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China's Financial Debt: Everything You Know Is Wrong
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Pretty much everything our media tells us about China is wrong–or at least one-sided–including its tales of a China ‘debt problem’.

The Chinese are, in all times and places, debt-averse and China’s government which, unlike ours, must take long-term responsibility for the economy, is no different. Mao set the example and grew GDP by 6.2 percent annually for twenty-five years without incurring a penny of debt, a feat probably unmatched in history. His successors have been less debt-averse but their more holistically-designed economy–all strategic resources, from finance to land, are owned in common–allows China to incur ninety percent of her debt when she borrows money from herself, without intermediaries, to create productive, publicly-owned assets. The Chinese treasury may thus decide when and how to deal with non-performing loans without fear of contagion or disruption. Wealthy Australia, by contrast, borrows billions abroad for military hardware which it records as assets, though they consume twenty percent of their cost each year in maintenance and produce no revenue. Autre pays, autre atouts.

China’s debt can’t be viewed through a Western lens because Communists designed her economic model in the 1970s to serve a purpose entirely different from ours (which was never designed and has no agreed-upon purpose) so China won’t experience a Western-style financial crisis because she doesn’t have a Western-style economy. Bloomberg, in a rare lucid moment, admits as much:

“While certain industries and enterprises have a lot of debt, Chinese companies’ average leverage isn’t high, according to a recent International Monetary Fund working paper. Since 2006, listed companies that aren’t state-owned have reduced median liabilities to 55 percent of common equity. At state-owned enterprises, however, median leverage has been unchanged at about 110 percent. Leverage has increased at the tail end of the distribution, driven by rising debt at companies in construction, mining, real estate, and utilities. An increasing share of debt is attributed to a few companies with high leverage ratios. China is different from other markets in an important way. Many large corporations and nearly all the major banks are state-owned”.

As a general rule of thumb, lenders, even when they’re lending to themselves, expect utilities to show an asset coverage ratio of at least 1.5:1 and industrial companies to show 2:1 coverage. China’s coverage is conservative:


But, you protest, what’s the quality of the underlying assets? Because its books are open, China’s trillion-dollar high speed rail (HSR) network provides a useful example. Critics liken it to the bankrupted Eurostar Channel Tunnel and predict a similar fate, but does that analogy hold? After all, China’s entire network–from the bonds to the land, rights of way, railway factories, stations, infrastructure and associated development–is owned in common and operated, purportedly, for the common good. There are no externalities.

Nor are there the unexpected cost overruns so common in such projects. The network costs forty percent less than Europe’s thanks to automated installation of mass-produced, unballasted rail sections, pylons and bridges ordered by the meter, trainsets ordered by the score and equipment like the Bridge Girder Erector laying 300 ft. girders in 50 minutes. Planning, production and assembly are tightly integrated, eliminating costly downtime. A predictable percentage of the initial investment returns in the form of increased income and sales taxes rippling out from factories and construction sites, a portion of which is allocated to paying down the loans. By now, planners know that every \$30 million (100 million RMB, PPP) they invest in metro projects permanently lifts a city’s GDP by \$80 million and creates 8,000 jobs. The further they extend the network the more accurate their cost predictions and bond pricing become.

Lines like Beijing-Shanghai are already highly profitable on operating revenue, partly because fares have stayed flat while the average wage has doubled since the first line opened in 2011, meaning that twice as many people can now afford HSR. This year, 1.8 billion riders will save four hours compared to other travel modes and, since the average urban wage is US \$1,000/mo, HSR will save each rider \$24 of productive time for a total of \$43 billion. Some of that will boost economic activity and, of course, tax revenues.

ChinaDebt-2 But it is real estate, not construction, taxes or ticket sales, that generates the network’s main revenue stream. The government owns all the land around the purpose-built HSR stations and develops it within a five kilometer radius and collects rents on the improvements.

Xinjiekou Station in Nanjing, above, has dozens of access points, hundreds of stores and thousands of desirable condos within a block’s walk–all developed by the railway and all producing bond-retiring revenues. Those ‘stations in the middle of nowhere’? When new towns are built around them–and they will be–land sales, development and an increased tax base will help retire the bonds, too.

Moving passengers to HSR has freed up older lines to carry more (and more profitable) freight, while nationwide same-day, intercity HSR package delivery boosts online shopping. Predictable revenue increases can be allocated to bond coverage, as is the in-train advertising revenue stream from billions of impressions delivered to captive riders whose incomes are 30–50% above the national average.

Tourism revenues? PNAS says, “HSR is responsible for 59% of the increase in market potential for the secondary cities connected by bullet trains. Economic geographers call market potential ‘a geographic area’s access to markets for inputs and outputs’ and a 10% increase in a secondary city’s market potential is expected to be associated with a 4.5% increase in its average real estate price”. HSR promotes livability and, thus, growth of second-tier cities and collects taxes on the increased revenues. The network helps rural areas profit from their natural resources by bringing business opportunities and tourists and boosts rural people’s outward mobility.

Compared to automobiles and aircraft, which which rely on imported petroleum, HSR uses far less energy and draws power from more diverse energy sources, including renewables. This cuts billions from China’s energy import bills and, since it now owns all the HSR intellectual property rights, boosts rail export revenues–a virtuous circle if ever there was one.

The network, which now reaches remote, second-tier cities like Urumqi and Kunming, promotes social cohesion, labor mobility, a national market and environmental improvement partly because Beijing acts as what Zhang Weiwei calls ‘a neutral government shaping national consensus,’ and it’s a government whose investing is as skilfull as its planning. Beijing selects investment decision-makers from the top one percent of the nation’s graduates (people with 150 IQs, if we trust Steve Hsu’s figures) and a St. Louis Federal Reserve Bank investigation appears to confirm this:Is Government Spending a Free Lunch? Evidence from China, suggests that the the government makes 200-300 percent return on its investments. And investment is, of course, another name for debt.

