From Cave to Chairman

The New York Times has a good piece on the soon-to-be president of China, Xi Jinping, and the time he spent in Shaanxi Province's countryside as a youth:

LIANGJIAHE, China — The cave is dim and narrow and musty. A platform bed covered with a reed mat sits by the door. A green canvas satchel and a lantern hang from two rusty nails on a wall — possessions supposedly left behind by a lanky teenage boy from Beijing sent here four decades ago to do hard labor.

“He liked reading books,” said Lü Nengzhong, 80, a farmer who housed the boy, Xi Jinping, for three years. “They were thick books, but I don’t know what they were about. He read until he fell asleep.”

These days, Mr. Xi’s reading materials veer more toward speeches and government planning documents — the vice president of China, age 57, he is expected to take over from Hu Jintao next year as the nation’s top leader. His official biography is being airbrushed. Village officials here have received orders to bar journalists from sniffing around Mr. Xi’s old home.

Liangjiahe is the foundation of a by-the-bootstraps creation myth that Mr. Xi has long cultivated. In an essay for a 2003 book Mr. Xi said his seven years here led to a life transformation. Using standard Marxist-Leninist-Maoist language, he wrote about learning to serve the people.

We “mustn’t stand high above the masses nor consider the masses as our fish and meat,” he said. He went on: “The hard life of the grass roots can cultivate one’s will. With that kind of experience, whatever difficulties I would encounter in the future, I am fully charged with courage to take on any challenge, to believe in the impossible and to conquer obstacles without panic.”

Read On

Photo of Xi Jinping from the AP

I highlighted a few basic facts about Xi Jinping a couple years ago. I noted at the time that I'd heard very positive things about Xi Jinping from people in Xi'an, which is in Shaanxi Province where Xi spent a significant part of his youth and where his father is from. (Read his dad's Wikipedia page. Very prominent guy.)

The best thing I've read on Xi is from a Wikileaks cable from 2007. Fascinating stuff, this. Hearing Xi speak in an unadulterated fashion about the prosperity he oversaw in Zhejiang Province, China's income inequality, and his affinity for World War II films is only something Julian Assange could've provided the world.

Edit: Here is another longer profile on Xi from Reuters.

The China Fantasy

The China Fantasy: How Our Leaders Explain Away Chinese Repression by James Mann is a short, quick-hitting book about, as Mann says in the first sentence of his book, the "China he has encountered outside of China." Mann is a China hand who's spent much of his life watching China from news rooms in the United States. The goal of his book is to make his readers re-think their conceptions about China's political system and the direction China is heading.



Mann says that the US political and media establishments are essentially divided into two camps when it comes to China and its political future - those who believe in the "soothing scenario" and those who believe in the "upheaval scenario."

Those in the "soothing scenario" camp believe that "eventually, increasing trade and prosperity will bring liberalization and democracy to China." Basically, the more China opens up economically, the closer China is getting to real political reform. Liberalization under the current regime is inevitable.

Those in the "upheaval scenario" camp believe that "things can't go on the way they are in China and that eventually the current system will be pushed to the breaking point." Basically, China's current Leninist system will not be able to keep control in the coming years and decades. There will be an earth-shaking upheaval. It's just a matter of when.

Mann doesn't believe either of these conventional wisdom schools of thought. He lays out a convincing argument that there might be a "third scenario:"

What if China manages to continue on its current economic path, yet its political system does not change in any fundamental way? ... What if China becomes fully integrated into the world's economy, yet it remains also entirely undemocratic?

This "third scenario" sounds like a very likely outcome to me. Mann does a good job laying out the reasons why he believes that there is a good chance China develops economically but not politically. In fact, in the weeks since I finished the book I've found his ideas to be an insightful prism through which to view China news.

First, I want to highlight a passage from page 98 and 99 of The China Fantasy:

In May 1998, then secretary of state Madeleine Albright landed in China to lay the groundwork for a visit by President Clinton. She had planned to give a speech in Beijing on the subject of the rule of law. Shortly after she arrived, the China Daily "coincidentally" published a story about what China was planning to do to improve the rule of law. When the time came for her speech, Albright proudly help up that day's newspaper to her audience as a sign the situation in China was already getting better. "Clearly, both your leaders and your citizens recognize the need to strengthen the rule of law," she said. She did not seem to grasp that the newspaper story was not some random, independent bit of journalism but had been timed specifically to influence her and her trip.

In that same spring of 1998, while Clinton was deciding whether to visit China, the Chinese leadership suggested on a number of occasions that change was in the air. There was a lot of talk of political reform, of a new "Beijing spring," of a loosening of controls on political debate. In the end, Clinton decided to make the trip. On the day he arrived in China, a handful of dissidents moved to establish an opposition party, the China Democratic Party. The event, too, was taken as a sign of change in China. That fall, when top representative of the Human Rights Commission was preparing her own trip to China, the authorities said they might consider letting the China Democratic Party operate in some provinces.

Clinton and the UN representative had smooth visits to China. Then, at the end of 1998, after all these prominent visitors had returned home, Chinese authorities made their move. They cracked down on the fledgling party, ended its operations, and sent all its leaders to jail. The talk of a a Beijing spring ended, as it often does, with the reality of Beijing winter.

Now I want to highlight an editorial from The Wall Street Journal from a few weeks ago about comments that Wen Jiabao, the Premier of China, made about political reform:

As the Chinese nation grapples with a series of disasters — floods, landslides and now a plane crash — some in the Party are clearly trying to prevent what they see as another calamity: the further postponement of political reform.

And it is becoming clearer that Premier Wen Jiabao agrees with them.

Symbolism and celebration matter greatly in Chinese politics. When China’s then-paramount leader Deng Xiaoping wanted to restart economic reform in 1992, he made a trip to the south of the country, blessing the Special Economic Zones as the fire of China’s future, singling out Shenzhen in particular.

Over the past weekend, Wen made his eighth visit to Shenzhen since becoming premier. The inspection trip was supposed to be celebratory, praising Deng as the architect of opening and reform, and emphasizing the importance of China not straying from the socialist path of the past 30 years. Wen paid obeisance to much of that sentiment, placing flowers at the foot of a statue to Deng at a Shenzhen exhibit.

Wen’s sojourn to Shenzhen was also intended as support for “talking about economics, not politics” — the central Party dictum under Deng wherein ideology took second place to the great rush toward a more robust economy.

But here Wen went well off-message. Instead of engaging in platitudes, Wen insisted that strengthening socialism depended on producing political reform to protect the gains that economic restructuring had already provided.

Wen did not stop there. People have the right to criticize and monitor the government, he intoned, and the bureaucracy needs to start paying greater attention to those made most vulnerable by economic success. Wen did not bother to use codewords such as “democracy with Chinese characteristics” or “accountability,” and he also lashed out at what he cast as the overcentralized and unrestrained system of power in China. For a trip that was supposed to be a simple celebration of success, Wen’s comments were pointed, and profound reminders of what was still lacking.

None of that made the conservative wing of the Communist Party happy. Cadres in that camp were quick to corral much of Wen’s rhetoric. While the local press felt free to feature the Premier’s remarks in close to full-form, the central Party media offered only truncated versions of Premier’s remarks, and reverted back to an economic focus as the new week began. The official discourse defaulted again to the main line of “no politics, if you please.”

Read On

This seems to be the same thing - CCP leaders giving lip service to political reform - that tricked Madeline Albright over a decade ago. I literally read this story about Wen Jiabao from August 25th minutes after reading that section above from The China Fantasy. It was pretty amazing, actually.

I'm not the only one who sees the emptiness of Wen's comments from late August. Below is an article from The China Media Project highlighting the usage of the words "political reform" from China's leaders:

The issue is now back in the spotlight. Why? Because Premier Wen Jiabao (温家宝) said on a recent visit to Shenzhen to commemorate the city’s 30th anniversary that: “We need not only to promote economic reform, but must also promote political system reforms. Without the guarantee provided by political system reforms, the results of economic reform will be lost, and the goal of modernization cannot be achieved.”

Was this a bold and forward-thinking statement from the Premier? Did Grandpa Wen go off script?

