Print
E-mail
What Does Crisis Mean For China?
By Sam Oglesby, For The Bulletin
The world economic crisis manifests itself in eery ways. In China’s capital, Beijing, the early spring air is cleaner than it has been in years and at the city’s many bus terminals, daily departures to the provinces have risen sharply. With exports in steep decline — down 17 percent in January — Chinese factories are cutting back production with resulting large-scale lay-offs of workers who are returning to their villages in the hinterland. With fewer factories running at full capacity, heavy- industrial districts near Beijing are polluting less, hence bluer skies.
The economic choices and possible consequences confronting China and the rest of the world in face of the current global crisis are laid out in stark terms in Postcards from Tomorrow’s Square – Reports from China by James Fallows (Vintage Books, 262 pages, $14.95), an immensely readable book that, at some points, builds up excitement and suspense worthy of a thriller. How can economics, such a mundane and often little-understood subject, manage to be so suspense-filled? Reading about Mao’s disastrous Great Leap Forward and the 100 million lives estimated to have been lost in the Great Famine following his mad experiment, we realize that while man cannot live by bread alone, we are essentially economic animals who require livelihoods and enough to fill our stomachs to survive, let alone prosper and fulfill our human destiny.
Mr. Fallows’ portrait of China provides many fascinating vignettes of a country whose image in the West has too often been reduced and simplified to a series of tiresome, demeaning and often misleading stereotypes. In many ways, what the U.S. has done well, China can do even better. Take for example reality TV games shows. “Win in China” puts “The Apprentice” to shame with its cut-throat “player kill” tactics, but then improves on the simplistic single job idea of the American show to create a sophisticated business-development concept where the winning team is provided seed money to start its own business.
Then there is China’s Wild West — Gansu, Xinjiang, Sichuan and Shaanxi — the ancient Silk Road land of dramatic topography and austere desert beauty where 2,000-year-old irrigation systems are still in use, cheek by jowl with state-of-the art conference centers and villages wired to the Internet world to compete with the challenges of the 21st century.
Foolish and ruthless. These two words describe, respectively, characteristics governing the present-day political-economic foundations of the United States and China and the resulting conflict that could well arise between these two giants. With a savings rate that has recently been below zero, America, on the one hand, foolishly consumes , via exports, more than it produces. On the other hand, China’s savings rate is a whopping 50 percent. America’s ability to enjoy a standard of living higher than it can actually afford is sustained by borrowing from the rest of the world. Foremost among America’s creditors is China. With the U.S. struggling under a severe financial crisis, when will China decide to pull the plug and cash in the Treasury Bills and other American debt paper it holds, thereby throwing the U.S. into a further financial downward spiral that will, in turn, limit America’s ability to buy Chinese products that keep Chinese factories humming and its hundreds of millions of workers employed?
China’s overly prudent savings policy is part of a complicated sociopolitical-economic equation that has worked well for the peoples’ republic during the past three decades of heady economic growth, where an annual 10 percent increase in gross national product is the expected model. While laudable from a conservative banker’s standpoint, this high savings rate is ruthless in that it has deprived the Chinese people of basic infrastructure services in health, education, transportation and the environment that are taken for granted in the United States and other developed countries. So far, content with meager benefits the communist government has allowed it to glean from a generation’s phenomenal growth, when will the Chinese people wake up and demand more, thereby upsetting the prevailing delicate balance that has provided cheap, compliant labor for the PRC’s factories?
The heretofore successful Chinese formula of hard work, high savings and political stability could be upset by any number of factors — a weakened United States that succumbs to domestic political pressure resulting in trade retaliation and weakened demand for Chinese products; a restive Chinese population whose modest but rising living standards and increased access to what is happening in the outside world via the Internet has made them thirsty for a quality of life they may come to feel the communist government is withholding from them; increased world attention to China’s human rights abuses in areas such as Tibet causing the Chinese government to lash out at domestic and foreign critics with foreboding implications for diplomatic and military confrontation; and the likelihood of restive movements in Muslim areas of China leading to eventual fragmentation or breakup similar to the demise of the Soviet Union.
Postcards from Tomorrow’s Square poses important — indeed, chilling — questions the answers to which may well determine how the rest of this century plays out. From an American policy standpoint, Mr. Fallows pleads for an openness and flexibility on the part of the United States and a recognition of a situation that he thinks is beneficial for both countries. One thing is for sure: The United States needs to return to a policy of frugality, an old-fashioned habit we seem to have lost as good living caused us to throw caution to the winds. The Chinese are far from perfect, but with their thrift and hard work, they now embody the values that were once termed Yankee.
