the economy for growth.
Central government spending rose 15.8 percent in May from a year earlier while local government expenditure soared 26.9 percent, the finance ministry said.
The PBOC said on Monday it would lower the reserve requirement ratio - the level of reserves banks must hold - for those banks that have sizeable loans to the farming sector and small and medium-sized firms. This is the second reduction following a cut in April aimed at rural banks.
To re-orient China's economy away from exports and investment and towards domestic consumption, China will also speed up interest rate liberalization this year and work on introducing deposit insurance.
Two separate programs that allow foreigners to invest in Chinese capital markets and Chinese investors to invest overseas will also be expanded.
The two schemes are known as qualified foreign institutional investor, or QFII, and qualified domestic institutional investor, or QDII, respectively.
Chinese leaders have ruled out any large stimulus as the country is still nursing the hangover from the 4 trillion yuan ($640 billion) stimulus implemented during the global crisis in 2008-09, which took local governments deep into debt.
Economic data for May released so far indicate the economy remains wobbly, with export growth picking up but imports unexpectedly falling.
Inflation picked up to a four-month high, easing concerns the country was slipping into a deflationary trend but remaining well below the government's comfort zone, giving Beijing ample room to step up policy support if necessary.
The yuan has also appeared to stabilize after a sharp slide earlier in the year, though traders are not sure if the PBOC is comfortable enough with the export recovery to allow the currency to start appreciating again.
(Reporting By China Economics Team; Editing by Kim Coghill and Nick Macfie)

Tuesday, June 10, 2014

A headline in today's SOUTH CHINA MORNING POST:

China accuses Vietnam of ramming its ships 1,416 times around disputed oil rig

The first temptation is to make a joke of it. 
"Nonsense", I wrote to friends and colleagues: "I know it was only 1,412 times." 
But the headline and the culture of numbers from various levels of the Chinese government are not jokes.

"Size Matters" is a recurrent theme in this blog. This is another in the series.

A group in the Propaganda Ministry was convinced that with the specificity of 1,416 rammings, Chinese citizens would be convince their country had been wronged, and the international community would be faced evidence of the seriousness of the issue.

Chinese in all walks of life are prone to a reverence for numbers. 5000 years of history will do that to you. Chinese journalism, particularly in the Party era can be stultifyingly loaded with statistics. 

Chinese journalists are taught to load up on statistics, including minor decimals. (14.62% of people do not believe in...43.67% of people believe.... 41.71% were undecided is a typical report of a survey; yet with all that second decimal "accuracy” missing are the source of the survey, the sample size, and the error rate.) 
The theory is that all those numbers alone will convince readers that the story they are reading is accurate. How could it be wrong if the numbers are carried to the second decimal?

Journalism outside China has learned that while statistics are important, they can also cause readers to glaze over or simply bypass stories. Financial reporting has a particular cross to bear because the financial and economic stories require so many statistics (and graphs) to make their points.

Statistics in China have come to haunt the Party.

China's growth over the last 35 years has defied all economic theory. No country in modern history has had sustained growth of 7-12% for more than 35 years. It cannot be done, is the conventional economic wisdom. This pattern of growth has created a culture of growth within the Party that has made it a slave to the numbers.
There is general agreement about China's growth, but I learned a lesson from a Director of Citibank in Hong Kong more than a decade ago. "We don't believe Chinese statistics, the Director said, "We pay attention to trends, they are more difficult fudge."
Diplomatic language for the fact that Chinese have been lying to each other about their prized statistics since the Mao era. 

False statistics during Mao's time were the cause of tens of millions of deaths from famine when collective farms falsely reported their harvests to protect their jobs and enhance their chances of promotion. Many of those reporting the false statistics died with their numbers.

In modern China Five Year Plans drive the leadership. Setting goals and priorities has been ingrained in Party discipline since the modern Chinese Communist Power took shape in 1949. But now the Party is stuck with a new challenge every five years to say nothing of having to explain why they may have fallen short on some of their goals. 

The Presidents and the Central Committee that rule China have tied their hands in an era when 5 years is a lifetime, certainly a generation. Economic and social conditions change as frequently as semi-annually and sometimes faster than that. 