No, not really.

Any statement on political reform is significant. And at the very least, Wen’s statement offers an opportunity for Chinese media to push more searchingly on this issue. But let’s not forget, either, that Wen Jiabao said the exact same thing during this year’s National People’s Congress back in June, when he delivered his government work report.

Read the whole article

Go check out the full article at the CMP. It's a really interesting study.

Over the past few months, I've come to the firm conclusion that there is little to no chance of meaningful political reform in China in the coming years. I don't think I'll be buying into any of these "soothing scenario" arguments any time soon. Saying that, I'm not much of a proponent for the "upheaval scenario" either. The CCP's grip on power continues to impress me.

Weighing in at only a little more than one hundred pages, The China Fantasy reads more like a think-tank paper than a book. I was disappointed it is so short. Mann's writing style and tone are a bit off-putting as well. But I did find the book to be a very helpful tool in my quest for crystallizing what China is and the direction it is going.

The Party

The Chinese blogosphere has been a buzz recently with reviews of the new book - The Party: The Secret World of China's Communist Rulers by Richard McGregor. The book has been getting very favorable reviews (and has already been banned in China). I just finished the book and agree with what most everyone else is saying; The Party is a great read.



Richard McGregor was the Financial Times' China bureau chief for most of the past decade. The goal of his book is to give his reader a vivid picture of the shadowy organization behind the scenes in almost every facet of Chinese life. The Party is an ambitious project. Getting a meaningful picture of the CCP as a foreign journalist is nearly an impossible task.

McGregor writes about this difficulty in the prologue:

An old adage in journalism, that the best story is often the one staring you in the face, holds true in China. The problem in writing about the Party, though, is that, much as the Party might be staring you in the face, you can't easily glare back. The Party and its functions are generally masked or dressed up in other guises. When it interacts with the outside world, the Party is careful to keep a low profile. Sometimes, you can't see the Party at all, which makes the job of reporting how China is governed maddeningly difficult.

McGregor succeeds in his gargantuan task of painting a picture of the Party for his readers. So much useful and little-known information is highlighted. I have a much deeper perspective and knowledge of China after finishing The Party.

The book is broken down into eight chapters and shows how the Party dominates every aspects of Chinese society. I took notes as I was reading. There are dozens of things that I'd like to talk about from this book. But I'm going to limit my thoughts to a couple.

Chapter three in the book is titled, "The Keeper of the Files: The Party and Personnel." The chapter paints a picture of the CCP's "Central Organization Department." From p. 69 in the book:

The party body with ultimate power over personnel, the Central Organization Department, is without a doubt the largest and most powerful human resources body in the world. Barely heard of outside China and little known inside the country itself, beyond official circles, its reach extends into every department of state. Much like the Party itself, the department is a fearsome, secretive hulk, struggling to adapt to a vastly more complex world which has grown up around it in the last three decades.

Delving into the Party's inner political structure that is still largely based on a Leninist-Soviet structure and seeing how they run 10%-GDP-growth-a-year-China is fascinating stuff. McGregor highlights the rotating of CEOs at large Chinese companies to keep them in their place, the administering of personality and lie detector tests for potential cadres, and the myriad of other techniques the Party uses to make sure that their strangle-hold on power remains strong.

Chapter five in the book is titled, "The Shanghai Gang: The Party and Corruption." The "Pearl of the Orient" is painted in a light that I was ignorantly unaware of. From p. 150:

Streams of foreign visitors have been dazzled by the view of Pudong, usually while clikning glasses on the terraces of the upmarket eateries housed in the colonial-era buildings that line the riverfront strip opposite, known as the Bund. The image this view conveyed - that Shanghai had returned to its entrepreneurial heyday - was far from reality. Unlike southern China and the Yangtze delta region, where Deng's policies had bred a risk-taking, private economy, Shanghai was developed as a socialist showcase. Few visitors admiring the skyscrapers realized that most of them had been built by city government companies. Far from being the free-wheeling market place that many visitors believed, Shanghai represented the Party's ideal, a a kind of Singapore-on-steroids, a combination of commercial prosperity and state control.

Deng Xiaoping had chosen southern China instead of Shanghai as the place to build up China's market economy. Things opened up in Shanghai in the early 1990s and the past twenty years has seen the metropolis turn into a major powerhouse. McGregor shows that Shanghai is a different sort of economic center than what most think when they see the glass skyscrapers though.

I would love to go on and continue to highlight more passages of the book. All eight chapters are worthwhile. But I'll just refer you to the book instead.

I'll leave with one final thought. McGregor has an over-arching theme that he comes back to over and over again: the most important thing to the Chinese Communist Party is the Chinese Communist Party. Staying in control of China is the organization's one and only objective. Economic growth, developing the military, carefully-crafted nationalism - everything stoked by the Party, really - is to ensure that it stays in power. Seeing the many positive things going on in China, I often forget this. McGregor has reminded me in a very convincing and scathing fashion of what's going on though.

Will the Boat Sink the Water?

"Water holds up the boat;
water may also sink the boat."
- Emperor Taizong (600 - 649, Tang Dynasty)

In the absolute must-read, Out of Mao's Shadow, Philip P. Pan wrote a chapter about the authors of the run-away best seller, 中国农民调查, or the English title, Will the Boat Sink the Water?: The Life of China's Peasants by husband and wife Chen Guidi and Wu Chuntao. Pan wrote about the controversy the book caused and the libel suit that the husband and wife were charged with from one of the government officials described in their investigation. Pan, a Chinese-American journalist for the Washington Post, actually dressed up as a peasant and attended parts of their trial.

Will the Boat Sink the Water? (I'm just going to refer to it as WTBSTW? from now on) was a hugely influential book in China earlier this decade. The book investigates the horrors that were thrust upon the people of Anhui Province over several years from the mid-1990s to the early-2000s. Initially, the book was published and accepted by censors. It got too big though. Censors got antsy and banned the book. In response, a huge black market was created. It's impossible to say how many counterfeit books were actually sold, but I've seen estimates that WTBSTW? sold between seven and ten million copies in China.

Seeing how much I was moved by Pan's description of the authors and the stir that this book caused, it was a no-brainer that I'd pick up WTBSTW? The book lived up to the hype I'd created for it in my head. WTBSTW? is shocking. There were parts of the book that were hard for me to read. Saying that, it is captivating and is a book that should be part of a person interested in China's library.

To write their book, Chen and Wu traveled to rural backwaters in Anhui Province where China's economic boom is being felt indirectly through migrant labor, as opposed to the riches that urban dwellers are enjoying, and chronicled the stories of peasants who have been tortured, cheated, and crushed by local government officials. The stories they uncovered are gruesome and incredibly violent. There were several instances where I could not believe that I was reading about something that had happened in such recent history. Some of the incidents described sounded like Cultural Revolution madness transplanted into the 1990s.

Most of the violence directed towards the peasants is in the name of taxes. Taxes. Taxes. Taxes for everything. Fees for killing farm animals. Fees for keeping them alive. Peasants featured in the book were exploited and taken advantage in almost every way imaginable. All the while, the local officials lived lives of, relative, luxury and ease.

There are a couple excepts of WTBSTW? that I want to highlight:

In ten years, between 1990 and 2000, the total of all the taxes that the state had extracted from the peasants had increased by a factor of five, from over 8.7 billion yuan to over 46.5 billion yuan. By 2000, the peasants' tax burden averaged 146 yuan per head, six times the average urban resident's tax burden of merely 37 yuan per head. Yet city dwellers' income was on average six times the peasants' income! This in itself is already a grave injustice, but over and above regular taxation, the peasants had to suffer further extortion for village reserves and fees for social services.

I think it's fair to say that Chinese peasants were "squeezed" during the 1990s. As many parts of of China were coming out of a long economic slumber, millions upon millions of peasants had their throats stepped on by local cadres.

