Tuesday, November 24, 2009

China Alone?

By GORDON C. CHANG (Reviewing "When China Rules the World: The End of the Western World and the Birth of a New Global Order", by Martin Jacques)

This book says we can expect, in the near future, the loss of American preeminence, the fall of the West, and the global dominance of a Chinese civilization-state. China will not just take its place at the top of the international order, it will fundamentally change it. “We stand on the eve of a different kind of world,” author Martin Jacques asserts.

And what is the motor of this epochal change? Rapid economic growth that will continue for decades. Following cousins and neighbors, hundreds of millions of Chinese peasants will leave farms, migrate to cities, and become prosperous. This inexorable process could see the industrious Chinese develop the world’s largest economy, probably by 2027 (Goldman Sachs’s latest prediction). And the recent global downturn, now barely a year old, will hasten the erosion of America’s strength and accelerate China’s rise.

Has Jacques correctly interpreted the broad sweep of events? No. He is an extrapolationist; and, unfortunately for him, he is assuming the indefinite continuation of trends just when history is making a sharp turn. As a consequence, almost every important prediction in this long book is wrong. We are, as Jacques writes, standing on the eve of a world that will be different, but it is not the one he foresees.

China, the author forgets, prospered during an extraordinarily benign time, the post–Cold War period of seemingly never–ending globalization and economic expansion. But that era is over. This year, according to the normally sunny World Bank, the global economy will shrink for the first time since World War II, and global trade will decline more than it has in any of the last 80 years. Economies are delinking from one another and, in all probability, will continue to do so for some time.

That’s extraordinarily bad news for China, which has an economic model particularly ill-suited to current conditions. The country’s economy — now and for the foreseeable future — is dependent on exports, but sales to customers abroad are falling precipitously in this dismal environment. As we saw in the Great Depression, it was the export powerhouses that had the hardest time adjusting to deteriorating economic conditions and, consequently, suffered the most. That is proving to be the case now as well. Jacques notes China’s dependence on exports but then shows that he does not comprehend its significance.

Therefore, it is no surprise that he does not understand the barriers to the restructuring of the Chinese economy. He says the economy will remain competitive “for many years” because “the condition on which it rests, the huge migration of rural labor into the cities, is destined to continue for several decades.” China’s problem, however, is not keeping manufacturing costs low, which is what Jacques is getting at by focusing on the continual enlargement of the labor force. The problem is that foreign customers are no longer buying Chinese goods in the quantities they did in the past. As a result of quickly declining global demand, the pattern of China’s migration is reversing for the first time in the history of the People’s Republic. Tens of millions of Chinese migrants who used to work in the country’s coastal factories have returned to the countryside in the past year. Many, if not most, of them remain out of work today.

Jacques, to his credit, acknowledges the existence of unemployment and other factors, but he then makes the same mistake almost every other China analyst does: He assumes that Beijing will succeed in stimulating domestic consumption to take up the slack. In fact, owing to Beijing’s recent policies, consumption’s role in the economy has slid from an average of about 60 percent throughout the People’s Republic era to around 30 percent today — no country has a lower rate — and almost all of the government’s measures to jump-start the economy dampen consumption.

Furthermore, Jacques fails to see that Beijing, because of the demands of China’s political system, is renationalizing the Chinese economy and closing the door to foreign investment. Chinese leaders are reversing policies responsible for the growth of the past three decades. The implications of these trends are profound, and Jacques should have examined them. It is simply not good enough to note concerns, dismiss them, and devote just seven pages of text — out of 435 — to the sustainability of the country’s economic growth, the assumption on which his entire book rests.

This shortcoming is a symptom of a larger problem with the book: It minimizes the flaws inherent in Beijing’s one-party state. China’s economy has progressed about as far as it can within the country’s political system, and the Communist party is limiting the further development of Chinese society. For instance, Jacques writes about the rise of China’s universities but never mentions the severe — and worsening — ideological constraints that have held them back. Similarly, he discusses China’s cultural power but never mentions the party’s strict censorship of movies, books, blogs, and every other form of expression, including karaoke songs.