Though China’s overall debt-to-GDP ratio is higher than the USA’s, three factors set them apart: The Chinese economy is growing four times faster, she has negligible foreign debt exposure and her consumers carry half as much debt as Americans, making her economy less vulnerable to foreign pressures and consumer behavior. According to the Bank for International Settlements, the world’s big debtors line up like this:


With thanks to Byeungchun Kwon and Marjorie Santos at BIS. Renminbi converted to 2017 dollars using purchasing power parity. Excerpted from CHINA 2020: Everything you Know is Wrong , forthcoming, a book about China’s first major transition since the death of Deng Xiaoping. Godfree Roberts lives in Chiang Mai, Thailand and, until the new rail link is completed, will continue commuting an hour to Kunming, China, whence and taking the HSR to Beijing.

The China/America Series
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  1. map says:


    This means we can hit China with massive import tariffs until companies relocate factories here.

    • Replies: @Anonymous
  2. Anonymous • Disclaimer says:

    This sounds right to me.

    A few other points here.

    1) The kind of debt China has brings a return on investment because it is mainly infrastructure spending like power plants and high speed rail. Failed developments like ghost cities are partially offset by successful projects.

    The kind of debt America has will not bring a return because it is mainly social spending on things like social security, medicare, and immigrant benefits.

    2) The way the Chinese economy is set up, is basically a playbook on how to avoid the kind of predatory capitalism America exports everywhere. That is why China has been so successful and why China is such a threat to the west.

    Having most of your debt be domestic and not foreign helps protect them against hedge funds who try to push a country into debt and then short their currency.

    Also limiting foreign companies, especially in the financial sector, helps insulate the economy against nefarious plots. ie no Facebook color revolutions. This also enables the country a measure of independence in case the country needs to go it’s own.

    3) What worked for China while their economy was so primitive, will start to have diminishing returns. Eventually they will need to have more of a decentralized market economy.

    This will be painful for China to go through, but because they built their economy up before they attempt this their chances of successfully neutralizing economic attacks from the west go up substantially.

    • Replies: @The Alarmist
    , @CalDre
  3. Brabantian says: • Website

    Very very wrong article here by Godfree Roberts. What he misses, is the massive amount of Chinese debt, in part through shadow banking, that is in fact dependent on the foreign currency pyramid ponzi which is most usually described as the ‘eurodollar’. China’s ‘eurodollar’ problem is the largest in the world, as has been wonderfully explicated by the brilliant economics writer Jeffrey Snider of Alhambra Partners & Real Clear Markets.

    The Chinese credit black hole of maybe \$35 trillion, is what made a quarter of China’s ‘foreign currency reserves’ evaporate quite quickly recently. It is fanciful myth (or propaganda) that China doesn’t have huge foreign credit exposure, as is shown by the exchange rate / capital flow etc crises that occur every 90 days or so, with the Chinese central bank utterly struggling to keep a lid on things and to source ‘dollars’ for needed flows … See Snider’s work above, for ongoing documentation of these Chinese crises over the past several years.

    There is no doubt about China’s long-term rise to dominance, but it is likely to parallel the 20th century US rise to hegemony with a 1929-style huge crash. The whole world will be in a mess when the eurodollar system’s fragilities finally explode the global credit bubble – there is no doubt the USA will be in a world of hurt as well etc – but China has no immunity from the global credit bubble which in fact has been in slow-death mode since 2007.

    Had to chuckle reading the pro-China Godfree Roberts, he seems on the propaganda train in suggesting China is not opaque in its book-keeping. Roberts writes “Because its books are open …” HA HA HA

    • Disagree: GreatSocialist
  4. “Mao set the example and grew GDP by 6.2 percent annually for twenty-five years without incurring a penny of debt, a feat probably unmatched in history.”

    The system was most obviously copied from the Soviet Union. Just like most of other things one can find in China especially in military.

    • Replies: @Randal
    , @Avery
    , @Sam J.
    , @Anonymous
  5. Yep, this time it’s different.

    Heard that song a few times in my life.

    • Replies: @Joe Wong
  6. Randal says:

    Informative and interesting piece, thanks.

  7. Anonymous • Disclaimer says:

    Who is “we”?

    • Replies: @godfree Roberts
  8. Though China’s overall debt-to-GDP ratio is higher than the USA’s, three factors set them apart: The Chinese economy is growing four times faster, she has negligible foreign debt exposure and her consumers carry half as much debt as Americans, making her economy less vulnerable to foreign pressures and consumer behavior.


    Every year when the WSJ runs its usual ‘China is a big debt-bomb about to explode’ piece, I just have to laugh out loud, because it’s a massive act of projection! In reality, virtually all of China’s debt is internal–the vast majority of it is owed by certain publicly owned corporations to certainly publicly owned banks. It’s no different when the Social Security Administration here borrows money from the Treasury Department: it’s just like moving twenty dollars from your right pocket to your left pocket. It’s all an accounting gimmick. Meanwhile, China has public-sector banking instead of Rothschild banking or a Wall Street controlled Fed, so they have almost no external debt at all.

    So the real reason why the Journal hates China? It’s because they are now the worlds largest experiment in Modern Monetary Theory (MMT) – the grown-up alternative to Rothschild banking.

  9. jim jones says:

    China`s biggest asset is its women:

    • Replies: @Chris Chuba
    , @Anonymous
  10. “Renminbi converted to 2017 dollars using purchasing power parity”

    AKA cooking the books,

    • Replies: @godfree Roberts
  11. @Brabantian

    I’ve done tons of work with people and companies in China. In China, profits don’t matter, putting people to work is the priority.

    How long can an economy based on Ghost collateral (I didn’t see that brought up when I scanned the article…..i usually just scan thru these “glowing” China to rule the world articles so I may have missed it….nope, did a search) and no profit motivation last?

  12. Randal says:
    @Sergey Krieger

    The system was most obviously copied from the Soviet Union.

    If so, then they seem to have significantly improved on the original, since they haven’t yet shown any sign of finishing up like the Soviets did in the late 1980s.

    Just saying…..

  13. JL says:

    I don’t think there is any doubt about that. There is a whole field of study on this subject. I seem to remember reading somewhere that contemporary Chinese communists considered Bukharin to have presented the best model for development under a communist system and studied his work accordingly.