Here is another interesting section:

"In the past," he (Lu Zixiu, an activist featured in the book) said, "Mao Zedong said that 'a serious problem is educating the peasants.' I would rather say that the serious problem today is ensuring the interests of the peasants. If the peasants' interests are over-looked, agricultural growth, social development, and political stability are just empty words." He went on to quote Lenin: "Lenin warned that 'capitalism is cropping up among us every moment, every day.' But what's wrong with that? Isn't it better than feudalism cropping up among us every moment, every day?"

Lu summed up his views by quoting Emperor Taizong of the Tang Dynasty. "Over a thousand years ago, Emperor Taizong said, ' Water holds up the boat; water can also sink the boat.' Water here refers to the peasants. Emperor Taizong realized the importance of the peasantry. Each and every dynasty understood full well the importance of the peasantry, but once they are in power, they turn around and exploit the peasantry, even suppress the peasantry. Using history as a mirror, the Chinese Communist Party is faced with the same problem."

China's leadership appears to have learned many of the lessons hammered home in WTBSTW? and its popularity. Most of the events in this book took place before the year 2000 and the current regime in China headed by Hu Jintao and Wen Jiabao, which began in 2002. Things have changed. The New York Times Book Review of WTBSTW? touches on this:

The book also predates the accession of President Hu Jintao and Prime Minister Wen, who have made rural problems a priority. The authors get some credit for that policy shift. But today the book’s focus on excessive taxes feels dated. Mr. Wen abolished the main agricultural tax, freeing peasants of formal taxation for the first time in two millenniums.

Taxes, however, were a symptom. No sooner had the tax burden eased than a new and arguably greater abuse has riled the countryside: rural land grabs by local officials eager to cash in on the real estate boom. Mr. Chen’s and Ms. Wu’s work will not be obsolete soon.

Read the whole review

This book should be read more as a snapshot of a historical period as opposed to a picture of present-day China. I totally agree with the last paragraph in that review though. Despite cleaning up the tax system, there is a lot of discontent in China's countryside still today. The tens of thousands of protests a year that occur there are a symptom of such problems. Although not an exact description of what's going on in China right now, WTBSTW? shows the other side of the coin from the China that most westerners with experience in China are familiar with.

NPR - Religion and One Child Policy in China

My beloved National Public Radio has run a couple of excellent stories over the past few weeks. I was only able to catch bits and pieces of them as they happened live on the radio. But I found time today to catch up on the both of the series - New Believers: A Religious Revolution in China and China's One Child Policy.

The first series - New Believers - was in five parts. The following clips ran Monday through Friday on the program, All Things Considered:

In The Land Of Mao, A Rising Tide Of Christianity
China’s Divided Catholics Seek Reconciliation
Female Imams Blaze Trail Amid China's Muslims
Beijing Finds Common Cause With Chinese Buddhists
China's Leaders Harness Folk Religion For Their Aims

All of these contain either audio slide shows or photos, so be sure to check those out along with the audio.

This is a worthwhile series. It covers a lot of the bases that should be covered in a China religion discussion. In particular, I found the story on the female imams of Henan Province informative. I was not aware that China had such a unique sect of Islam. There are no female imams outside of China.

The second series - China's One Child Policy - was also a week-long series. It ran on the program, Marketplace by American Public Media:

How China's one-child policy came to be
One-child workers: A generation of 'little emperors'
China's only children carry family hope
In China: More kids or more stuff?
Chinese labor pool on the decline
Back Story

Also be sure to check out the "Cast of Characters" at the bottom of the page. It profiles some of the 老百姓 - normal Chinese people - covered in the stories.

These programs too were all very good. I want to highlight one section from the third one, "China's only children carry family hope," that particularly resonated with me:

Scott Tong: For sixth grader Fang Jin Xue, the day starts at seven, sharp, with a...

Fang Rong: Baobei kuai dian!

Hurry up! From her mom. The 12 year-old grunts a word of compliance. And then pulls on her clothes: Green hoodie sweatshirt, black cotton pants and pink eyeglasses. The morning hustle feels like my house on a school day -- but this is a Saturday.

Fang Jin Xue explains why: Tutoring class, every weekend.

Fang Jin Xue: First, two classes of English. Then one science, one writing, one Chinese. Then two math classes. It goes late, so we eat dinner at the school.

Mom Fang Rong nukes some sesame porridge. They wolf it down. And scamper down seven flights of stairs -- no elevator here. It's hectic, mom says. Every family is racing to get its one child ahead.

Fang Rong: Competition is fierce, so we all feel we have to do something, right or wrong. If parents don't put kids in tutoring classes, they panic.

Fang Rong, the mom, is a factory quality control worker, making $7,000 a year, about the median income in urban China. Dad works at a factory too. Together, they spend 10 percent of their income on their daughter's schooling. Surveys suggest other families shell out as much as 50 percent.

It makes for a thriving education market, says Tom Doctoroff at the marketing firm J. Walter Thompson.

Tom Doctoroff: Anything that helps a kid become smarter, and able to compete in an increasingly dog-eat-dog landscape is a priority for the parents. Whether it's English lessons or piano lessons, parents are gonna spend money and time in making sure their kids are equipped to rise.

Read/listen to the entire story

I saw this kind of stuff first-hand. In fact, a huge chunk of my time in China was spent working at a private English training school first as a teacher and then later as a manager.

The school I worked for, which was one of many that the American-owned company operated throughout China, was a weekend "training schools" like the one described in this program. Chinese children would attend a two hour session of classes at the "school" every weekend for 24 weeks (two weekends off every six months). The parents would pay about an average of $200 for a semester of classes.

The classes' costs were based upon how much time was spent with the foreign teacher. If a foreign teacher taught the entire two hour block, it cost $200 a semester. If a foreign teacher only taught thirty minutes of the class, then the classes would be about half that price.

I'm not real crazy about the kind of English training schools that I'm describing. I don't want to say these kinds of training schools are completely worthless. They aren't. I saw some incredibly talented students take great advantage of their weekend English classes. But, in general, the teachers were poorly trained, the books terribly-designed, and the students nearly impossible to control. I would probably not recommend the school, or any like it, to a Chinese family wanting the best for their kid.

The school, started by Americans in the late 1990s, is a huge success financially though. That's just it, the school cares more about making money than the kids learning anything. Because of their $uccess (and the $uccess that other competing schools are finding), these sorts of cash cows schools are going deeper and deeper into the heart of China and millions upon millions more children are going to have the opportunity to attend them. They aren't going away any time soon.

My disillusionment for these kinds of schools surely results from me having worked in one for a while. But it also has to do with the fact that Chinese children have no lives outside of studying. I really wish Chinese kids were given the opportunity to act like kids.

So many of the children I saw on the weekends at my school were worn down. They were being forced by their parents to attend English class, math class, Chinese class, piano, etc. etc. On top of that, they were drowning from homework from their Monday through Friday school, which they usually attended in the morning from 7AMish until noon, in the afternoon from 2:30 to 5:30, and then in the evening from 7:30 until 9:00 five days a week (and sometimes either on Saturday morning or Sunday evening).

I would sometimes tell older Chinese kids about the way I grew up in America. I went to school from 8:30AM until 3:10PM. I played on soccer, basketball, and baseball teams outside of school. I did stuff outside - went swimming, made snowballs, etc. I aimlessly rode my bike. I watched too much TV. I was basically an average, generation-Y, suburban kid. That sounds like heaven to the Chinese children of today.

There are a lot of reasons why Chinese kids face such pressure. More than I can quantify. But there are two things that I feel contribute.

I'm convinced a large part of what I and the NPR story are describing has to do with China's civil society, or lack thereof. China is just barren in so many ways in this area. I'm sure that as China improves, its civil society will improve. But at the moment, during this time of massive change for every person in China, things like community groups, organizations, or even, gulp, religious infrastructure just haven't fully developed. Contemporary China, in many ways, is just too Darwinian and every-man-an-island. This will change. But it will take time.

I'm also confident that the one child policy has a lot to do with the heavy burdens placed on Chinese children. Nearly every young child in China is the hope, joy, and treasure for its parents. It's all or nothing.

Given where China is today, one can understand why Chinese children face the pressures they do and Chinese parents smother their children.