In a globalized world in a country whose economic strength is challenged by factors outside of its control around the world, the lack of flexibility inherent in a Five Year Plan (even with generalized and fuzzy goals) is a problem. And the problems get pushed downhill from Beijing to the 34 Province level administrative regions in China. 

Each of those regions has a Party Secretary and a hierarchy of officials. Every Party Secretary has ambition; the leaders of the bigger Provinces contemplate their shot at the top in Beijing. Every person under each of those pyramids looks up at their next promotion.

By what standards do they advance?

Now we're back to "Size Matters". 

The statistics count. The numbers, until recently, have been the only guiding measure to be considered for promotion. Not quite true. There is also guangxi, that all-inclusive word that describes your relationships, family and colleagues and mentors and schoolmates. You need both statistics and guangxi to advance in the Party hierarchy.

While the leadership of the Central Government is concerned with meeting its national targets, those targets can only be achieved if the Provincial level is contributing to the growth or minimizing the negative effect slow growth.

Take 2012.

The slowest GDP growth of any Chinese Province was in Beijing, one of China's Provincial-size Municipalities = 7.7% growth but the 290 US$) growth put Beijing 13th on the Provincial list. 

The top growth rate almost doubled Beijing. Guizhou came in at 14% growth but its 110 billion (US$) growth had it 26th on the Provincial list.

Dean Shira and Associates

China-Provincial-GDP-2012-Chart

Play the "Size Matters" game.

China's richest Province is Guangdong (bordering on Hong Kong, one anchor of the Pearl River Delta, 50 million people between Guangzhou, the old Canton, and Hong Kong - an area known on the Mainland as "factory to the world").

Guangdong would rank behind South Korea as the 16th "richest" country in the world. One of 34 administrative regions alone is the 16th richest country in the world on the heels of South Korea one of Asia's tiger economies.

Contrast Guangdong to Tibet, the 31st and last of China's official Provinces (the rest are administrative zones like Hong Kong and Macau). Tibet comes in between Chad and Zimbabwe at 128th on the list of countries ranked by GDP. 

Whatever your political perspective on Tibet, the Province would likely have been near the bottom of the list of the 200 ranked countries when Tibet was independent and among the poorest countries in the world.

China is ranked as the world's second economy measured by GDP (2012 rankings). But at 8.36 trillion dollars China still has a mountain climb to catch up to No. 1 USA at 15.68 trillion dollars (and only 1/4 of China's population).

(The European Union as a whole tops them all with 16.63 trillion GDP in 2012.)

Have your eyes glazed over yet.

There isn't a single statistic I have quoted that cannot be questioned. Canada and India at 1.82 and 1.84 trillion dollar GDPs could have a Talmudic argument over whether their 11th (India) and 12th (Canada rankings are accurate. 

All of these statistics are estimates. It is hoped they are "best" estimates. 

The big question in China is there any "best" estimates. Remember the caution from the Citibank Director: "we don't believe any Chinese statistics."

Consider the challenge to the Chinese leadership at all levels. 

Corruption in China has been raised to a high art since Mao's day. The current administration of Xi Jinping has gone wider and deeper to fight corruption than any previous administration. There are thousands (likely 10s of thousands) of corruption investigations underway in China all the time. How many? It’s a state secret as are so many other facts about China, including many statistical "facts".

The corruption has been shown to be ubiquitous from the village level to within the Ministerial ranks in Beijing. 

Whether you are a Mayor in one of China's 200+ cities with populations of more than 1 million, a Party Secretary in one of China's Provinces, or a member of the Politburo (where the buck finally stops) you know only one thing for sure: you are being lied to. I assume that all of these men (and they are overwhelmingly male an issue I deal with in an earlier blog) do just what the Citibank Director does: they look at trends. But even then, trends can be shaped to lie.

Some of you may say: So what's new? Every executive faces the same challenge. Am I being told the truth? Are the figures I am given accurate and can I rely on them to set policy? Part of the answer lays in the regulated transparency the world outside China has come to require of financial and statistical reporting.