  14. @Seamus Padraig

    The quote you posted stood out for me also, and I came to a similar conclusion.

    Here’s another point that caught my attention.:

    Compared to automobiles and aircraft, which which rely on imported petroleum, HSR uses far less energy and draws power from more diverse energy sources, including renewables. This cuts billions from China’s energy import bills…

    It’s become pretty obvious that when nations attempt to decouple themselves from dependence on imported petroleum or control of their petroleum resources or finance by globalist gangsters they usually end up, unfortunately, being vilified, undermined and attacked.

    “… I spent most of my [33 years in the Marine Corps] being a high class muscle- man for Big Business, for Wall Street and for the Bankers.

    In short, I was a racketeer, a gangster for [crony] capitalism.”

    Major General Butler USMC, War is a Racket, 1935

    • Replies: @Seamus Padraig
  15. @Randal

    They did not. They diverted. Without massive transfer of western manufacturing base to China they would continue to tred water as they were doing it until 90’s. They never managed to repeat Soviet success based solely upon own resources.

  16. Joe Wong says:
    @The Alarmist

    Not a few times, but in thirty years, the American and their beggar-thy-neighbor lackeys have been saying the incoming collapse of China already thirty years. And you will insist you heard that song until end of your life too.

    • Replies: @The Alarmist
    , @interesting
  17. Agent76 says:

    May 17, 2017 One Belt One Road and Two Wars? China Spars with North Korea and India

    Peter Lee: One Belt One Road and Two Wars? China Spars with North Korea and India. Also, Miles Kwok goes large. Day of reckoning for Erdogan’s Uyghur adventure. And anti-Chinese agitation shadows Indonesia.

    • Replies: @godfree Roberts
  18. Avery says:
    @Sergey Krieger

    Yeah, Chinese have copied much from USSR/Russia.

    But one thing Russia needs to copy from China is its current government structure.
    China is run by some kind of a committee, with a standard issue, colorless bureaucrat taking the helm ever few years. It’s a very fault-tolerant system. The guy can drop dead tomorrow from heart attack and nothing will change in China.

    Chinese have had some notable leaders, like Deng, but there seems to be an unseen (Communist Party) organization that makes sure no one individual can screw* things up and ensures the country is ‘Steady as she goes, Mr Sulu”.

    Russia, since the days of the Tsars, has had a fundamental weakness.
    A good Tsar does a lot good things, and moves the country forward.
    Then a bad Tsar comes along, and screws everything up.
    Back to square one.

    Putin is a good ‘Tsar’: what happens to Russia after him?
    What if another Yeltsin is elected?
    There is no System in Russia to assure as smooth continuity of leadership and State policy.

    * Chinese would never allow one man – like Gorbachev – to dismantle the country so sloppily.

    • Agree: Sergey Krieger, JL
    • Replies: @Sergey Krieger
  19. The problem isn’t whether you have a downturn. It is how you respond to the downturn. Since 2008, the US hasn’t been able to clear its debt. You can read Stephen Keene and Michael Hudson on the importance of debt clearing.

    Debt can be cleared in a number of ways:

    1. Bankruptcy

    2. A jubilee (debt moratorium).

    3. Dying.

    So, instead of letting US debt clear through bankruptcy, the Fed intervened to keep the banks solvent. It did this to preserve the social order by keeping the rich, rich and the poor, poor.

    Joe Biden helped jam up consumer debt by making it harder to declare bankruptcy. Student loans can’t be discharged under bankruptcy further jamming up the debt in America.

    U.S. senators are about to pass a bankruptcy bill so hostile to ordinary American families that it could only have come about in a place as corrupt, cynical and unmoored from reality as Washington, D.C.

    In a major downturn, China can cut taxes, expand credit to foreign markets, stimulate with more infrastructure programs and let the market clear bad debts.

    I don’t think China has had a single quarter of negative growth in over 30 years.

    • Replies: @Ben Banned
  20. TheJester says:

    My understanding of the implosion of the Soviet system is that corruption became official and almost universal. Society became a Potemkin Village writ large.

    The elite enjoyed benefits they tried and failed to hide from the population such as dachas in the country, spacious apartments in Moscow, special medical clinics, specialty stores with Western goods, free tickets to the Bolshoi, Western travel, and “pay in a packet” (a secretive distribution of cash in an envelope). The corruption filtered down to the lower levels to the point nothing was as it appeared and little functioned as it should.

    This was apparent in the cynical jokes passing around the Soviet Union.

    “Floors parkay … doctors okay”.

    “They pretend to pay me and I pretend to work.”

    Perhaps China’s future will depend on its ability to root out corruption to avoid an economic, social, and political implosion similar to the Soviet Union.

    • Replies: @Beefcake the Mighty
  21. @Randal

    Chinese improved one aspect which is crucial. Power transfer between leadership generations. It is what caused Soviet collapse. People of no merit and abilities getting to the very top and leadership generational gap due to some leaders staying too long without adequate replacement.

    • Replies: @annamaria
  22. @Avery

    Yes, I posted it below. Power transfer between generations and check and balances to avoid leaders going nuts Khrushov, Gorby,Yeltsin style.

    • Replies: @Daniel Chieh
  23. Stan says:

    China articles attract loser white beta males with a yellow fetish.

  24. @Sergey Krieger

    The Soviets also relied on Western technology, either seized from Germany after the war, or in most cases transfers facilitated by the US, see Anthony Sutton’s work.

  25. @TheJester

    Potemkin system also describes the US perfectly.

  26. @Anonymous

    ” The way the Chinese economy is set up, is basically a playbook on how to avoid the kind of predatory capitalism America exports everywhere. That is why China has been so successful and why China is such a threat to the west.”

    If by that you mean that the Government often executes predators, or at least gives the occasional public execution for good measure, and where it doesn’t, the little people get together to inflict justice, then you have that right, bro.

    How many Western bankers have been jailed or shot since 2008? Was the head of the last fast food chain that poisoned tens or hundreds of people shot, or was he even forced to leave his job, big paycheck, and bonuses?

    Yep, Chicoms still get some things very right.