And then there is demography. At the heart of Jacques’s argument is that Beijing’s geopolitical dominance will be overwhelming because it governs a state with far more people than the other nations that have sat atop the international system. “China, as the world’s leading country, will enjoy a demographic weight that is qualitatively different from that of any previous hegemonic power in the modern era,” he writes. Yet Jacques fails to look at demographic trends. Beijing’s one-child policy has caused some of the most abnormal gender patterns on the planet and will result in a rapidly shrinking population in about two decades. Sometime around 2030, China’s archrival, India, will take over the No. 1 ranking in population.

Fertility rates are never set in stone, but Chinese ones cannot rise much as long as the Communist party is around. Why? Although virtually every demographer, Chinese and foreign, will tell you the one-child policy is misguided, the party cannot repeal it because to do so would eliminate a crucial element of control over the population, especially in restive rural areas. Moreover, Beijing’s leaders, during a time of skyrocketing unemployment, will not dismantle an enormous bureaucracy that reaches into virtually every hamlet in the country. And why does this matter? Because China will get old before it gets rich. No one has figured out how Beijing will care for a rapidly aging population with a quickly shrinking workforce.

Jacques underestimates the dislocations that Communist rule has caused and overestimates the ability of the country’s political leaders to remedy them. Worse, he completely misses the significance of striking changes in Chinese society during the three decades of the so-called reform era, which began when Deng Xiaoping grabbed power at the end of 1978.

The reforms Jacques credits to the Communist party were, in fact, started by common folk who circumvented its strict rules. Deng, now credited with beginning the process of transformation, began his tenure as China’s paramount leader by adhering to orthodox Communist economics. Peasants and entrepreneurs, however, sparked growth by doing things their own way in defiance of central-government prohibitions on private activity. Deng, in short, succeeded because the Chinese people disobeyed his rules. His genius, if we can call it that, was to have the good sense not to obstruct them when he finally learned what they were doing.

Yet Deng’s successors have not been so wise. Today, there’s unimaginable social change at unheard-of speed thanks in large part to economic growth and social engineering, yet at the same time China’s rulers are standing in the way of meaningful political change. They have become more repressive just as the Chinese people are demanding political liberalization. Read When China Rules the World, and you will see none of this crucial history.

And you will see almost nothing about how the forces of modernization almost always overwhelm intransigent political institutions, whether we examine 18th-century France or 20th-century Taiwan. Jacques’s failure to examine this issue is a major problem. If asked, he would probably answer that China is unique and that the Chinese people stand behind their leaders because they believe in the unity of the country.

He portrays the Chinese people as supporting Beijing’s brand of authoritarianism. But while they may be nationalistic, they are also defiant. Given the turbulence in Chinese society — there are perhaps as many as 90,000 major protests a year — we have to wonder what a radical change in form of government would mean for China’s place in the world. Many fondly hope that transformation in Chinese society will be gradual and peaceful; if it is, China will have a chance of eventually dominating the international system as Jacques predicts. Yet the scenario of evolutionary adaptation, which he argues is the most probable, appears inconsistent with the last 2,000 years of Chinese history — and unlikely in the current hardline system. It is much more probable that the clashes between the Chinese people and their government — the demonstrations appear to have been larger, more frequent, and more violent in recent years — will eventually result in a complete failure of the one-party state.

Perhaps China can avoid revolutionary turmoil, but Jacques does not say much on this topic beyond declaring that “the rule of the Communist party is no longer in doubt.” He never explains how a country that has trouble governing itself at this moment — and that has a history of radical change — will soon be able to dominate the rest of the world.