The globalized economy produces information at a rate that is impossible to absorb. It takes algorithms to analyze statistics, to make comparisons, to check and recheck patterns. The Ministries in China have sophisticated software and analytical tools at their command. Their problem is confidence, or more appropriately lack of confidence in the numbers they deal with.

In short the core number 8%, 20%, 36% may or may not be meaningful. Its downhill from there. 8.2%, 20.6%, 36.5%, to the right of the decimal = doubtful at best. 8.23%, 20.68%, 36.43% that second digit to the right of the decimal is for show.

The Chinese single party system has an advantage in dealing with the problems of "Size Matters” and pervasively unreliable statistics. 

The Party's ability to command the economy.

Key is the fact that China's banking system under a variety of different bank brands is owned and operated by the Central Government. The Central Government not only appoints all banking officers but also controls the regulatory apparatus. Interest rates. Deposit margins. Lending priorities. They are all part of a command economy. The Vatican control of the Roman Catholic Church infrastructure and senior officials is a useful way to think of the Chinese system. The problem is the Roman Catholic Church is Lilliputian compared to China. Size Matters.

(For the best description of how China operates on all levels Richard McGregor's THE PARTY remains the best book on the subject.)

The Central Government can reorder Chinese economic priorities with a keystroke, and they regularly do to adjust to domestic and foreign circumstances. The problem comes when those commands make their way down to Provincial, county, city, village and hamlet level. Much can be lost in translation. 

The Party Secretary of Guangdong Province is powerful. he sends far more money to Beijing in taxes and fees than he gets in return. The Guangdong Party Secretary runs the 16th largest economy in the world. He's up there among the OECD rich countries of North America, Europe and right behind South Korea. If a policy command from Beijing threatens his priorities, he tries to finesse the balance between Party loyalist and his Provincial economy.

Down near the bottom of the list Qinghai with 1/33 of Guangdong's GPD can be counted on to be a loyal soldier and follow commands from Beijing. An astute observer of China would point out that guanxi can change any equation. If Qinghai's Party Secretary has a connection in high places he may have more maneuvering room than one might imagine. But then if the guangxi were there why would the Party Secretary be stuck in China's second poorest Province.

The interstices of the Chinese economy are at least as complex as our intestines, but increased to elephant level. Size Matters. 




Monday, June 2, 2014

FROM TODAY'S 2 June 2014 SOUTH CHINA MORNING POST:

The case for eliminating Confucius from China's Confucius Institutes

Kerry Brown makes the case that China should find a new cultural figure to represent it

PUBLISHED : Monday, 02 June, 2014, 3:25am
UPDATED : Monday, 02 June, 2014, 3:25am

