China anecdotally.

As with Duterte last time, let’s do China anecdotally this time. Following a recent and simply riveting dinner conversation at a family friend’s house in Montreal, the subject of travel came up, and here are a few notes from “Jack,” a 35-year-old French-Canadian serial entrepreneur who is just back from four years motorcycling across China where he learned the language in both written and verbal forms :

  • If you want real Chinese culture, go to Taiwan. The Maoists have killed “Chinese” culture almost completely, papering it over with Soviet-style propaganda after murdering anyone with so much as a high school education or aristocratic heritage during the Cultural Revolution. All that’s left in China are the most vulgar and base forms of narcissism.
  • Maoist-Capitalism is morally bankrupt, believing only in profit, cunning, and greed. There’s no social fabric nor narrative to keep personal ambitions in check more thoughtfully.i
  • It’s still possible to see the countryside as it once was, to get out ahead of the bulldozers into rural villages as yet undemolished by the centrally-planned powers that be, but so, so much has already been lost.
  • Beijing has convinced the rural populations that the majority of the population of China is of Han descent and is therefore united, despite obvious physiognomic, dialectical, and architectural evidence to the contrary. The rural populations have been completely stripped of their histories, they don’t even know how old their villages are anymore, just “hundreds of years old”
  • The trade war with America is damaging the centrally planned economy’s ability to unwind its already exacerbated debt and shadow banking problems – the blows are landing.ii
  • Many Chinese, even those within the Party, are dissatisfied with the state of affairs, particularly the corruption, waste, and greed, but they’re each too scared to tell each other, even their spouses, for fear of instant imprisonment. There is therefore a sea of discontent bubbling beneath the surface, ready to invert at a moment’s notice like a thermocline in the summer.
  • The Chinese have nearly perfected industrial espionage, leveraging Western-trained students who navigate their ways into the workplace, steal intellectual property, and systematically funnel it back to Beijing.iii The spies will sometimes even take their knowledge back to China personally and set-up new businesses there that undercut ones in the West by leveraging the massively overfunded state-owned enterprises.iv
  • State-owned enterprises form 70% of the market-based Chinese companies, meaning that approximately 90% of all employees are directly reporting to central command, which obviously creates the same pitfalls of organisation, communication, logistics, forecasting, and everything else in between that plagued Soviet Russia.
  • There is still a huge disconnect between the provinces and Beijing, with the provinces wresting power and autonomy by feeding Beijing bogus economic numbers to satiate the Politburo’s hunger for paper growth.
  • Western firms are leaving China in droves because Chinese wages have gone up and the political climate within China is less certain and more uneasy than ever. Early beneficiaries in Southeast Asia include Vietnam, Thailand, and South Korea.

P.S. Another recent anecdotal perspective comes to us from an older American economist. Feel free to compare and contrast.

___ ___ ___

  1. “Jack” even went as far as to call China an “Evil Empire.” Better than a “blackbox,” I suppose.
  2. Trump definitely knows a bad deal when he sees one, and the deal with China has been rotten for decades. Just like the NATO deal.
  3. “Jack” estimates that the chances of a Chinese-born employee being a spy are as high as one-in-five. Take that for what it’s worth but I have to take that with a grain of salt.
  4. The state-owned enterprises are hugely wasteful and vastly overfunded and so engage in massive infrastructure projects for lack of productive alternatives.

6 thoughts on “China anecdotally.

  1. > If you want real Chinese culture, go to Taiwan. The Maoists have killed “Chinese” culture almost completely…

    What’s ‘real’ or traditionally Chinese about slaving in factories for the profit of foreigners?

    And, which kingdom, and where, went from agrarian shithole to industrial power without thermonuking its “traditional” Bronze Age culture?

    Some people think “20th c. was bloody massacre” but evidently not quite bloody enough, if left these Marie Antoinettes alive to whine. There are apparently 19th c. agrarian throwbacks in Canada who think they are “the real Russians” also.

    > murdering anyone with so much as a high school education or aristocratic heritage during the Cultural Revolution…

    Do you have some picture of what Chinese “education” in the imperial period consisted of? Or of what the “aristocrats” of the last dynasty were like?

    > It’s still possible to see the countryside as it once was…

    What’s so attractive about the old countryside ? The rice paddies where peasants slowly turn into hunchbacks as their feet rot? The regular famine ?

    > Beijing has convinced the rural populations that the majority of the population of China is of Han descent and is therefore united…

    At least the Han actually exist. Unlike e.g. “Americans”.

    > The rural populations have been completely stripped of their histories…

    Somehow unlike the Germans, Irish, Italians, who were stripped of their histories and sold a fiction about being “Americans” ?

    > The trade war with America is damaging the centrally planned economy’s ability to unwind its already exacerbated debt and shadow banking problems…

    Meanwhile in USA, the fishwraps are singing the praises of negative interest rates.

    > Many Chinese, even those within the Party, are dissatisfied with the state of affairs, particularly the corruption, waste, and greed, but they’re each too scared to tell each other, even their spouses, for fear of instant imprisonment.

    Whereas in good ol’ Miamistan, no corruption, no greed, everyone satisfied, and no one is “scared to tell” for fear of instant blacklisting ?