Sam Oglesby is a New York-based writer who specializes in Asia and foreign affairs. His email is ogl39@aol.com.
The economic choices and possible consequences confronting China and the rest of the world in face of the current global crisis are laid out in stark terms in Postcards from Tomorrow’s Square – Reports from China by James Fallows (Vintage Books, 262 pages, $14.95), an immensely readable book that, at some points, builds up excitement and suspense worthy of a thriller. How can economics, such a mundane and often little-understood subject, manage to be so suspense-filled? Reading about Mao’s disastrous Great Leap Forward and the 100 million lives estimated to have been lost in the Great Famine following his mad experiment, we realize that while man cannot live by bread alone, we are essentially economic animals who require livelihoods and enough to fill our stomachs to survive, let alone prosper and fulfill our human destiny.
Mr. Fallows’ portrait of China provides many fascinating vignettes of a country whose image in the West has too often been reduced and simplified to a series of tiresome, demeaning and often misleading stereotypes. In many ways, what the U.S. has done well, China can do even better. Take for example reality TV games shows. “Win in China” puts “The Apprentice” to shame with its cut-throat “player kill” tactics, but then improves on the simplistic single job idea of the American show to create a sophisticated business-development concept where the winning team is provided seed money to start its own business.
Then there is China’s Wild West — Gansu, Xinjiang, Sichuan and Shaanxi — the ancient Silk Road land of dramatic topography and austere desert beauty where 2,000-year-old irrigation systems are still in use, cheek by jowl with state-of-the art conference centers and villages wired to the Internet world to compete with the challenges of the 21st century.
Foolish and ruthless. These two words describe, respectively, characteristics governing the present-day political-economic foundations of the United States and China and the resulting conflict that could well arise between these two giants. With a savings rate that has recently been below zero, America, on the one hand, foolishly consumes , via exports, more than it produces. On the other hand, China’s savings rate is a whopping 50 percent. America’s ability to enjoy a standard of living higher than it can actually afford is sustained by borrowing from the rest of the world. Foremost among America’s creditors is China. With the U.S. struggling under a severe financial crisis, when will China decide to pull the plug and cash in the Treasury Bills and other American debt paper it holds, thereby throwing the U.S. into a further financial downward spiral that will, in turn, limit America’s ability to buy Chinese products that keep Chinese factories humming and its hundreds of millions of workers employed?
China’s overly prudent savings policy is part of a complicated sociopolitical-economic equation that has worked well for the peoples’ republic during the past three decades of heady economic growth, where an annual 10 percent increase in gross national product is the expected model. While laudable from a conservative banker’s standpoint, this high savings rate is ruthless in that it has deprived the Chinese people of basic infrastructure services in health, education, transportation and the environment that are taken for granted in the United States and other developed countries. So far, content with meager benefits the communist government has allowed it to glean from a generation’s phenomenal growth, when will the Chinese people wake up and demand more, thereby upsetting the prevailing delicate balance that has provided cheap, compliant labor for the PRC’s factories?
The heretofore successful Chinese formula of hard work, high savings and political stability could be upset by any number of factors — a weakened United States that succumbs to domestic political pressure resulting in trade retaliation and weakened demand for Chinese products; a restive Chinese population whose modest but rising living standards and increased access to what is happening in the outside world via the Internet has made them thirsty for a quality of life they may come to feel the communist government is withholding from them; increased world attention to China’s human rights abuses in areas such as Tibet causing the Chinese government to lash out at domestic and foreign critics with foreboding implications for diplomatic and military confrontation; and the likelihood of restive movements in Muslim areas of China leading to eventual fragmentation or breakup similar to the demise of the Soviet Union.
Postcards from Tomorrow’s Square poses important — indeed, chilling — questions the answers to which may well determine how the rest of this century plays out. From an American policy standpoint, Mr. Fallows pleads for an openness and flexibility on the part of the United States and a recognition of a situation that he thinks is beneficial for both countries. One thing is for sure: The United States needs to return to a policy of frugality, an old-fashioned habit we seem to have lost as good living caused us to throw caution to the winds. The Chinese are far from perfect, but with their thrift and hard work, they now embody the values that were once termed Yankee.
Sam Oglesby is a New York-based writer who specializes in Asia and foreign affairs. His email is ogl39@aol.com.
 |
 |
|
| Keeping It Private, Except From Mom | General Motors: An Identity Crisis |
Reader Comments
The following are comments from the readers. In no way do they represent the view of thebulletin.us.
You must register with a valid email to post comments. Only your Member ID will be posted with the comments.
Registered users sign in here: |
Become a Registered User |