Out of Mao's Shadow

I just finished a haunting book - Out of Mao's Shadow: The Struggle for the Soul of a New China by Philip P. Pan. It is an intense read. Out of all the books on China I've read over the past few months, it might be the most important one that I've picked up. It, along with Wild Grass by Ian Johnson, are certainly the most intense.

Pan was the Washington Post's Beijing bureau chief from 2000 until 2007. His book chronicles the lives of a handful of Chinese people who refuse to submit to the ways of "the Party." A wide range of people fighting the system are featured: a fearless documentary-maker, a truth-seeking journalist, and lawyers trying to develop a rule of law to name a few. The bravery of these people willfully standing up to the government in a fight for justice is inspiring.

Reading this book puts the economic development and all of the positive things we hear about China's rise in perspective. Yes, the masses' lives in China are for the most part improving. But there are a lot of problems. There are millions upon millions of people who are not gaining the benefits that others are.

Out of Mao's Shadow shows through many examples that a large numher of China's problems are the results of poor governance from the CCP. The brutality shown in the book is shocking. I feel like I keep up with China news and politics, but I was stunned time and time again by what I read. The horrors that some government officials have inflicted upon their own people within the past decade are staggering.

One of the chapters that struck me most was the one about the SARS epidemic in 2003 and the subsequent cover-up. The charade that was put on in the face of a serious health crisis was awful. Pan documents the doctors and journalists who put their own reputation on the line to do the work that the government wouldn't: protect the Chinese people from a serious outbreak.

There is a passage I want to highlight from the SARS chapter on pages 202 and 203:

The day after the medical experts visited Heyuan, the local paper published the world's first story about SARS under a headline that read "Epidemic Is Only a Rumor." Officals later acknowledged that their primary concern was the provincial economy. The weeklong Spring Festival holiday was scheduled to begin on February 1, and local businesses were counting on people to spend money. "The most important vacation in the life of Chinese people, the Spring Festival, was coming. We didn't want to spoil everyone's happy time," Feng Shaomin, director of foreign affairs for the Guangdong health department, told my colleague John Pomfret. "You can imagine how people would have reacted if we had told them about the disease. They wouldn't eat out, nor would they go shopping or get together with family members and friends. If we had done it earlier, it would definitely have caused chaos."

But if party officials didn't want to tell the public about the disease before the Spring Festival, they were even less eager to do so after the holiday. On February 10, the Guangdong government announced that three hundred people had been diagnosed with "atypical pneumonia" and five patients had died, but officials assured the world the disease was under control. It was a lie, but all provincial newspapers were ordered to publish it. With the National People's Congress only weeks away, no one wanted to be blamed for spoiling the picture-perfect ceremonies installing Hu Jintao with headlines about a fast-spreading illness of unknown origin. Even after the congress, the cover-up continued. Now officials were worried about the impact on tourism during the next national holiday, the May Day vacation. It seemed like a bad joke: When the best time for the party to break bad news to the public? Never.

Last year, I wrote about the tendency for China's government to put off bad news for the sake of "saving face." Pan's passage here talks about this same phenomenon. I saw this tendency many times while I was in China. There are constant buildups to specific dates or events where the party wants everything to go right.

In recent months, I've seen arguments that the Chinese political model - authoritarian capitalism - is the wave of the future because of its speed and willingness to tackle problems. Many seem to think that democracy's slow pace is being eclipsed by China's lightning-quick autocratic government. Thomas Friedman is one of those who's argued such a premise. Here's a passage from an article he wrote last year:

Watching both the health care and climate/energy debates in Congress, it is hard not to draw the following conclusion: There is only one thing worse than one-party autocracy, and that is one-party democracy, which is what we have in America today.

One-party autocracy certainly has its drawbacks. But when it is led by a reasonably enlightened group of people, as China is today, it can also have great advantages. That one party can just impose the politically difficult but critically important policies needed to move a society forward in the 21st century. It is not an accident that China is committed to overtaking us in electric cars, solar power, energy efficiency, batteries, nuclear power and wind power. China’s leaders understand that in a world of exploding populations and rising emerging-market middle classes, demand for clean power and energy efficiency is going to soar. Beijing wants to make sure that it owns that industry and is ordering the policies to do that, including boosting gasoline prices, from the top down.

Our one-party democracy is worse.

Read On

The United States is an election year. Democrats are going to struggle to retain control in the House and Senate. There is a lot of politicking going on. There probably won't be any meaningful legislation put through in the coming months. America is certainly suffering from inaction in the face of potential catastrophic climate disasters. One could also say that we are not properly handling our economic/housing crises very effectually either.

And yes, China is doing a good job of developing its green industries. But to think that its "reasonably enlightened leaders" are immune to inaction for the sake of politics is just wrong. The leaders of China consistently ignore problems for the sake of saving face or not wanting to stir up trouble before a particular event or anniversary.

I can't fathom using the word "enlightened" to describe China's leadership after reading Out of Mao's Shadow as Friedman did. I've consistently written that China is a confusing place. I still stand by that. There is a lot of good going on in the country. But the bad that is occurring is impossible to ignore. It simply can't be explained away by a high GDP, lots of skyscrapers, or the millions who are getting rich.

I keep endorsing books here on my blog. I'm enjoying all of them. If you are to just pick up one though, I think this might be the one to read. You will now look at China the same after reading Out of Mao's Shadow.

Get Your Kicks on Route 312

I'm reading another great China book. This one is China Road by former NPR correspondent, Rob Gifford.



The book is about Gifford's final days in China before accepting a new assignment with NPR in Europe. Gifford celebrates his leaving China with a six week road trip west on Highway 312 out of Shanghai. He sees his journey on Highway 312 in the 2000s as comparable to rolling down America's famed Route 66 in the 1940s. Gifford's goal is to go from the east coast of Shanghai all the way to the border of Kazakhstan in Xinjiang. Along the way, he wants to figure out what modern China is (or something along those lines).

I'd heard glowing reports about this book. To be honest, I was a little nervous picking it up since I just recently read a book about a road-trip in China - Peter Hessler's Country Driving. My worries were unfounded. The two books are very different and both worthwhile. I'm really enjoying Gifford's insights into a country he understands deeply. His take is very fresh (even though it's three years old, which is forever in China time).

China Road has hit close to home several times. Gifford spends a lot of time in Xi'an and Shaanxi Province on his journey. He has a whole chapter on my favorite holy mountain - The Hermit of Hua Shan - where he finds a daoist hermit living in a cave and chats with him about the meaning of life. He also spends time in Xiahe, the closest to Tibet I ever got.

There have been a lot of passages that I've considered posting about. One stands above the rest for me though. Here is an excerpt from pages 101 and 102 about the terracotta warriors that discussed China in a light that really struck me:

In 230 B.C., he (Qin Shihuang, who built the terracotta army) was the ruler of just one of seven states that existed in northern China, states that had themselves been formed from dozens of smaller ones. China as we know it today had never been unified, and in fact the period from 403B.C. until Qin’s unification, in 221 B.C., was known as the Warring States period. His unification is still hailed by the Communist Party.

I’m not convinced it was such a wonderful event, though. Qin’s unification is the first reason, the political reason, why China’s system never developed the checks and balances that eventually emerged in Europe. Qin unified the states not through skillful negotiations or cunning diplomacy, but by banging a lot of heads together rather hard and with a less than selective use of those thirteen-element-alloy weapons. The doctrine he espoused in both conquest and ruling was known as Legalism. Not a doctrine of laws in the modern sense, it was more a doctrine of rules, rewards, and punishments that brought about obedience. Qin's violent, heavy-handed means of conquest, however, did not prove the best method for ruling the new united territory, and when he died suddenly, aged forty-nine, in 210 B.C., the Qin dynasty ended after just eleven years.

But Qin Shihuang had set a very important precedent, which has survived to this day: that China should be united. It has fallen apart many times between then and now, but each time, someone has said, "China must be reunified," and set about doing so. Chairman Mao was just the most recent in a long line of reunifiers, and if Emperor Qin were to return to China today, he would recognize the mode of government used by the Communist Party.

