Posts Tagged ‘China’

political crisis in the USA and in China

Tuesday, December 13th, 2016

I have long thought that governance in the USA is converging with that of China (and other countries of the so-called third world). The convergence is to a style known as ‘crony capitalism’, which has well-known defects. Two op-ed columns in today’s Financial Times, one by Edward Luce and another by Martin Wolf, remind me how governance in the two countries are coming to resemble each other, even though one country is evolving from a democratic system and the other from a Communist system. There is danger of turmoil in each country. (more…)

China’s “debt funding bubble”

Sunday, December 4th, 2016

Here is an interesting column from a seasoned FT researcher.

When Marco Polo went to China [in the 13th century] he discovered something better than alchemy. Rather than turning base metals into gold, he marvelled that the Chinese were creating money out of paper. ….

the future of Sino-American relations

Saturday, December 3rd, 2016

Australian politician Kevin Rudd (born 1957), in a Financial Times op-ed, describes three analyses that he thinks might shape China’s response to Donald Trump: the “instability” school, the optimistic school and the pessimist school. (more…)

global warming viewed from China and the United States

Wednesday, November 30th, 2016

US president-elect Donald Trump has transformed China into a world leader in the struggle against global warming. FT columnist Jamil Anderlini explains.

In mid-2012, Donald Trump fired off this tweet: “The concept of global warming was created by and for the Chinese in order to make US manufacturing non-competitive.”

Apart from its sheer absurdity, one of the most striking things about Mr Trump’s assertion is how similar it sounds to the paranoid ravings of Chinese nationalists, who blame almost everything on the CIA and evil, imperialist America. ….

Thanks to the election of Mr Trump, who remains unconvinced by the overwhelming scientific evidence of anthropogenic climate change, China is now poised to become the world’s leader in tackling global warming and the environment. Nobody is as surprised by this new responsibility as China itself. Less than a decade ago, the Chinese government still refused to admit that the acrid clouds of choking smog hanging over most of the country had anything to do with industrial development.

Jamil Anderlini, “China’s leaders emerge from the fog of pollution denial“, Financial Times, 30 November 2016 (metered paywall).

liberal policies and economic growth

Friday, July 29th, 2016

For your enjoyment, here are more excerpts from Bourgeois Dignity.

Dignity and liberty still work. …. Shenzhen in mainland China, a suburb of Hong Kong, went from being a small fishing village to an eight-million-soul metropolis in two decades. it didn’t happen without some nasty rent-seeking by party officials and their friends, true. But out of such creative destruction are average incomes raised, to the benefit eventually of the poorest. Such a shift required a shift in rhetoric: stop jailing millionaires and start admiring them; stop overregulating markets and start letting people make deals, corrupt or not.

…. You can still hear people … [declare] confidently that the market of course needs to be closely regulated, or that trade needs to be fair, or that immigration must be restricted, or that jobs are to be created by governmental programs, or that businesspeople routinely cheat, or that markets are chaotic, or that the more complex an economy is, the more it needs government regulation, or that banking or financial speculation is robbery, or that governmental bureaucracies are always fair and efficient.  …. Such antibourgeois people … do not believe the bourgeois axiom that a deal between two free adults has a strong presumption in its favor ….

This seems to be extremely libertarian, but five pages later, McCloskey explains that she is very much a classical liberal (a follower of Adam Smith, John Stuart Mill and others):

Liberty, I say again for the enlightenment of my libertarian colleagues, does not by itself suffice. The political scientist James Otteson asserts … “Those countries that respect private property and efficiently administer justice prosper, and those that do not do not. It is as simple as that.” Not quite, I would argue …. Prudence is not enough. We need to assent to bourgeois virtues.

Two chapters later McCloskey affirms this even more clearly:

[We should not celebrate] “greed is good,” which I argued at length in [my book] The Bourgeois Virtues is a childish and unethical rhetoric, however popular it has been on Wall Street and in the Department of Economics.

Deirdre N. McCloskey, Bourgeois Dignity: Why Economics Can’t Explain the Modern World (University of Chicago Press, 2010), pp. 397, 402, 446.

the psychology of financial markets

Wednesday, July 27th, 2016

Financial markets are like small children. They find it hard to focus on more than two things at once.” That is the conclusion drawn by one of my colleagues after a lifetime of professional investing.

Whether small children can focus on anything at all is a matter for debate. Chocolate, perhaps. But he has a point when it comes to global markets. Investors have been so focused on the Brexit vote and its aftermath that they have missed the big picture, which is that the global economy is still worryingly dependent on US growth and the extreme efforts of central banks. ….

Big picture: China might be more stable but is no closer to resolving its structural and financial imbalances than it was a year ago, and it is still exporting disinflation to the rest of the world via a weaker exchange rate. US import prices from China fell by 3 per cent in June, the largest monthly drop since 2013.