  27. @Stan

    Since we are being snotty, is Donald J. Trump the best America can do for leadership?

    And consider that he was judged by many to be the lesser of two evils.

    Let’s pause for a moment and think about that.

    • Replies: @Beefcake the Mighty
  28. @Joe Wong

    Thanks Mr. Wong, but the context of my remark was a reflexion of my experience with such comments in the western markets.

    China may well be different this time … then again, it may not.

  29. @Si1ver1ock

    At present he is the best, unfortunately. The system has to end somehow, the end has to start in some way. Trump is potentially the beginning of the end, at best. But there is still a long way to go. Until then he will have to do.

  30. @Si1ver1ock

    A couple of obvious externalities our Chinese cheerleader/manic industrialist ignores . China still has an immense number of poor people who will die poor with lives spent in shitty factories with worse outcomes in rural areas. China can’t even put catalytic converters on their millions of diesels. South East Asia is now as toxic as sewer in some parts. Commie-capitalism better get stoic and do something about the damage. Note how the US thrashes about in desperation, wanting to set fire to everything. Her citizens are immersed in daily big brother style monitoring as they
    comment and rage on grade school level impulse driven “economics” blather on social media.

    Does America need a better centralized authoritarian police state to get ‘er done? Maybe. But the mafia in power now is more concerned about housing prices and its military. Public transportation? Jobs? Housing? More like a feast for parasites with a big fat military cancer.

    The US can still use finance through China to make land war in Afghanistan but the cost is driving casualities and social disasters all over the USA. Maybe China won’t destroy itself like the magical thinking fools of the USA have.

  31. @jim jones

    @jim jones, why must you torment me?

  32. Sam J. says:
    @Sergey Krieger

    “…The system was most obviously copied from the Soviet Union…:

    No I believe the present system is not copied from the USSR but from Japan. The Asians are eating our lunch with monopolistic technology mercantilism. We at this point would be better off not trading with them at all or managing all trade with them at least. This has been talked about here several times. Here’s a paper on what the Japanese are doing and the Chinese are doing the same. The Japanese manage trade with China and account for a large proportion of embedded semiconductors and tooling that make up the exports to the US from China. If our government doesn’t stop it we will be nothing but hewers of wood and miners for the Asians.

    Japan, Refutation of Neoliberalism

  33. @Beefcake the Mighty

    Not to such extent and learned to make own excellent things rather quickly.

    • Replies: @Anonymous
  34. @Stan

    F’in get over it. What’s so beta about trying to have a rational debate about a world powerhouse? Betas would be the the sort to have their heads in the sand. Others try to discuss realpolitik.

    My high school principal, the most badass man I’ve ever known, was telling us in the 80’s before the Soviet Union fell that the country to watch for was China. As a career military man in three wars, the experience of fighting them in Korea- and considering them to be a more formidable opponent than the Germans at the Battle of the Bulge- helped shape his view that the Chinese weren’t just a bunch of low-T grinds. I guess forcing to beat a 150 mile retreat might have had something to do with it.

    Quit basing your worldview on what you see with Asian grad students on college campuses and the dorks who love them.

    • Replies: @Johann Ricke
  35. Avery says:
    @Beefcake the Mighty

    {….either seized from Germany after the war,…..}

    Well, US also seized a lot of technology from Germany (as did SU).
    Both US and SU became space powers thanks to the work of (Nazi) German scientists.
    If memory serves Werner von Braun was involved in the Apollo program.
    The jet engine was also developed by Germans, which both US and SU copied.

    And Soviets did produce many firsts, like being in space first (Sputnik), first human in space (Gagarin), etc.
    Also, Soviets launched the era of robotic space exploration with their Lunokhod program. Lunokhod 1 was the first roving remote-controlled robot to land on another world. In 1970 Lunokhod 1 and in 1973 Lunokhod 2 landed on the moon.

    [Not until the 1997 Mars Pathfinder was another remote-controlled vehicle put on an extraterrestrial body] (from Wiki)

    Of course Soviet economic model could not sustain the necessary expenditures, and they lost the race to the Moon.

  36. Anonymous [AKA "littlebrains basquebritish"] says:
    @jim jones

    and your not getting any small brained british descendant , a chinese woman can smell your bad immune system, non EDAR carrying ass and shun you.

  37. @Beefcake the Mighty

    …see Anthony Sutton’s work.

    At the outside chance yer not aware of it, here’s another. It’s both astonishing and incredibly credible. It’s about the massive transfer of both money printing and atomic energy technology and supplies to the Stalin regime by FDR during WW2, mostly through Malmlstrom Air Force base in Montana.

    From Major Jordan’s Diaries – The Truth about the US and USSR

    In 1943, a Congressional investigation revealed that even before the U.S. had built its first atomic bomb, half of all the uranium and [the] technical information needed to construct such a bomb was secretly sent to Russia.


    This included chemicals, metals, and minerals instrumental in creating an atomic bomb, and manufacturing a hydrogen bomb. In 1980, James Roosevelt, the son of President Franklin Roosevelt, wrote a novel, A Family Matter, which detailed how his father made “a bold secret decision… to share the results of the Manhattan Project with the Soviet Union,” in 1943 and 1944.

    Air Force Major Racey Jordan was a Lend-Lease expediter and liaison officer for the Soviets in Great Falls, Montana, (now Malmstrom AFB) which was the primary staging area for the massive Lend-Lease supply operation to the Soviet Union. In his diaries which were published in 1952 he said that the U.S. built the Soviet war machine by shipping all the materials needed to construct an atomic pile, including graphite, cadmium metal, thorium, and uranium.

    The above summary is from Wiki and the link below, but it is verifiable. I’ve read both books.

    • Replies: @Sam J.
  38. @Sergey Krieger

    But how would you ensure that you had a leader with full hair?

    • Replies: @Sergey Krieger
  39. @Anonymous

    Corvy, attiliathehen and Tiny Duck should form an avian club.

  40. mp says:

    China’s trillion-dollar high speed rail (HSR) network provides a useful example.