I have to say that I find this idea rather scary, that two thousand years of history might have done nothing to change the political system of a country. Imagine a Europe today where the Roman Empire had never fallen, that still covered an area from England to North Africa and the Middle East and was run by one man based in Rome, backed by a large army. There you have, roughly, ancient and modern China. The fact that this setup has not changed, or been able to change, in two thousand years must also have huge implications for the question - Can China ever change its political system?

The Roman analogy is an apt one. The tendency is to think of contemporary China in terms of the United States, because of their similarity in geographical size. Actually, to understand China today, the best comparison by far is Roman Europe two thousand years ago: lots of people with different languages and dialects, different customs, different artistic styles, even different cuisines, all with a shared heritage but ultimately held together by force. It makes no more sense to say you're going out for a Chinese meal that to say you are going out for a European one.

The laments you hear constantly in China that the country is too big and there are too many people can both be blamed on Qin Shihuang. At one fell sloop he not only created both of these problems but made sure they would be perpetuated throughout Chinese history. He created a "country" that needed a strong man at the top to hold it together, and that requirement precluded any constraints on his power.

That's some pretty hard-hitting stuff. Any nationalistic Chinese person will most certainly be disgusted by it. In fact, I bet that nearly all Chinese people who read this assessment of their country hate it and think it's false.

I think a lot of what he says in this passage rings true though. When I think of many of the parts of China that I've seen - from the Taklamakan Desert out west to the Himalayas in Yunnan to the karst in Guangxi to the villages in Shaanxi to the capital of Beijing - China can seem more like a collection of cultures on the same continent than a country. Gifford really nails China with this passage. In fact, I think China's leadership has largely come to the same conclusion he has.

Mandarin language has been a requirement in schools since, as Gifford puts it, "the last reunification" under Mao in the 1940s/50s. Before that time, people spoke regional dialects. People older than the age of fifty-five or sixty years-old nowadays very well may speak very broken or no mandarin at all. They simply didn't learn mandarin when they were children. Unifying language has been a key component of China's development.

In addition to language, China has "sinified" areas on the country's periphery with Han immigrants that could, feasibly, be more volatile. Russia did a similar sort of thing during the time of the USSR.

There is a case to be made that Beijing sees things in exactly the same way Gifford lays things out. China seems to, now and since 1949, rule China in a lot of ways with Gifford's assessment in mind.

One is probably right in saying that China's "tying up of the loose ends" and making sure that people who may not feel as connected to "China" is largely working. There are plenty of counterexamples - a couple controversial areas out west come to mind. But for the most part, the "moderate prosperity" (a term that Gifford loves) much of China's enjoyed over the last thirty-plus years has given people on China's fringes the chance at a better life. And that, more than politics opposed to Beijing, has won over a lot of people.

Gifford, again and again, talks about how most Chinese are getting something now that they have never had before - choice. He's not necessarily taking about politics. Instead he's talking about things in daily life. The choices Gifford highlights are the choices between eating noodles or rice for lunch, taking a bus or a cab or biking or driving a car, or having a cell phone with 3G or without. Freedom of choice, Gifford argues, is one of the things that is changing Chinese people more than anything else.

One scene I liked a lot was when Gifford is making his way further and further west and runs into a group of Tibetan construction workers. Gifford asks them about whether being a construction worker is better than what they did before. "Of course it's better," one of the men responds. He then says that he no longer has a 靠天生活. 靠 means rely, 天 means heaven, and 生活 means life. This man no longer relies on the heavens for his subsistence. He has the option of getting on a highway so that he can go to another part of China where he can do something different than what he and his family members have done for generations. Being able to become independent and break free from the shackles of a 靠天生活 is an unbelievable freedom that millions upon millions of Chinese people are finally enjoying.

I'm not sure exactly where I'm going with this post. I started with my praising of the wonderful book, China Road, then went on to promote the premise of China being a flawed model of a country, and then further went on to say that the sinification of China is raising up millions upon millions of people.

I guess one can take from this post that China is a confusing place.

China really could be a number of different countries. China's Henan Province has a population of 97 million people. Shandong Province has a population of 92 million people. Sichuan Province has a population of 82 million people. All of those provinces are more populous than the most populous country in Europe - Germany. On top of that, the food, climate, language, cultures, etc. have extreme diversity.

At the same time, the country is working (both literally and figuratively). Its economy is churning while the rest of the world is in stagnation and most Chinese people have more hope now than they or the past several generations of their families have ever had. There are scores and scores of problems in China and plenty of people getting left behind, but China is working out for a lot of its population.

Gifford doesn't have all the answers to China or a special way of looking at things that makes everything crystal clear in China Road. One day during his road trip he can't fathom why he's leaving China and then a couple pages later on in the book he can't wait to get outside of the country's borders. Such is China. Gifford's book is a fantastic way to attempt to understand China more and there aren't any dull moments accompanying him on his road trip.

人多力量大 - More Population Means More Power

I took a break from my devouring of China-related books a few weeks ago. Instead of delving into non-fiction about the Middle Kingdom, I read Breaks of the Game by David Halberstam. Breaks of the Game is a chronicle of the '79-'80 Portland Trail Blazers and the commercialism of the NBA during that time period. Halberstam's book was a good read, but by the time I was finished, I was dying to get into another China book.

A few days ago, I picked up Red Azalea by Anchee Min. "Wow" is all I can say so far. Red Azalea is a chronicle of Min's experiences during China's Cultural Revolution. For those that don't know, the Cultural Revolution was (according to Wikipedia), "a violent mass movement that resulted in social, political, and economic upheaval in the People’s Republic of China starting in 1966 and ending officially with Mao's death in 1976. It resulted in nation-wide chaos and economic disarray and stagnation."

The Cultural Revolution was surely one of the most horrific time periods in the history of man. Mao Zedong at his absolute worst.

Min tells her story of being corrupted as a child and then being sent off to a work farm as a young woman. I haven't finished the book and am in the middle of her time on the work farm. The stories are just unbelievable. I can't even begin to describe the situations she faced.

The language Min uses is haunting. I can't find confirmation in the book or online, but I believe I read that Min wrote this in English after moving to America. I've been enchanted so far by her words. Her writing, in her second language, is just wonderful.

I'm going to highlight a passage from the book I found particularly interesting. It's from page 99:

Yan (a woman in Min's platoon) and I betrayed no intimacy in public. We silently washed each other's clothes and took trips to fill hot-water containers for each other. We became accustomed to each other's eye signals. Every couple of days we would go separately to meet at the brick factory. Yan would make excuses such as checking the quality of the day's work. I would take the thickest Mao book and my notebook and pretend to find a place to study by myself. We shuttled through the reeds, hand in hand. She would roll up a piece of reed to make a green trumpet. She told me to blow when she blew hers. We made music of the reeds, of the evening. We messed with each other's tones and laughed when the tone sounded like the cough of an old man.

Even when winter came, we continued to meet. Sitting by the bricks, Yan would practice her erhu; I would just lie back and listen. We began to talk about everything, including the most forbidden subject - men.

Yan said that according to her mother, who hated her father, most men were evil. Mother said that she wouldn't ever have produced nine children with my father if she had not wanted to respond to the Party's call, "More population means more power."

Now there is a lot going on in this passage. I particularly want to discuss the end of it.

I've written on my blog before that I always had a lot of fun learning Chinese idioms - aka. 成语. My teacher - 马老师 (Teacher Ma) - and I would often during our classes stray from the book I used and discuss a wide array of topics in Chinese. During those conversations, Teacher Ma, knowing that I liked idioms and four character phrases, would highlight certain phrases that I should know.

One day when discussing the former Chinese leader, Mao Zedong, I asked her for a few classic Mao lines. She gave me several, but only two have stuck with me to today.

One is 人定胜天 - rén dìng shèng tiān - which means "man's determination can conquer nature." Seeing some of the projects that Mao initiated during his time as China's leader - Beijing's underground city for one - it's easy to see why Mao had an affinity for this idiom.

The other Mao-ism that's stuck with me is 人多力量大 - rén duō lì liàng dà - which is the phrase Min wrote about in the passage above - "more population means more power."

