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January 11, 2006
Dissecting the Chinese miracle
From Peter Zeihan and the good folks at StratFor, by :
The "Chinese miracle" has been a leading economic story for several years now. The headlines are familiar: "China's GDP Growth Fastest in Asia." "China Overtakes United Kingdom as Fourth-Largest Economy." "China Becomes World's Second-Largest Energy Consumer." "China Revises GDP Growth Rates Upward -- Again." Everywhere, one can find news articles about China, rising like a phoenix from the economic debris of its Maoist system to change and challenge the world in every way imaginable.Continues below the jump.
Moreover, Western markets have been at least subconsciously aware of this for a decade. More than half of the $1.1 trillion in foreign direct investment that has flowed into China since 1995 has not been foreign at all, but money recirculated through tax havens by various local businessmen and governing officials looking to avoid taxation. Of the remainder, Western investment into China has remained startlingly constant at about $7 billion annually. Only Asian investors whose systems are often plagued (like Japan's) by similar problems of profitability or (like Indonesia's) outright collapse have been increasing their exposure in China.posted by Simon on 01.11.06 at 11:14 AM in the China category.
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A bit doomsday, I think, but nevertheless a fascinating contrarian perspective to the 'juggernaut' theory of China's economy.posted by: HK Dave on 01.11.06 at 03:41 PM [permalink]
I'm afraid what the writer says about what is going to happen in China has nothing to do with reality so far though what he says based on some facts. It is because the writer knows little about the Chinese culture, its unique ways of dealing with things. I am Chinese and I have been living in the coastal area, Zhejiang Province, which the author mentioned as is somehow trying to seek independence de facto. As far as I know, no one here is thinking this way. If one of you try to predict with a bit of an accuracy, try first to imitate the way most of the Chinese wpuld think and act. Here we don't think in your way.posted by: Jesse Wang on 01.11.06 at 09:36 PM [permalink]
Not related to the China at all but more about Stratfor. I've seen lots of people quoting (well not lots, but several now) and I don't understand why people seem to regard it so highly. It is an "intelligence" agency but all of it's conclusions are drawn from open-source information. It doesn't have access to sensitive or government information. One can do the same with a little intuition, google, and lexis-nexis. Certainly they are "insightful" at least compared to mainstream journalism but they are hardly authoritative.posted by: Jing on 01.12.06 at 05:52 AM [permalink]
I actually just bothered to read the article and I'm left poleaxed. The first part was about the economic imbalances within the Chinese economy, common stuff that one can read anywhere. However, the last two paragraphs really left me stunned as to whether or not Mr. Zeihan had the vaguest clue about Chinese history. His is a classic example of taking a paradigm, and running with it to the end even if it meant going over a cliff. "Coastal Lords"? Pffft.
The august days of Qing China is a fairly broad topic that could take entire book to discuss but his comparison between then and the present is completly off base. His assertion that economic pressure on coastal provinces led to political decentralization is a novel theory, and by novel I mean batshit wrong. The underlying cause of Qing fragmentation was rooted in the military system of the Qing dynasty, i.e. the banner garrisons which led to the formation of localized political power that became more entrenched over time. The Wuhan uprising that ushered in the Republican (and Warlord) era wasn't begun by "coastal lords" but rather the Qing dynasty's own New Army in China's INTERIOR.posted by: Jing on 01.12.06 at 06:30 AM [permalink]