    > The Chinese have nearly perfected industrial espionage, leveraging Western-trained students who navigate their ways into the workplace, steal intellectual property, and systematically funnel it back to Beijing.

    Multi-layered cloth of lulz. What “intellectual property” ? The one designed by Asian temp workers to begin with, paid for with printed money (the only product actually produced in USA) ? The one that is transmitted to Beijing anyway, as USA has ~0 manufacturing capacity?

    “Mathematics is what is taught in American universities by Russian professors to Chinese students”.

    > State-owned enterprises form 70% of the market-based Chinese companies…

    In USA — 100%. (Try and disobey a USG diktat, e.g. refuse a “diversity hire”, and see who actually owns “your” business.)

    > Western firms are leaving China in droves because Chinese wages have gone up and the political climate within China is less certain and more uneasy than ever…

    “Let’s assemble the Chinese components on Chinese tooling in this-here not-yet-as-uppity colony.” Mega-strategy for “certain and easy” ?

    • Pete D. says:

      Somehow unlike the Germans, Irish, Italians, who were stripped of their histories and sold a fiction about being “Americans” ?

      I also find this to be one of the tragedies of the New World. What “Canadians” are we supposed to be like ? This is further entangled with the latest trend of First Nations-based remythologising. Just when we thought we were descendants of pioneering, exploring, intrepid vagabonders, we’re now being reframed in short order as guilty, apologetic thieves who don’t understand how the world works.

      Meanwhile in USA, the fishwraps are singing the praises of negative interest rates.

      That’s why the fishwraps aren’t for reading or taking seriously, they’re for… wrapping fish.

      In USA — 100%. (Try and disobey a USG diktat, e.g. refuse a “diversity hire”, and see who actually owns “your” business.)

      The USA isn’t just Oakland’s “tech” industry, nor is it just the “media” industry in Dumbo. It’s a big empire that I’m gonna say you also need to explore a bit before commenting on so certainly and absolutely. Try the midwest, Texas, and Arizona. On average, and certainly for its size, the US is nowhere near as authoritarian as you might imagine – you give it too much credit – and it’s certainly not on China’s level. The US is still far from perfect, but there’s no perfect! Never has been, never will be. And as I see it, the US’s prospects for the next century seem no worse than those of the EU or China. If/when any/all of the “Big 3″ collapses, the US will very likely be the quickest to dust itself off and pick itself back up.

      “Let’s assemble the Chinese components on Chinese tooling in this-here not-yet-as-uppity colony.” Mega-strategy for “certain and easy” ?

      Components and tooling designed by Westerners, no doubt. But really, it’s not that terrible of a strategy to move factories every few decades.

  2. Mike in Watertown says:

    Dear Stanislav! I presume you have never been to Taiwan, my favorite place in Asia. I don’t know a single Taiwanese who labors in a factory for the profit of foreigners. More than a few, however, do work quite hard overseeing their own factories on the mainland, for their own not insignificant profit.

    Taiwan is certainly a place that has transformed itself from agrarian shithole to industrial power with quite a few of the best elements of its traditional culture not entirely destroyed. In particular the oligarchy is both competent enough and paternalistic enough to have a mostly-functioning industrial policy at the national level and a slug of distributism on the local level to keep the hoi polloi productive and off the dole.

    The fact that America is a shithole in the ways you attest does not prevent China from being a different variety of shithole in the ways Pete D. attests. Like “freedom of speech”, shithole-ness has price variability in different markets. The more salient fact is that neither variety is fully present in Taiwan.

    I freely admit that Taiwan has rot around the edges– the schools have gone pantsuit and I saw some gaymarriage stickers in the Raohe night market last visit. But it is not yet a доходяга and if the US will hurry up with its collapse, Taiwan may yet be able to triangulate a path between Comrade Xi and Comrade Kamala and have a bright future.

    • Pete D. says:

      Mike! Thanks for bringing some much-needed on-the-ground perspective from Taiwan. I’m not sure how you found this little backwater of the web, but I look forward to reading more of your insights soon. And if you have any Taiwanese tourism recommendations, I’m surely not the only one reading who’d love to hear them.

    • I indeed have never been to Taiwan. Did, FWIW, years ago, work with some folks who had come from there. None of these seemed particularly eager to “die for the Motherland” in a hypothetical war against PRC.

      Seems to me that Taiwan was set up specifically to play the role of one of USG’s “unsinkable carriers” — and will be quietly absorbed (or, failing that, bulldozed) ~immediately by PRC as soon as it becomes clear that the Americans will not send cannon fodder to defend its nominal “independence”.

      If the Taiwanese wanted actual independence, they would be making nukes and delivery systems — rather than CPUs for Intel. But AFAIK they aren’t especially interested in any such thing as independence, and so will be eaten up by the local mega-empire when the one they are currently part of finally expires.

  3. @Pete D.:

    I have seen “Components and tooling designed by Westerners”. All with date stamps in 1980s or prior, there’s approximately no such thing today.

    Current-day “Western components and tooling” are designed by coolie labour (and often outright subcontracted overseas), “managed” by native bluebloods; and the resulting widgets in fact are functional in directly-inverse proportion to how active were said “management”.

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