I just did a bit of searching for some more info about this Mao quote. I'm not finding much in English. I found a bit in Chinese here. It's hard for me to translate the contents of this verbatim, but from what I gather, during the disastrous "Great Leap Forward" in the late 1950s, Mao promoted the idea that it was every good country man's duty to produce as many children as possible. That's the gist of Min's writing in the passage too.

In Mao's mind, China's already large population in the 1950s was one of the country's greatest assets and a possible equalizer with the rest of the world. Wanting to be a superpower, Mao encouraged Chinese people to have as many children as possible.

I don't think I'm going out on a limb to say that this population growth encouraging is one of Mao's many failures. The most obvious results of the population boom under Mao was the "one child policy," which was introduced in 1978 and implemented in 1979. Mao died in 1976. To counteract what Beijing saw as one of China's most severe problems, the country, almost immediately after Mao's death, used population-control to reverse the fact China had too many people.

Is Mao's declaration and promotion of 人多力量大 the reason why China has 1.3 billion people today? I don't really think that one can say for certain. But looking at charts of China's population, one could argue that such edicts had an effect (Mao had population-growth campaigns in the mid-1950s):




Image from digitalsurvivors.com

On that second image, note that the population dip was due to starvation during the Great Leap Forward. Despite that blip, population was mostly going up at a pretty steady pace.

Whether historians can blame Mao for China's over-population or not, the promotion of 人多力量大 was, I think, misguided. China's population today, thirty years after harsh population controls were put in place, is still the root of many of China's domestic problems.

Goodbye Google.cn

It sounds as if there are no more compromises and that the end of Google.cn is imminent.

From The Financial Times:

Image from The New York Times

Google has drawn up detailed plans for the closure of its Chinese search engine and is now “99.9 per cent” certain to go ahead as talks over censorship with the Chinese authorities have reached an apparent impasse, according to a person familiar with the company’s thinking.

In a hardening of positions on both sides, the Chinese government also on Friday threw down a direct public challenge to the US search company, with a warning that it was not prepared to compromise on internet censorship to stop Google leaving.

The signs that Google was on the brink of closing Google.cn, its local search service in China, came two months after it promised to stop bowing to censorship there. But while a decision could be made very soon, the company is likely to take some time to follow through with the plan as it seeks an orderly closure and takes steps to protect local employees from retaliation by the authorities, the person familiar with its position said.

Google is also seeking ways to keep its other operations in China going, although some executives fear that a backlash from the Chinese authorities could make it almost impossible to keep a presence in the country.

Read On

This is a sad story.

Ultimately, Google is doing the right thing. In the past, I've thought that a watered-down Google is better for China than no Google at all. But my opinion on that has changed. China is going to be worse off for not having Google, but given the standoff that occurred in January, I'm happy that Google is taking a stand.

Li Yizhong, the minister for industry and information technology in China, said the following in the article above:

“If [Google] takes steps that violate Chinese laws, that would be unfriendly, that would be irresponsible, and they would have to bear the consequences.”

...

“[Google] has taken 30 per cent of the Chinese search market.

“If you don’t leave, China will welcome that, if you don’t leave, it will be beneficial for the development of the internet in China.”

No, it won't be beneficial for the development of China's internet. The more than western companies kowtow to China, the worse China's internet will be. Foreign internet companies that can act as a pull in the direction of more freedom will in fact be the ones "beneficial to the development of the internet is China."

I understand China's desire for "status quo" and "stability." Yes, the country is transforming quickly. Yes, there are a number of volatile issues within Chinese society. But draconian rules halting the flow of information are silly and childish.

The internet flattens the world. It opens up information that would otherwise be unavailable. It connects people throughout the globe that would otherwise not have the ability to communicate.

Google is the ultimate expression of the internet, organizing the mountains of information out there for users to make sense of. An uncensored Google is not evil. It is beautiful. It's a shame that Chinese people may not have access to this wonderful tool going forward.

From what I understand, Google.cn will go offline and Google's offices in China are about to shut their doors. I'm curious about Gmail and, the international version, Google.com though. I have to imagine that those sites will suffer the fate of Facebook, Blogspot, Twitter, and the whole lot of other blocked sites in China.

You Are Now Free to Move About the Country

China will begin instituting policy that should help the people on the fringes of society better integrate.

From The Washington Post:

Image taken in 2006 along the 长江 (Yangtze River)

BEIJING -- China will grant young migrant workers more social service benefits and help them rent or buy homes in smaller cities, a government adviser said Tuesday.

For decades, China has restrained migration by linking access to low-cost public services like health care and education to a person's registered place of residence. The system means rural migrants in Shanghai, Beijing and other big cities are deprived many essential benefits and services.

Han Jun, a senior research fellow at the Development Research Center, a think tank that advises China's Cabinet, said a policy paper released last month made it clear that the government is "striving for substantial reform of the household registration system" to allow migrants, especially younger ones, to register in cities.

However, the reform plan aims to get migrants registered in cities and townships close to their home villages - not expensive places like Beijing or Shanghai where migrants flock for construction and service sector jobs.

"A farmer would have to live several lifetimes before he could afford an apartment in Beijing," Han said. "This reform will be mainly focused on moving rural migrants into smaller cities and townships."

Read On

This policy shift should help the swelling of the country's largest urban centers - Shanghai, Beijing, and Guangzhou. These cities are already megalopolises. Cities that large really don't need to get much bigger. I suppose cities can theoretically grow forever, but at some point, 10+ million person cities just become too much to handle.

I see, and I think the China government sees, a great opportunity in the coming years and decades to develop its second-tier and third-tier cities.

Chinese cities are broken down into "tiers." I've heard these tiers referenced many times while in China. I just did a quick Google search to find lists of these tiers, but had a hard time coming up with much (not sure how to search for this in Chinese on Baidu).

I finally found a blogger who's done the research and who has compiled a list of China's tier system though. From the "Eric in Beijing" blog's "Which Tier is Your Chinese City?" post:

First tier
* Beijing
* Guangzhou
* Shanghai
* Xian (what are they smoking?!)

Second tier
* Changchun
* Chengdu
* Chongqing
* Dalian
* Guiyang
* Haikou
* Hangzhou
* Harbin
* Hefei
* Kunming
* Lanzhou
* Nanjing
* Ningbo
* Qingdao
* Sanya
* Shantou
* Shaoxing
* Shenyang
* Shenzhen
* Suzhou
* Taiyuan
* Tianjin
* Urumqi
* Wenzhou
* Wuhan
* Xiamen
* Xian
* Zhuhai

Third tier
None of the articles I looked at listed the third tier cities by name. By process of elimination, if you're in a Chinese city that's not listed as first tier or second tier, then you must be in a third tier city.

Fourth Tier
The sticks.

I agree with Eric that Xi'an is not a first-tier city. It isn't. It's a solid second-tier city.

Do you recognize many of the second-tier cities on that list? Unless you've lived in China or have a vested interest in China, you probably don't. You should get familiar with them though. The development of China's second-tier cities is going nuts and these cities are the ones that are going to really boom in the coming years.

Second-tier and third-tier cities will largely grow by people coming to them from the countryside. Like the rest of the world, very few people want to continue living in rural areas. The pull of cities is just too appealing. Rural Chinese are doing whatever it takes - working in factories, restaurants, and menial jobs - to get to cities.

Providing benefits to migrants leaving the countryside is a huge step in the right direction for China. I understand the reasons why every Chinese person in the countryside couldn't, and shouldn't, leave the countryside at once. The pressure on resources and space and jobs would just be too intense. Conceding that, China's 户口 (hukou) system is brutal and needs to be reformed.

The title of this post - You Are Now Free to Move About the Country - is the tagline for America's Southwest Airlines (what many consider to be the best airline in the States). The Chinese are not completely free to go wherever they want. But they appear to becoming freer. And the freedom to move is a freedom that every person in the world should have.

Superfusion by Zachary Karabell: Interview

Last week, author Zachary Karabell was generous enough to take some time out of his busy schedule to discuss his new book - Superfusion: How China and America Became One Economy and Why the World's Prosperity Depends on It - with me.