Stephanie Flanders, “The world leans ever more on America“, Financial Times, 27 July 2016 (metered paywall).

map of the day

Monday, July 18th, 2016

South China Sea claims

South China Sea territorial control map

Source: Lucy Hornby, “Beijing censors South China Sea protest“, Financial Times, 18 July 2016.

South China Sea troubles

Saturday, July 16th, 2016

The Permanent Court of Arbitration, an international tribunal in The Hague, has decided in favour of the Philippines against China’s claim to control most of the South China Sea. Any attempt to enforce this ruling could lead to tension between the United States and China.

Washington sees the ruling … as a victory for what some US officials describe as a 21st century rules-based order over China’s 19th-century plans for its own sphere of influence. By rejecting so many of the assumptions that underpinned Beijing’s claims in the South China Sea, the tribunal has put it on the spot. ….

[T]he awkward irony [however, is] that the US Senate has yet to ratify the UN Law of the Sea Treaty, the basis for The Hague ruling. When it was debated two years ago, some Republican senators warned it could be used to overrule American sovereignty claims — precisely the complaint China is making. As a result, Beijing is refusing to accept the ruling based on an agreement it has fully signed up to, while the US is calling for the enforcement of a treaty it has declined to back. [Emphasis added.]

Geoff Dyer and Tom Mitchell, “South China Sea: Building up trouble“, Financial Times, The Big Read, 16 July 2016 (metered paywall).

universal pensions in Hong Kong: the struggle continues

Tuesday, June 21st, 2016

The HK government’s six month “public consultation” is coming to an end. The universal pension scheme recommended in the report commissioned by the government is not likely to be adopted, despite widespread public support for the proposal, much of which could be funded by diverting mandatory retirement savings to the government coffers.

Here are excerpts from three recent articles published in a leading Hong Kong newspaper. Click on the links to read the full columns. (They are not gated; access is free.)

Organizers claimed about 5,000 people marched to the Chief Executive’s Office yesterday to demand universal retirement protection while slamming a public consultation exercise as fake because administration officials have made it clear they want a proposal with a means test. ….

Alliance for Universal Pension spokesman Nicholas Chan Hok- fung pointed out that 300 younger people had volunteered to push the wheelchairs, indicating a willingness to take on responsibilities for looking after seniors.

On that, volunteer Wong, 27, did not agree with the official line being disseminated about a universal pension becoming too much of a load for workers. “With a universal pension scheme it will actually reduce our burden as our parents will be receiving a monthly allowance,” he said. ….

The crowd dispersed after putting stickers outside the Chief Executive’s Office that read “Leung Chun-ying must keep his promise” and “Support the Universal Pension 2064 Scheme.”

The 2064 refers to a scheme drafted by 180 scholars who reject the official claim that a universal pension will not be sustainable.

Carain Yeung, “Pension protesters press their demand for universal formula“, The Standard (Hong Kong), 20 June 2016.

Most representatives from 80 groups who spoke at the last Legislative Council public hearing on retirement protection yesterday said they wanted a universal pension.

The four-hour hearing came on the eve of the deadline for the government’s six-month public consultation. ….

Alliance for Universal Pensions members again slammed the government for its “fake consultation” and said its own consultation conducted from January to May – with 11 public forums held – found that most supported a universal pension scheme.

Carain Yeung, “Legco last words on pensions“, The Standard (Hong Kong), 21 June 2016.

A member of the Commission on Poverty, Law Chi-kwong, says public views on a universal pension are still divided after six months of public consultations.

The exercise ends today and findings will be forwarded to an independent consultancy for analysis. ….

The government had said the universal pension proposal was unsustainable.

The head of the commission, Chief Secretary Carrie Lam, said last week that she hoped the government can finalise a retirement protection policy before its term ends in June next year.

RTHK, “Poverty official questions pension proposals viability“, The Standard (Hong Kong), 21 June 2016.

universal pensions and Hong Kong values

Wednesday, May 25th, 2016

Some Hong Kong businessmen are very mean-spirited. Moreover, they fail to understand that means-tested benefits are ‘welfare’, whereas universal benefits are not. Examples of universal benefits in Hong Kong are basic schooling and health care. Both are provided freely to all legal residents regardless of income or wealth.

Prominent members of the Hong Kong business sector have decried universal welfare as going against Hong Kong values during a forum on retirement protection held by the Chamber of Commerce yesterday.

Addressing fellow attendees, including Chief Secretary Carrie Lam, chairman of the Chamber Stephen Ng said, “Welfare which everyone can get is not the Hong Kong spirit.”

SCMP [South China Morning Post] reports that many present at the forum “lamented” that government policies (like minimum wage) had “created hardship” f