    All you need to know is that you can ride the China train in comfort, attended by comely young women in crisp uniforms who have been taught how to smile. You can spread out with some leg room, and get to where you are going pretty fast. Almost everyone riding is Chinese and well behaved. No worries about hoodlums and thugs. Contrast that with Amtrak, much less local routes such as MARTA.

    • Replies: @Sergey Krieger
  41. @Daniel Chieh

    Not the most important criteria.

  42. And again,one of your columnists, mr. Fingleton has explained this almost 10 years ago. And in last 3-5 years he wrote several articles why Chinese dragon will only continue to grow in the future

    • Replies: @RadicalCenter
  43. The United States and Europe used to be the economic powerhouses of the world. What happened? They turned their currency creation over to private banks and began borrowing their own money at interest. What else happened? The people of the West became spoiled. As evinced by the Baby Boomer generation, they developed an entitlement attitude in which they did not recognize that economic policy has economic consequences. The standard belief of your average lemming is that now that finance has corrected all of the problems associated with boom and bust cycles, we no longer have to fear severe economic disasters. They will only be slight hiccups which will be cured in short shrift. The people of Modern China have never experienced the type of prosperity they have now. I think it will be interesting to watch what happens when they become as spoiled as the West and expect their economy to always be stable and to constantly grow richer. But, we may not have the time to watch for this. The world economy is on a precipice now. We will all be effected by the outcome. Scary, but interesting times.

    • Replies: @Daniel Chieh
    , @MBlanc46
  44. CF says:

    Why has no one, so far as I can see, mentioned the millions of US debt held by PRC? If their debt gets out of control they simply sell their US bonds: problem solved!

    • Replies: @Seamus Padraig
  45. jim jones says:

    China surrenders to Britain at the Treaty of Nanking:

    View post on

    • Replies: @RadicalCenter
  46. Someone says:

    They use a branched variation of the American System of Economics, which was created by B. Franklin and served many countries such as Imperial Japan and National Socialist Germany.
    This system is debt-averse and would create immense prosperity.

    Now, for such system to be implemented, Private Banks and other Private financial institution would have to be destroyed, and they simply control the Western World and wouldn’t let this happen.
    They also control the Media and misdirect people from the problem.

    Oh, they’re also all Jews.

  47. @Anonymous White Male

    The people of Modern China have never experienced the type of prosperity they have now. I think it will be interesting to watch what happens when they become as spoiled as the West and expect their economy to always be stable and to constantly grow richer.

    I highly suspect that your unstated thought will be true – they will become just as social justicey and entitled, and ultimately bring the exact same social pathologies which are already rising. In fact, I think this is probably the single greatest dismay in Japan to use another example – its not that the lives of the average Japanese is unpleasant at all, but there’s a lot of frustration at the sense that life isn’t getting betterand we aren’t getting richer like our fathers were.

    When the set expectation that things will always get better, wealthier, freer, faster, etc, then even holding steady feels like a defeat. And then they engage in peculiar behavior in an effect to get the same high as they were before.

    I’m sure Godfree will disagree, in part because he believes that the centralized management of China will successfully do something different, and that the technocrats will pull off something amazing. Maybe. China is different from Japan and South Korea, more dynamic and competitive, often vicious and certainly willing to gamble on ideas, including terrible ones.

    But for myself I’m less optimistic about the state of humanity as a whole. I don’t think any of us will escape the atomization trap.

  48. utu says:

    the bankrupted Eurostar Channel Tunnel

    It only bankrupted on the British end. If UK adopted the model initially proposed by France there would be no problem.

  49. @Daniel Chieh

    what terrible ones? give an example or two?

    I personally would choose chinese technocrats over retarded, controlled, bought, traitorous american politicians any day.

    • Replies: @Daniel Chieh
  50. MBlanc46 says:

    My God, Communism works!

    • Replies: @Daniel Chieh
  51. MBlanc46 says:
    @Anonymous White Male

    I’m an early Boomer, and I certainly don’t have an “entitlement attitude”. Nor does my slightly younger wife. Nor do my friends, who are mostly of the same generation. None of us doubted that we’d have to work our tails off for everything we got, and that’s just what we did. Perhaps you should expend some effort learning about the way the world actually works instead of spouting the first piece of BS that comes into your empty head.

  52. @mp

    The progress is obviously is obvious. I remember riding Shanghai – Urumqi train back january 1989 ying zuo/ sitting place for 3+ days. People around were spitting and throwing garbage on the floor and water on the inside of the windows was frozen solid. Now people are free from those exotics.

  53. @CF

    Exactly. What the China-bashers always leave out is that the PRC is the world’s largest creditor by far, and that most the debt they hold is ours. Theoretically, if they wanted to, they could easily dump our bonds all at once, causing a stampede on the bond market powerful enough to crash the dollar. They only keep us afloat to continue buying their shit. They’re not dumb …

  54. Anonymous • Disclaimer says:
    @Sergey Krieger

    Virtually all of it:

    In a few words: there is no such thing as Soviet technology. Almost all — perhaps 90–95 percent — came directly or indirectly from the United States and its allies. In effect the United States and the NATO countries have built the Soviet Union. Its industrial and its military capabilities. This massive construction job has taken 50 years. Since the Revolution in 1917. It has been carried out through trade and the sale of plants, equipment and technical assistance.

    • Replies: @Sergey Krieger
  55. @jacques sheete

    It’s become pretty obvious that when nations attempt to decouple themselves from dependence on imported petroleum or control of their petroleum resources or finance by globalist gangsters they usually end up, unfortunately, being vilified, undermined and attacked.

    Bingo. That describes pretty much every single country we have attacked, sanctioned or ‘color-revolutioned’ over the last few decades. The only problem with China is that they’re too big to attack or sanction, and their security’s too good for a color-rev. So all the western establishment can do now is vilify them – even while importing all their goods and selling them all our real-estate. Pretty pathetic!

  56. Moi says:

    Chinese are smart!

  57. @citizen of the world

    I don’t particularly trust, admire, or like China and the Chinese people in general.

    But our children are learning Mandarin from a young age. Whether we like it or not, there are many reasons to think that China will consistently outperform the USA and Europe – not to mention the more primitive peoples.