Eternal Gratitude

Carolyn Blashek was in shock, like many of us, on 9/11. She was searching to find something that would assuage her concerns. Her decision was to enlist in the Army. The Army recruiter took one look at this then-46-year-old, 5’ 5”, and 115 lb. woman, and suggested she find another way to channel her energies. That recruiter definitely saved Islamic terrorists from a severe thrashing.

Looking for something to fulfill her commitment to help, she volunteered at the military lounge at Los Angeles Airport. Ms. Blashek had a unique experience with a particular soldier on leave, one who really had no family at all. It became clear what the soldiers in war zones really needed – which then became her mission – was to help our best men and women believe that someone here in the homeland actually cared.

Starting in her home, Carolyn created something different – and special. Her objective was to send each soldier an individually addressed box that included not only helpful items, but also a handwritten note. This is not an easy task to accomplish. She has to get the names and the locations of our soldiers which is something the military does not hand out willy-nilly. The decision to release this information is left to the commanders in the field or on the ships. You see, these packages are meant for the men and women in harm’s way -- those that most need to know that we sincerely care – and deeply appreciate what they are doing for us.

From the days in 2003 and 2004 when you would visit Carolyn’s house and be greeted by a wall of boxes, the operation has really changed. Operation Gratitude has taken over the Army National Guard Armory in Van Nuys, California. I stopped by recently and what I saw there made me particularly proud to be American.

At first glance, it looks like Santa’s workshop three days before Christmas. You are stunned by the mass of people hard at work on an assembly line. Almost 1,000 volunteers (no one at Operation Gratitude gets paid) are busy working away on this season’s goal of sending 70,000 boxes to our brave souls in Iraq and Afghanistan. Who would have thought this could happen in California, the heart of blue-state America?

While looking at the line, I asked Carolyn: “Who organized this? You have many talents, but an operation of this scale clearly required someone with real skills in mass production.” She led me to one of their 70 supervisors, Charlie Othold, who holds the title of Director of Operations. Charlie is your definition of grizzled, old guy. He did 20 years in the Air Force and then another 20 at Lockheed as a logistics engineer. He detailed to me how they are set up to package 1,200 boxes an hour.

Since 2004, Charlie has worked essentially a full-time job for Operation Gratitude. He spends at least 30 hours per week at the Armory because there is such a tremendous amount of work required to get the donated products -- lip balm, sunscreen, CDs, hats, t-shirts, flash drives and myriad other items -- into the boxes, along with a personalized letter from a child or adult from across America. Charlie served in Viet Nam. When I asked him what it would have meant to him to receive one of these boxes, I had to stop and compose myself as I was overwhelmed by the moment. Charlie told me what he thought the difference would be from the generous yet impersonal bag from the USO. I noticed a tear in the eye of this tough guy and I knew what it would really have meant.

Not all of the volunteers are military veterans. I spoke with Gregg Contreras, a self-employed security contractor, who has a second job working as a supervisor at Operation Gratitude. He came on board in 2005. We discussed “the corner,” which is where the personalized label goes on the box, and the moment that the whole process becomes real because it now has a soldier for which it is designated. From there volunteers then complete hand-addressed customs forms as required for each box to reach its destination. Contreras, who never served in the military, now has found his calling. He gets up every day personally committed to do what he does for Operation Gratitude. Yes, he says, he has to do it.

The Armory has become a magical place. Volunteers have taken a thought, a concept and made it happen. Because there is no staff and no meetings and no bureaucracy, they succeed on their mission. They are just ordinary citizens doing an exemplary job for people who do something extraordinary for this country and for the free people of the world every day. It is an unbelievable convergence of people doing good for people who are doing greatness. You walk out of the armory wondering who is benefiting more – the volunteers or the soldiers - and the answer is both.

As we enter this week of unique American experience of giving of thanks for all we have and for all of those who came before us to make this the wonderful country it is, remember Operation Gratitude. Despite the incredibly generous donations of products, they still need $11 to cover the cost of mailing each of those 70,000 soldiers receiving boxes this holiday season (the packages can only go by USPS). Remember that whatever you are suffering is nothing compared to what they are enduring for us. So please go to www.opgratitude.com and help make sure that America’s finest people know we are thinking of them daily and that we appreciate what they are doing for free people everywhere.