Kerry Brown
     
For all the controversy surrounding the opening of hundreds of Confucius Institutes across the world in the last decade, one crucial factor has been overlooked: Confucius himself.
The institutes, funded partially by the Chinese government through its Hanban organisation, have been accused of operating as propaganda outfits. They have been criticised for being part of a sinister global campaign by a cash-rich Communist Party to brainwash outsiders and win the Chinese government illicit influence abroad.
But there is a less dramatic interpretation: the proliferation shows Beijing understands the theory of soft power projection but not its implementation and real practice.
The issue here is simple. If you wanted, as a modern Chinese, to promote a deeper understanding and a more favourable attitude towards your country and its culture, why choose a figure as unattractive, remote and contentious as Confucius to represent you? Confucius is well known, for one thing. But then, Goethe is hardly a household word in America or the UK and yet the Germans have named their cultural outfits abroad after him. And the British Council and Alliance Francaise carry names of no one at all, while doing work which has been compared to that of the Confucius Institute.
The very Communist Party now lionising Confucius attacked and vilified him just four decades ago. Surely it would have been better to use someone with a less difficult recent history to represent the culture abroad.
On top of this, there is the question of the values with which Confucius is associated: patriarchal, hierarchical, and conservative. Why celebrate in 21st century China a figure who is linked to these old ideas when you are also promoting your country as innovative, outward-looking and modern?
Add to this the remoteness and elusiveness of Confucius as a historic figure, and the problem is only compounded. In the Analects, he comes across as stuffy and elliptical. His near contemporary Mencius is at least clearer, if less well known. He communicates in paragraphs rather than staccato ambiguous sentences. And as even the best scholar of Confucius would admit, we know almost nothing about him as an individual. Why hang a soft power campaign on a figure so historically vague?
Finally, there is the biggest issue of all. Chinese history teems through its long and diverse course with wonderful, vivid, inspiring figures. Many of these deserve to be better understood and known than Confucius. Some were political figures, such as the sole female empress Wu Zetian from the 7th century, or the great Qing figures of 300 years ago from emperors Kangxi to Qianlong.
American scholar Patricia Ebrey has just written a good biography of Song emperor Huizong from 1100 showing that he was a painter, calligrapher and poet whose work still holds up today. And unlike with Confucius, we can study works that came directly from Huizong's hands. There was, of course, the slight matter of him being a disastrous political leader - but for a cultural institution, should that disqualify him?
Outside the realm of politics, there are the great Tang poets Du Fu and Li Bai. Their works speak of common human emotions and aspirations in a way that Confucius never does. Or artists like the wonderful Han Gan, whose portraits of horses are still so moving after more than 1,000 years.
Scientists such as Bi Sheng might be worth considering to help illustrate the notion of a China now working on its innovation. A figure like this would also reinforce the message that China was a science leader long before the transformative thinkers of Europe appeared on the scene. With such an array of inspiring figures, why on earth would China choose a philosopher from two-and-a-half millennia ago?
I have a modest proposal to make to the Chinese government: it should seriously consider renaming the new institutions, and there is one truly great figure about whom everyone can agree: Sima Qian, the father of Chinese history, who lived in 100BC, produced a body of work which is accessible but also very modern in its concentration on the psychology of its many subjects.
There is a link, too, with Confucius, because Qian is the sole decent source for the biography of the philosopher - even if his portrait of Confucius is a little unflattering.
And unlike Confucius, Qian is someone we can truly know. The tragic story of his castration after he criticised the emperor, combined with the fact he still continued his great work, sends a great message for victory in the face of disaster.
As a human, a historian of genius and a cultural figure, Qian is truly great, and someone who should be celebrated across the world today. And Sima Qian Institutions, in view of the courage of the person they are named after, would be much harder targets for those looking to criticise them.
Kerry Brown is executive director of the China Studies Centre and professor of Chinese politics at the University of Sydney

THE CASE AGAINST ANYONE REPRESENTING CHINA.
Is there a CHINA? 
Has there ever been a "CHINA" in more than name and geography? 
The Han population of China is "approximately" 92%. A figure that almost dictates the answer to "is there one China". 
Two problems: 
a) The word "approximate" which is mandatory when considering all statistics in and about China unless you have full faith in the source.
b) The reality of the answer to the question of "how many Provinces are there in China?"
Answer: 
23 Provinces, but 34 in total. 
4 Municipalities, 5 Autonomous regions (Provinces with large [usually majority like Tibet] minority populations, 2 Special Administrative Regions (Hong Kong and Macau).
The Central Government of China would be quick to add a 24th "entity": Taiwan.
Think of the "is there a China" question in the context of these divisions. 
One suggested uniting factor is Mandarin, the language taught in all Chinese schools. This permits a universal language. Chinese in all parts of the country can speak with each other. 
But does that make a nation? 
More than India certainly where there is no common language and where 447 languages separate Indians. (14 additional former languages are now extinct.)
But beneath the Mandarin umbrella in China there are many Chinas:
Traditional Chinese classification lists seven groups, comprising:
• Gan
(Jiangxinese)
• Guan
(Mandarin or Beifanghua)
• Kejia
(Hakka)
• Min
(including the Hokkien and Taiwanese variants)
• Wu
(including the Shanghainese variant)
• Xiang
(Hunanese)
• Yue
(including the Cantonese and Taishanese variants)

OK, 7 groups, but then take just one small part of China, called Gan (in green). There are 9 dialects:


洞口
洞口話
怀
懷寧話
撫州話
吉安
吉安話
  • Leiyang dialect
耒陽話
南昌
南昌話
鹹寧話
  • Yichun dialect
宜春
宜春話
  • Yingtan dialect
鷹潭話