Here is Mr. Karabell's bio from the back jacket of his book:

Zachary Karabell is president of River Twice Research, where he analyzes economic and political trends, and is a senior adviser for Business for Social Responsibility. He received a Ph.D. from Harvard University and was formerly chief economist and president of a New York-based asset management firm. He is the author of Parting the Desert, The Last Campaign, and Peace Be Upon You. He is a regular commentator on CNBC and a contributor to Newsweek, The Wall St. Journal, The Los Angeles Times, The New York Times, Foreign Affairs, and The Washington Post.

Below is a transcript of my discussion with Mr. Karabell:



Mark's China Blog (MCB): Early in Superfusion, you say we have two paths - working with China to refine and develop the system for mutual benefit or falling back to "us and them." You then say that the world of nation-states with national economies is uncertain and that 2050 won't look like 1950. Could you explain what this world you envision looks like and how we could get there?

Zachary Karabell (ZK): Imagine telling a Parisian in 1950 that, in the year 2000, decisions regarding France would be made in Brussels. Nobody back then would've believed that Europe, a collection of nation-states, would be a cohesive unit known as the European Union. My point is that America could very well be tied to China in 2050 in a way that seems unimaginable now.

MCB: About Deng's quote - "Black cat, white cat, what does it matter as long as it catches mice?" - and his ideology in general, you say, "his ability to hold such contradictory beliefs shows he is either a genius or a madman." China, for the most part, has stuck with Deng's system. Towards the end of the book, you question whether the Chinese children of today - who've grown up with a remarkably comfortable and stable life - will demand more political freedom when they are adults. How long do you see Deng's contradiction being sustainable?

ZK: It's a mistake to assume that Jeffersonian liberal democracy is the only system that can meet people's needs and that the Chinese people will demand elections. People need to feel security and in control of their lives. As long as that occurs, the specific form could look like a lot of different things. The Chinese Communist Party needs to be responsible to its citizens and, for the time being, appears to be.

MCB: Your section about data and figures reminded me a lot of one of my all-time favorite books, Moneyball, by Michael Lewis. In that book, Lewis highlights the thinkers in baseball who challenged baseball's conventional wisdom. In Superfusion, you challenge a lot of the numbers - balance of trade, the consumer price index, and productivity - that people use to interpret contemporary national economies. When it comes to understanding the world economy, what numbers do you trust?

ZK: Very few numbers give us a good picture. It's not that I distrust numbers, I don't think they're made up, it's just that I see data as being incapable of telling us a complete story. Official numbers miss capital and idea flow. They miss how businesses are run.

Consumption of raw materials is a number that I look at. Numbers on trade can tell us a lot. One needs to go beneath the newspaper headlines. Look at the numbers used to compile official statistics.

MCB: I found your section on Chinese banks really good. On my blog, I've written a lot about the massive loans given out by Chinese banks this year. You say that a lot of the concerns about such lending is misguided and that loans are simply a means for modernization from the state and that the Chinese believe repayment isn't as important as "getting things done." Is China concerned about the repayment of loans given out this year? And if the US - and the rest of the West - stays in a funk for a year or two longer, can this kind of lending be sustained?

ZK: Comparing Chinese banks to western banks is a mistake. It's not that China doesn't care about repayment. They want the loans to be repaid. But right now, China is building its infrastructure. Internal loans to build up the country are going to be productive no matter what happens.

MCB: In the book, you write, "What China did in the 90s took the states of western Europe more than a century and the US more than five decades." Obviously, the costs of China's industrial revolution are being felt in the form of unfathomable pollution. The thing that concerns me most, having Xi'an as my home base in China, is north China's lack of water. The Himalayas' glaciers are melting. The Yellow River is dying. Northern Chinese cities are being built on falling water tables. How can this dire situation be resolved?

ZK: North China has the double whammy of being the site of the communist industrial revolution under Mao as well as a site of the '90s industrial revolution.

There is a huge draw on the resources there. I can't discount the severity of the situation. Alternative energy isn't an alternative to coal in northern China. But the government seems to have a grasp for where the crisis point is. I sense urgency from the government. They are moving quickly.

One thing about an autocratic government is that when faced with a sense of urgency, they have a much greater ability to address these problems than democratic governments.

MCB: You say, "China's transtition from Maoism to the market has been met with skepticism and mistrust rather than embrace." What does this say about America and the American people?

ZK: Our skepticism and mistrust say that we are having trouble dealing with losing the status of being "on top."

MCB: When the debate about China joining the WTO was going on in '99, the US was obsessed with Lewinski. You talk about how the world missed the development of Chimerica since "nobody analyzes the global economy as a system and because nobody developed a theoretical framework to predict it." Now, after coming back to America after three and a half years in China, I'm hearing reports about China all the time on NPR (National Public Radio). I haven't fully jumped back into the US media though. Does the US know what's going on in China and with Chimerica?

ZK: Americans aren't clueless that China's become a much bigger deal. People are mostly familiar with the populist rhetoric and not much else though. The implications of Chimerica are pretty beneath the radar. Americans, by and large, don't understand the greater meaning of its relationship with China.

MCB: Your discussion of US businesses being lenient on property infractions in the hopes of cashing in on the Chinese market was very interesting. I've written on my blog several times about "shanzhai culture" and the deep and intricate networks of intellectual property infractions in China. Can this shanzhai culture be overcome?

ZK: Complaining about shanzhai has been en vogue for years now. Innovation is going to be key in overcoming the intellectual property infractions occurring in China. Companies are going to have to make it difficult for people to extract income off of the Chinese copy of the product.

MCB: You say that the big difference between China and Japan's rise is that the Chinese have a culture of consumption. If you spend time at a Chinese night club or mall, this embrace of consumption is abundantly clear. But when I lived in China and told Chinese people about buying a house with a mortgage or having a wallet full of credit cards, they usually cringed. Can Chinese consumers come to embrace the culture of credit cards and debt?

ZK: Chinese people are already embracing credit cards and using debt. In fact, not enough companies are offering Chinese people credit cards. Once the Chinese trust paying online, that will also help encourage their consumptive culture.

MCB: For a long time, China's used "poverty alleviation" as an excuse for human rights abuses. Tibetans and Uighurs are obviously getting fed up though. Are these "harmony" issues critical to China's long-term, big-picture goals?

ZK: China needs to be "harmonious enough." Security of the Chinese people matters. The Chinese government understands that keeping people happy is a balancing act. Simply suppressing those angry with the system is not a viable long-term answer.

MCB: You talk extensively about the "feel" in cities like Shanghai and the general optimism of the country. Is China the new "land of opportunity?" Does that "feel" extend to those in the countryside or to migrant workers who've gone to the big city?

ZK: Well, I don't think anyone in China would use the word "land of opportunity." Those words are uniquely American. But the simple fact that migrants are doing everything they can to get out of the countryside and to the cities shows that the "feel" does extend to the entire country.

MCB: The Chinese stock market was up 90% on the year back in August. Housing prices in many cities are at all-time highs. Is there a bubble going on right now?

ZK: It doesn't matter if there is a bubble being created right now. The government popped a bubble in Shanghai in '04. They'll blow them up and pop them as they see fit. The government isn't afraid to intervene and pop. Popping bubbles isn't going to be a derailing phenomenon.

MCB: Does Obama have a coherent China policy?

ZK: Yes, Obama has a coherent China policy. Neither Obama nor the Chinese government seems ready to confront the existence of Chimerica though. Obama is going to China in November. He should have America's top business leaders with him on that trip. Another major need between the Obama administration and the Chinese government is better interest rate coordination.

MCB: I know you're very busy right now, Mr. Karabell. Thank you for sharing your time with me.

ZK: You're very welcome.

I want to thank Mr. Karabell and his publishing company, Simon and Shuster, for arranging this interview and asking me to review Superfusion.