Army allows media at Palin event at Fort Bragg: "The U.S. Army said Friday it would open Sarah Palin’s appearance on Fort Bragg to media, a reversal from earlier in the week when the military wanted the event closed out of fears it would prompt political grandstanding against President Barack Obama. The attempt to ban media at the event scheduled for Monday was met with protests from The Associated Press and The Fayetteville Observer. The military then proposed limited media coverage, but lifted that plan Friday.”

Sarah Palin dines with Rev. Billy Graham in NC: "Sarah Palin arrived for Sunday dinner with the Rev. Billy Graham a day before a planned stop on her book tour in eastern North Carolina. The former Alaska governor and 2008 Republican vice presidential nominee flew into Asheville and then went to Billy Graham's mountaintop home in Montreat for dinner, said Jeremy Blume, a spokesman for Graham's son, Franklin. Franklin Graham invited Palin. The elder Graham has never met Palin, who is scheduled to stop at Fort Bragg on Monday to promote her memoir, "Going Rogue: An American Life." Franklin Graham got to know Palin early this year in Alaska. She accompanied him as Samaritan's Purse, a Boone-based international relief agency he heads, delivered 44,000 pounds of groceries to Alaskan families who had been hit by a harsh winter in villages along the frozen Yukon River. Samaritan's Purse has an office in Alaska, and Franklin Graham owns a cabin in the state. Graham also leads the Charlotte-based Billy Graham Evangelistic Association, which his father founded decades ago."

Three Mile Island radiation not significant: "The U.S. Nuclear Regulatory Commission said the small amount of radiation detected at the Three Mile Island nuclear power plant is not significant. Specialist John White told ABC News that there was no indication that radiation at the plant exceeded or even approached regulatory limits. The commission sent investigators to the central Pennsylvania plant after a small amount of radiation was detected.”

Report: UK documents detail Iraq war chaos: "Leaked British government documents call into question ex-Prime Minister Tony Blair’s public statements on the buildup to the Iraq war and show plans for the U.S.-led 2003 invasion were being made more than a year earlier, a newspaper reported Sunday. Britain’s Sunday Telegraph published details of private statements made by senior British military figures claiming plans were in place months before the March 2003 invasion, but were so badly drafted they left troops poorly equipped and ill-prepared for the conflict.”

Five cities that will rise in the New Economy: "In Houston, the Texas Medical Center is expanding so quickly that it will soon become the seventh largest downtown in the US. By itself. … In Seattle, the erector-set cranes along the waterfront and big forklifts at the airport are loading exports into containers with the constancy of a piston: plywood to Beijing, halibut and crab to Tokyo, Granny Smith apples to Moscow. … In Fort Collins, Colo., town fathers are aggressively transforming the heart of the city into a zone that generates as much electricity as it consumes. … As the United States emerges from the worst recession in 80 years, a new economy is taking root that will help create the next tier of powerhouse cities in America.”

Obamanomics 101: "During the Depression, President Roosevelt demonized business and the wealthy (’economic royalists’) and raised their taxes. When they declined to invest and stir economic growth, he accused them of staging a ‘capital strike.’ The Obama equivalent, if it comes to that, would be a ‘hiring strike.’ We haven’t gotten there yet. But Obama has made clear in his 10-month presidency that he has minimal respect for business or the profit motive. Ambitious, talented young people should work for nonprofits. Last summer, he criticized doctors who gouged by insisting on expensive tonsillectomies to cure simple sore throats. They reflected a ‘business mentality,’ he said. And what the president doesn’t understand — or, to be more charitable, refuses to acknowledge — about free markets, the economy, and competition could fill a book, or at least an Obama speech.”

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The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)


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