    One recently created reason is that the USA and Europe are allowing tens of millions of less intelligent, less productive, hostile, untrustworthy aliens from backwards cultures — Islamic and/or African cultures — to colonize them, milk their taxpayer resources (causing eventual higher taxes, more debt, and perhaps higher inflation to cope with the debt), harass and attack their people, and generally make society more dangerous, less intelligent, less unified, less peaceful, less trusting, and less effective in getting things together.

    China is not making the same mistake.

    Also, how can our countries compete with China effectively in economic and military spheres when we spend trillions on pointless non defensive wars and occupations, usually unsuccessful ones — Korea, Vietnam, Iraq one, Iraq two, Afghanistan, and now perhaps Syria — while China instead wisely spends its trillions on developing commercial and personal ties with other countries, lending to or even subsidizing foreign regimes to create good will, and building massive modern infrastructure (the new Silk Road from Germany to china, and other projects) to carry its goods farther and faster to every corner of the advanced world.

    China can simply watch the USA, Canada, Australia, and Europe give away the safety and resources and culture of their peoples to mass third world immigration, becoming a mostly ignorant, unintelligent, lazy white slash third world hybrid like Brazil or worse. China can likewise sit and watch while western countries squander what they have and borrow to the hilt for wars that do not benefit their people in any way, while China builds its military and its currency reserves stronger with each passing month.

    So our children are learning their disgusting language.

  58. @jim jones

    If we are not careful, there may be a similar ceremony whereby the USA “voluntarily” surrenders or maybe “sells” Hawaii and Guam to a much more solvent, unified, powerful, and aggressive China.

    Taiwan will become part of the PRC, while Korea, Japan, and Australia / NZ will become Chinese colonies or vassals.

    Western Canada, at least the Vancouver/Richmond/Burnaby metroplex in “British” Columbia, will be increasingly ethnically Chinese and increasingly economically intertwined with China, more so than with the USA or Britain.

    I won’t like seeing the updated version of that portrait.

  59. Anonymous • Disclaimer says:
    @Sergey Krieger

    It wasn’t copied from the Soviet Union, but from countries like Japan, South Korea, and Taiwan. The Soviet Union never got land reform right, which is crucial:

    The measures taken by Japan, then South Korea, Taiwan and, after 30 years of Maoist missteps, communist China were, argues Studwell, threefold. They involved land redistribution, the development of an export-oriented manufacturing policy, and the formation of a closely controlled finance system. The three important development insights, he argues, are that “a country’s agricultural potential is most quickly released when its farming is transformed into large-scale gardening supported by agricultural extension services; that the technological upgrading of manufacturing is the natural vehicle for swift economic transformation … and that finance must be harnessed to both these ends”. Only the small city-states of Hong Kong and Singapore have successfully taken a different path.
    The most original part of the book deals with farming. Studwell, whose Asian Godfathers (2007) dissected the failures of crony capitalism, argues convincingly that successful Asian nations were built on radical land reform. Japan began parcelling out land after the Meiji Restoration of 1868, a policy continued after the war when the US occupation oversaw a seemingly un-American exercise in land confiscation and redistribution. South Korea and Taiwan followed suit. Large farms are often considered more efficient because they can be highly mechanised to produce higher yields per farmer or per unit of investment. In other words, they are more profitable. But in poor, labour-abundant countries, Studwell contends, that is not the point. The goal should be to use available labour to maximise yield per hectare, something achieved on smaller, intensively farmed plots.

    • Replies: @Sergey Krieger
  60. @MBlanc46

    China is as communist as American media is unbiased.

    • Replies: @MBlanc46
  61. @RadicalCenter

    So our children are learning their disgusting language.

    世上无难事, 只怕有心人

  62. @Astuteobservor II

    The Cultural Revolution, for one. These days the technocratic government seems to mostly work, but its riven with strife and struggle like any other government; Jiang Zeming’s cadre versus Xi Jinping’s cadre for a recent example.

    I do think that corruption has recently been driven down with Legalist-like tactics, but this still isn’t an example of a permanent solution. Legalism never is.

    China has a lot of problems. It probably has more intelligent leadership but I could argue that the Deep State actually in control of the US probably is pretty intelligent too. I’m not so sure that the Chinese elite are “for their people” either, whatever that means, in a country with powerful provincial loyalties.

    What do the Shanghai-ese care about countryside, for example? Not a lot, given how they try to control the urban hukou. Do the Chinese elite care about illegal immigration that gives them cheaper servants even if it deprives the local of work? Do the Chinese companies outsource to Vietnam or SEA?

    Of course they do. You think that Jack Ma feels innate kinship to someone else because he’s Han? Yeah, right.

  63. @Ben Banned

    South East Asia is now as toxic as sewer in some parts.

    What would you consider North East Asia?

  64. Why don’t the Chinese spend money on cleaning up the environment than on building more ghost villages?

    • Replies: @Anon
  65. @yaqub the mad scientist

    I guess forcing to beat a 150 mile retreat might have had something to do with it.

    It was pretty impressive for an army equipped with mortars, where not every man had a rifle, going up against heavy artillery, tanks and an air force with air supremacy. What they did have in their favor, though, was numbers – at least 3 to 1 local superiority in all cases, and greater than 5 to 1 in many. It’s also the case that many weren’t even all that motivated – the bulk of the army consisted of surrendered Chinese Nationalist troops that Mao was looking to get rid of, to avoid the problem that Uncle Sam encountered in Iraq after the relatively bloodless defeat of the Iraqi army – a drawn-out war of insurgency. Given the estimated 800K Chinese dead and tens of thousands of Chinese POW’s who chose to go to Taiwan, I’d say he succeeded in his intent.

  66. @Anonymous

    Only in the very beginning probably. Soviet weapons were of Soviet design. You should read less this of Russophobic garbage unless of course it is what you want to hear. Soviet and American designs are different… It is easy to notice from handguns to planes and everything else.

    • Replies: @Beefcake the Mighty
  67. @Daniel Chieh

    Shi shang you nan shi, zhi pa you sin Ren.