Depending on who is counting (we're back to "approximate") there are 200 dialects in China. These are not dying dialects; they are active, alive and well.
My decade of teaching in China began with the first of a series of festivals when I was introduced to the way many freshmen in college congregate and get to know each other: By Province. 
During the annual Lantern Festival when candles are strung under balloons and sent aloft and candles inside paper containers are floated on water, I wandered among the groups of students gathered in their Provincial circles large and small. 
Their common language was their Provincial dialect not the Mandarin they all knew. 
Their food preferences were their Provincial cuisine.
Their mantra was: "My province has the most beautiful women in China" (said with a smile.) 
The men may have been the handsomest but that was an afterthought.
These were not competitive circles. The most beautiful or handsomest or finest food were not aggressive assertions, they were rather the definitions of who they were and where they came from. But beneath that surface there were the cultural differences.
I had Haka students in my classes. They are a niche minority with a strong culture. An educated eye can spot someone who is Haka, a trained ear hears Haka when it is spoken distinct from other Provincial dialects that may be modifications of Mandarin.
In the area where I lived (Shantou about 300 kilometers up the South China Coast from Hong Kong) Chauzhou is the local language. It is an ancient Chinese language that has legitimate claim to being a "foreign" language. 
The first time I went downtown with a group of Mandarin speaking students, we went into a local shop where the shopkeepers and their customers were speaking Chauzhou. My students who were my living dictionaries prepared to translate for me. They looked at me with somewhat pained expressions: "We have no idea what they are saying". So Chauzhou is more than a dialect. Linguists have categories to separate these arcane differences. What it means on the ground is that Chauzhou people have a private language that permits them to escape the earshot of other Chinese and maintain their differences.
It also explains the strength of the local culture that has often been at odds with the parade of authorities from ancient China to modern China.
It also explains why you will find Chauzhou people all over the world. They live by the sea, they live from the sea, their pirates benefitted from the sea, and the world has been their oyster for centuries, nay millennia.
The Chauzhou are Chinese. But while the challenge was never put to Chauzhou in recent times I often wondered which of their "nationalities" would take precedence if they had to choose been China and Chauzhou.
In the China of 2014 much is made of the universal problem of the wealth gap between rich and poor, the growth of the Middle Class in China, and the impact of the new Chinese dollar billionaire class. 
Less is written and spoken of the rural-urban differences in China. This is where culture comes in.
I asked my Chinese girlfriend once whether I would ever meet her father and mother. She comes from a lower middle class small town family. Her father is a migrant worker. Her brother being the male child was the first to get a University education. He became a schoolteacher, married and has the classic one-child (male) family. 
My girlfriend went through mandatory Middle School education and was then on her own. No money for high school and beyond, neglecting the fact that she is her brother's equal, if not superior, in intellectual potential.
"Will I ever meet your father”?
"If you ever met my father he would kill me."
That is traditional China speaking. 
(Disclosure: We are decades apart in age and that barrier alone would have challenged many cultures.)
Outside China you may say the same general spirit can apply. A traditional Jewish family is not overjoyed when a child marries into a Roman Catholic family, much less a Muslim family. Mormons take on risk marrying outside their faith and on and on.
But the "kill" part of my girlfriend's reaction was not entirely in jest. Foreigners; i.e. non-Chinese, are not on in most traditional Chinese families. Sure it is changing among some of the Middle Class and the rich.
One of my students married a U.S. Marine Corps pilot she met in grad school, "coup de foudre" (love at first sight as the French say). Their US civil wedding preceded a traditional Chinese wedding with both families sharing the joy.
Yes there are changes, but they are still the exceptions, far behind the cross-cultural unions of North America and the European Union, where traditional national walls have crumbled to create the opportunity for individuals to transcend their restrictive cultures.
That restive culture is still a part of the many Chinas. And it is not limited to the rural-urban split. I wrote previously of the male dominated culture of the Chinese Communist Party. The reverence for the male child in China transcends other considerations and still dominates the hopes of Chinese couples.
Surveys consistently show the same bias in many other countries too. But there is a growing body of childbearing age in the developed world that answer: "we I/we don't care", or "I'd prefer a daughter/daughters". (Disclosure: I did prefer girls and would again).