Superfusion by Zachary Karabell: Review

Recent economic travails have triggered intensive questioning of the financial system that was created by the United States and warped by Wall Street. That has led many to reconsider America's place in the world and wonder whether this is indeed the twilight of American power. Yet what remains largely unchallenged is the assumption that the world remains a collection of nations, markets, and companies. For much of the twentieth century, that made sense. No longer. What is perceived as the rise of China is actually much more than that. The most important story is one that yet to be explicitly told, largely because most don't yet recognize what has taken place. In short, over the past two decades, China and the United States have become one intertwined, integrated hypereconomy: Chimerica.

Superfusion: How China and America Became One and Why the World's Prosperity Depends On It, page 3

Over the next three hundred pages of Superfusion, author Zachary Karabell expounds in great detail and in a lively manner how Chimerica came to be and its implications for the future of our world.

Karabell begins the book (to be released tomorrow, October 13, 2009, by Simon & Shuster) by painting a picture of China in the late 1970s just after Mao Zedong passed away. Deng Xiaoping's personality, his breaking with the planned economy, and his wide array of platitudes ("We mustn't stop eating for the fear of choking," "Black cat, white cat, what does it matter as long as it catches mice?" etc.) are chronicled in great detail.

The book then gives an account of "middling US companies" who in the late-80s and early-90s remade themselves into successes in a liberalized China. I really enjoyed this section of the book. Karabell describes how and why companies like KFC, Avon, and the NBA were able to corner the Chinese market and become runaway successes in the country. Not having an extensive background in business, I appreciated these stories a lot.

In addition to case studies of businesses, the book also delves into the political foundation of Chimerica. China's entry into the WTO, the relationship of China and America after 9/11, and CNOOC's botched purchase of UNOCAL are all discussed.

One of the main themes of Superfusion is that nobody, neither the governments of China or the United States nor the populations of either country, saw the big-picture implications of the two countries growing closer and more intertwined.

Karabell argues that very few numbers paint an accurate picture of Chimerica. Statistics, he says, that economists like to look at - balance of trade, consumer price index, and "productivity" - can't capture the nature of the countries' relationship.

All of these factors explain how it is possible for China and the United States to have converged over the past 20 years without anyone noticing. No one is paid to notice; no one has developed theoretical frameworks that would predict it; and almost everyone still thinks of China and the United States as two distinct countries with two sovereign national economies.

Superfusion, page 151

This section of Superfusion on the use of numbers and statistics reminded me a lot of one of my favorite books - Moneyball, by Michael Lewis. In that book, Lewis describes the historian/philosopher of baseball, Bill James, and his destruction of of baseball's accepted conventional wisdom. James says one shouldn't pay attention to batting average, RBIs, or stolen bases to determine baseball players' performance. Instead, James argues, one should focus on statistics like on base percentage, slugging percentage, and home runs.

Unlike James (and Lewis' description of James' ideas in Moneyball), I'm not sure Karabell ever tells the reader exactly what number should be looked at when it comes to Chimerica. But to be fair, I believe Karabell's point is that truly descriptive statistics don't exist. Instead, he thinks a broader view is required.

This section on economic statistics and how we perceive the numbers might have been my favorite in Superfusion.

Seeing that this book is just coming out now in the fall of 2009, Karabell discusses, in depth, the financial crisis and Chimerica's response to it. Karabell describes China and America's bank lending, their stock markets, and their stimulus packages. I don't want to give too much away in this review, but I will say that Karabell's convincing arguments have shifted my views and understanding on the current state of affairs in each country and the fused Chimerica.

I really enjoyed Superfusion. If you are a regular reader of Marks China Blog, you should pick up a copy. The fusion of China and America - Chimerica - is something the people of the world needs a solid understanding of. Karabell's Superfusion has done an excellent job of making such an understanding a possibility.

Tomorrow, I'll post the transcript of an interview I had with Karabell last week.

Obama's Prize

The announcement of Obama's award is perplexing everyone in the world, including the Chinese.

From AFP:

WASHINGTON — China's dissidents are voicing unease about President Barack Obama's Nobel Peace Prize, saying that the award could have been effective in promoting human rights in their country.

...

Huang Ciping, an engineer turned activist who is executive director of Wei's Washington-based foundation, said that China "has come to such a turning point that the prize might have helped."

"The Nobel Peace Prize committee has the full right to decide to give coal to those who suffer and struggle or to present flowers to the powerful," she said.

But she said of the decision: "It is both a pity for the Chinese people and a danger to world peace."

Rebiya Kadeer, the exiled leader of China's Uighur minority, congratulated Obama but called on him to use the added prestige to put pressure on "dictatorships like China."

"I am very happy that he got it. Now he has to do something with the award. It raises expectations on him to stand up for oppressed nations," she told AFP.

Read the whole article

I was shocked to hear that Obama won the Nobel Prize yesterday. My first reaction to the news was like many others, "What for?" From the sounds of it, such was Obama's reaction too.

Domestically, Obama really doesn't need this right now. It gives his right-wing critics more ammunition for the idea that he is some kind of messiah-like figure (and this is a meme that American's have been pretty open to accepting). But unlike wing-nuts, I don't think Obama deserves any criticism here. It's not like he lobbied to win this thing. The award was given to him unprovoked and it's obvious that it caught Obama by surprise, just like it did everybody else.

I believe there is truth to what the people in the above article are saying. The opportunity cost of Obama winning is great. There are lots of people, especially within China, who are deserving of the award.

Hopefully, this award spurs Obama and America to improve itself. For better or worse, the US President is still the most important person on the planet. If the prize can kick-start a renewed spirit here, Obama could prove to be a great selection.

Ryan Jiang's Podcasts

A good friend of mine from Xi'an, Ryan Jiang, has begun a radio show on China. You should check it out. Here is an episode on differing perspectives of contemporary China and here is an episode on 1989. There are more episodes on his main page.

I met Ryan during my first year in China. He is one of the smartest and most open-minded people I met in China. He is now studying and living abroad.

October 1st Approaches

This is a big week for China and the CCP.

From USA Today:

Image from Reuters (click this link to see a large collection of incredible photos of the anniversary's preparation)

BEIJING — With armed SWAT teams, 1 million security volunteers, a celebrity-packed hit movie and a barrage of propaganda, Beijing is gearing up for a burst of pride and patriotism for next week's 60th birthday of the People's Republic of China.

On Thursday, six decades after Chairman Mao Zedong climbed the Tiananmen gate to declare the founding of Communist China, President Hu Jintao will preside over a huge military parade to mark the nation's rising strength and prosperity — and its continuing one-party rule.

After the successful, ambitious Olympics opening ceremony in Beijing last year, the government is leaving nothing to chance.

To prevent collisions when 150 planes do a ceremonial flyover, people are banned from holding kites or balloons or from releasing pigeons in the city's center.

In addition to the heavy police presence already visible, backed by volunteers wearing red armbands, Chinese security chief Zhou Yongkang mobilized what he described as a "security moat" of checkpoints in neighboring provinces to keep out potential protesters, according to the state-run Xinhua News Agency. Zhou has called for a "people's war" to guarantee that nothing — and no one — disrupts the celebration.

Read On

When I heard about this celebration last winter, I didn't have a problem with it. To me, it seemed like the Chinese version of similar celebrations that happen in America and other countries throughout the world.

At some point between last January and now though, I soured on this kind of propaganda. I'm not sure when this exactly happened, but I'm not nearly as tolerant of this kind of stuff as I was. Leaving China, and before that preparing to leave China, surely has something to do with my disillusionment. I believe that my fundamental attitude toward the China and its policies changed while I was living in the Middle Kingdom too.

When I first went to China in early 2006, I didn't know much about China or the CCP. I had a very negative impression going in from the media in the West. Over time, though, I saw that, for the most part, China is a country on the move and Chinese people are generally happy and their lives are getting better. For these reasons, I became more tolerant of the leadership of China and their actions.

The more I got into China news and the more deeply I came to understand the country though, China's methods became less endearing. To me, it seems like the powers that be are more interested in securing their own political hides and the mythical "harmony" than actually treating people like humans or developing the country in a sustainable way.

I'll be interested to see pictures and videos of the events on October 1. But I'm not going to be seduced by the greatness of the day like I maybe would have a year or two ago.