    • Replies: @RadicalCenter
  68. @Anonymous

    From the article the way China manages financial system sounds similar to Soviet one. Soviet Union helped to build what constitute foundation of Chinese industrial complex and military. I’ll ots of people who occupied highest positions were educated in ussr

  69. @Daniel Chieh

    I didn’t know jiang’s group had any power after he left office. there is no one after deng who can command unyielding loyalty from the PLA right? without that, non of the cadres can last.

    Corruption is a non issue, usa got a ton of that too, we just made it legal. simply look at trump, brazen nepotism. and the retards are cheering still.

    I can’t said which is smarter, I just know that chinese lives has been improving while american lives has been declining simply because real wages has been stagnant for decades and inflation alone = decline of american living standard. I preferred elites who line their pockets while also improving the the lives of other citizens over the type we have in the usa – lining their pockets while stabbing other citizens in the back.

    Lets compare alibaba and amazon. one is allowing everyone a chance at their own business, the other is trying to create a monopoly by killing and replacing small business. There is no need for kinship, there is no place for kinship. it is just business. But one benefits a hell of alot more people.

    • Agree: Seamus Padraig
  70. @MBlanc46

    Where in my post did I hyperbolically state that all Baby Boomers have these traits. I am a Baby Boomer myself. I have no delusions about our generation. There are many Boomers that are red-pilled, and many that vote DemonicRat. I do know that our generation, when compared with early generations, was essentially raised in the lap of luxury and many never learned the first thing about personal responsibility. And I noticed that you feel you have the need to complain about an imagined slight that a real adult would have never have reacted to. Sort of like a spoiled Baby Boomer. Thanks for providing the authentic example.

    • Replies: @MBlanc46
  71. @RadicalCenter

    I always thought you were one of the more rational, logical commentators. Now I know better 🙂

    • Replies: @RadicalCenter
  72. MBlanc46 says:
    @Daniel Chieh

    That’s not what they say.

  73. Ron Unz says:
    @Daniel Chieh

    What do the Shanghai-ese care about countryside, for example? Not a lot, given how they try to control the urban hukou. Do the Chinese elite care about illegal immigration that gives them cheaper servants even if it deprives the local of work?

    But I’d think most Chinese leaders are generally “nationalist/patriotic” in the same way that (say) most European leaders were 100+ years ago.

    On a somewhat related issue discussed in this thread, it’s always seemed to me that Chinese people are among the less ethnocentric in the world.

    First, I think Chinese ideology has always been assimilative rather than ethnocentric. There was that famous directive by Confucius saying that people who dress and behave like barbarians should be considered barbarians, but people who dress and behave like Chinese should be considered Chinese. Thus, China could be considered the first “propositional nation.”

    And on an empirical level, China has absorbed and assimilated a vast number of different groups over the millennia, including various conquerors, and even absorbed its small Jewish population, which is unusual in history.

    Meanwhile, consider the cultural and genetic selective pressures acting on the Chinese population. I’d guess that the vast majority of today’s Chinese are descended from individuals who had virtually no regular contact with non-Chinese for the last 40 or 50 generations. If everyone that you and all your ancestors had ever encountered were fellow Chinese, there would be no reason for any sort of egocentricity to evolve or be maintained. (Naturally, there would be a tendency to favor your own family members or kin-group, which is a different thing.)

    By contrast, consider Indian society, which for thousands of years has consisted of dozens or even hundreds of interspersed ethnic/caste/sub-caste groups, many of them generally hostile to each other. Obviously, there would be enormous pressure for egocentricity to evolve in such a social environment. And to some extent, the same is true for much of the Middle East.

  74. map says:

    The entire Chinese economic system is predicated on massive production and technology transfer from the United Sates while maintaining open markets inside the US for the purpose of dumping Chinese junk…which is exchanged for a hard currency tradeable anywhere in the world.

    Who would not succeed under those conditions?

    • Replies: @Anonymous
  75. map says:
    @Seamus Padraig

    Robert Mundell is the China’s primary advisor.

    They built an entire university around him.

  76. Anon • Disclaimer says:
    @Priss Factor

    Actually they do. It started under Xi’s administration.

  77. Anon • Disclaimer says:

    Russian President Vladimir Putin awarded his Chinese counterpart, President Xi Jinping with the Order of the Holy Andrew the Apostle in Moscow, Tuesday. The Head of China became the third foreigner to receive the highest state award of the Russian Federation.

    It is probably not a good idea to take on Russia and China at the same time.

  78. @Daniel Chieh

    Would it have been more polite to say “their language, which in my humble subjective opinion, is not euphonic, to put it mildly”?

    In any event, I said that our kids are learning that fingernails-on-the-chalkboard language, not that I was learning it. Accordingly, please state your insults in English or German. Thank you so much.

    • Replies: @Daniel Chieh
    , @Anon
  79. @Joe Wong

    That’s interesting because I didn’t hear a peep about China until about 2001 and then it didn’t really become an issue, at least in my business, until about 2004……so 2017-2004 = 13 years…..could you check my math as it sure sounds like you are exaggerating by saying 30 years.

    • Replies: @Joe Wong
  80. @Sergey Krieger

    Are ya telling him off for me, Sergey? ’cause Ol’ Roundeyes here can’t tell 😉

    By the way, Daniel, if it makes you feel any better, my wife is substantially Chinese — according to our friends at a major genetic-testing company. But she thinks Mandarin sounds like crap too.

    • Replies: @Sergey Krieger
  81. @Astuteobservor II

    Well, thanks, and I always considered you to be kinda, well, astute 🙂

    But now, I’ve gotta prepare the kids for the world the way it’s likely to be, not the way I WISH the world were going to be when I shuffle off this mortal coil.

    And that world, though not the one I wanted for my posterity, looks quite likely to be more and more dominated by Spanish (domestically) and Mandarin (globally) in the near future.

    • Replies: @Astuteobservor II
  82. Anonymous • Disclaimer says:

    PPP is a crock of sh*t. A cup of milk or a bike may cost a third as much in China, but when there’s scant enforcement for the consumer, you can’t trust that milk isn’t spiked with melamine, or the pedals won’t fall off the bike a week after you take it home. So saying the RMB has more buying power because items in China cost less is nonsense.