None of this begins to address the differences among the "other" Chinese, the minorities.
Back to "approximately".
Officially there are 55 different minorities in China. Their Chinese schooling may be in Mandarin, but their "native" language is much more than a dialect. Their cultures are decidedly different from "Chinese" culture (and Confucius has no role in most of their cultures, but then neither do any of China's ancient royalty.)
Significant minorities? 
8.5% of the Chinese population or about 280-million people, (more than 80% of the population of the USA). 
(The title and thesis of the book that is needed = SIZE MATTERS in China.)
The question of "Who should represent China" in Ms Brown's op ed in the South China Morning Post applies, as does my retort: "Should anyone represent China"? 
Look at the question another way, and Ms Brown implies as much but still believes there is a better representation than Confucius.
Today's China may be an accumulation of its 3-5000 years of history. How many countries and cultures can trace their origins that far back and show the significance that China represents today? Yes the Greeks, the Egyptians, the Persians and some of the tribes of Latin America have long histories, but the links today are more in museums than in daily life.
And China today too can be seen in the same light. Today's young Chinese have little if anything in common with their ancestors. The country has grown so rapidly in the last 50 years, a growth that continues to accelerate, that there are more than generational gaps between grandparents-parents and children.
The family in China remains what it has always been Tradition. Family is the core of Chinese culture. The world's largest annual migration of Chinese going home to celebrate the Chinese New Year with family is the physical manifestation of ancient tradition.
But once home the differences are evident. The love of family is a given, as if it were a law, but the underlying gaps have moved beyond the generational gaps that are worldwide. Grandparents and parents who experienced the Cultural Revolution and periods of famine that cost the lives of 40-million - "approximate" - Chinese. Grandparents and parents whose marriages were often selected by their families or the Maoist era of the The Party. Grandparents and parents who had no restrictions on the size of their families, but whose life expectancy may have been as little as 35-40 years. They are survivors of a time that anyone who has not lived it cannot understand beyond the facts in a book. Grandparents and parents whose education was limited, sometimes non-existent, whose illiteracy rates were 80% plus.
China's population today has universal education through Middle School and literacy stands at 95%. That is not an approximation. It is one of the few statistics that does not seem to be questioned.
(The equivalent US figure is debatable at best. At least 23% of the US population is not functionally literate. Absolute illiteracy adds another 15%. But if "approximate" characterizes Chinese statistics, "debatable" characterizes these US literacy statistics.)
Turn the page to the "new" Chinese, anyone born after 1979 when the current economic miracle was born. The new Chinese have known what every economist would have said was impossible: 35 years of economic growth between 7.5-10+%. Every year better than the year before. Enough food for China to become an exporter of food. 200-400 million people (there goes another "approximate" - a big one) people lifted out of poverty. The number may be approximate, but the fact is indisputable: the largest economic migration out of poverty in human history.
And yet these generations of Chinese are still clustered in the family as they always were. It is not even the analog to the digital generation analogy that works outside China in developed countries. It is the story of the disconnected and the totally connected. The no phone to the smartphone generation gap. Insular isolated China to globalized China. Below the Party political male dominated culture lays the increasingly female educated culture (where have the men gone despite the fact that there are still more men than women in China?) More professional and career women (as is true in other countries as well.) These are educational, and cultural realities that 60-80year olds who come from experiences that are akin to coming from another planet can navigate with difficulty or not at all. 
There is a new China almost every day, an innovative and growing China that strains the young generation to keep up, and keep abreast of wave after wave of change. The older Chinese were left behind some time ago and continue to recede. 
Remember the question?
Who should represent China?
No one is the answer I suggest. 
The old IBM motto might be worth considering Think Ahead. 
Confucius would be bewildered at best in today's China. As Ms Brown points out, much of what we wrote, obtuse as it was, is outdated; and worse: irrelevant. His view of women is abhorrent.
And why is a symbol or representative necessary? 
My argument comes full circle. 
Given the many Chinas I describe, which one is "the China" that will be represented? 

Who will represent the individual Chinese when there is not a collective Chinese?