    I’d rather pay a bit extra to have some faith that my food is safe,my bike won’t fall apart, and if it does, that I can return it. Evidently, I’m not alone- the Chinese themselves don’t trust their own products, preferring to pay a premium well above and beyond what we pay to get the same item from America. If anything, that suggests their purchasing power is actually less, not more.

  83. @RadicalCenter

    Its not an insult, and its amusing that you think it is one, which reveals a lot about yourself in the sense of projection. Nor is Sergery’s reply(which is the read-out version of it) an insult. Its a proverb and part of the beauty of the language.

    It literally just translates into:

    “World has nothing difficult, only fear [those] with heart.”

    This is usually loosely translated into:

    “Where there is a will, there is a way.”

    Rambling insults in another language seem like a waste of time to me.

    • Replies: @RadicalCenter
  84. Anon • Disclaimer says:

    They aren’t insults. He was giving you encouragement. It is a Chinese proverb which can be roughly translated as “nothing is impossible to a willing heart”. I guess Sergey Krieger or Daniel Chieh can attest to that.

  85. @RadicalCenter

    Just dusting off my Mandarin. Used to be top notch 26 years ago. not so anymore. Your wife must be Cantonese….?

  86. Richard Vague published a great study on financial crises in 2014, “The next economic disaster,” which was echoed by Steve Keen’s “Can we avoid another financial crisis,” just released. Their thesis is that financial crisis tends to stem from private debt to GDP at 150% or larger, with a massive credit increase of around 18%tage points over a five year period. The examples they present are quite convincing. The above chart indicating China’s private debt to GDP over 200% plus a 2016 y/y credit increase amounting to +29.6% does not augur well for China’s financial health, going forward. Perhaps the construction of so many “ghost cities,” etc., was not such a wise decision, after all.

  87. @Ron Unz

    Your post reminded me of that Indiana Jones movie in which our hero with the help of a smart aleck Chinese urchin foils a monkey eating Indian prince….

  88. anon • Disclaimer says:

    While generally the case that the Western media exaggerates, distorts, or presents a one-sided (negative) view of the Chinese economy’s health, this piece is too narrow in that it highlights only the highest quality asset making up the country’s huge debt pile. It would be more credible if it also integrated mention of much less pretty assets including:

    1. Skyscrapers in 2nd and 3rd tier cities. Places like Chengdu have seen a lot of supertalls (300+m) constructed. Occupancy rates are awful.
    2. Malls. Lots of new malls but again foot traffic is poor especially outside of 1st tier cities.
    3. State owned enterprises. There are about 100 centrally owned state owned enterprises. They don’t make much money and their aggregate debt is so vast that it even exceeds the debt held by the central government.

    • Replies: @godfree Roberts
  89. @Daniel Chieh

    Yes, how unusual to expect some insults on an internet comment section. And even more unusual to expect an insult from a guy with a Chinese screen name to a comment insulting Mandarin. What was I thinking.

    You’re right that it sheds substantial light on my personal psychology. Good catch.

    Here’s a wild thought: if you want us to know what the Hell you are writing in Chinese or any other foreign language, provide the English alongside it.

    • Replies: @Daniel Chieh
  90. @Sergey Krieger

    Good guess, but she’s a Filipino who is directly descended on one side from Chinese immigrants to the Visayas, in this case central Philippines. So she never learned any Chinese language. She speaks instead fluent English, Tagalog, and Visayan.

  91. @RadicalCenter

    The future probably will prepare us with Google Translate, though I still do think that learning languages provides us with a window into the mindset of others. There’s reasonable evidence too that it also increases fluid intelligence slightly so I do wish your children good fortune.

    Incidentally, part of the beauty of the phrase is a recurring theme in Chinese. Notice how it is five words on one side, and five words on the other?

    世上无难事, 只怕有心人

    Its a “chenghua” or old saying, managing balance both in number of words, tonal quality and meaning. This is truly ancient as a form, with sayings in this form as old as to be in prehistory such as:

    良药, 苦口 – “Good medicine, bitter taste” and which naturally expands to doing the right thing, in spite of its bitterness or difficulty

    The continuity still lasts into its modern form with Mao Zedong’s exhortation:

    造反有理!, 革命無罪! – “Rebellion is justified! Revolution without guilty/fault!”

    And even now, into a pretty big policy of current China:

    一带一路 – “One Belt, One Road.”

    Its something I find very much beautiful.

  92. @Ron Unz

    And on an empirical level, China has absorbed and assimilated a vast number of different groups over the millennia, including various conquerors, and even absorbed its small Jewish population, which is unusual in history.

    Tong Hua(to make into the same) is indeed very much a Chinese concept, and one could argue that you really can’t have an Empire and be too ethnocentric. Sinicization, which was a huge force in Asia, had to have low enough entry barriers that an entrant couldn’t be rejected based on ethnicity alone.

    It was always noticed, I think but its notable that even in 700 AD or so, An Lushan who was of Iranian/Turkic heritage was able to be a high general in the Tang Dynasty and the equivalent of a significant noble and it seemed generally accepted.

    I think if Christianity has led a permanent mark on Europeans, Confucianism has left its permanent mark on the Chinese and part of that is a tendency to believe in meritocracy – or credentialism, take your pick. In doing so, it allowed it to be an inclusive culture but in the same way that some Unz commentators would argue that Christianity can be “cucked” by being universal, credentialism can be equally subject to attack.

    And of course, it makes China love a technocracy. And so, now as then, once again, China run by technocrats with a gigantic bureaucracy. Vaguely amusing.

    • Replies: @Anon
  93. @RadicalCenter

    you wished for the continued domination of english? :PPP I don’t see english going any where in the next 50 years. I see chinese learning english, americans learning mandarin, or like daniel predicted, google translate devices :))) these 2 languages will co exists internationally as china gains more economic power.

    on the spanish point, there is no changing it. the shift is happening, the last 2 decades cemented it. you can’t beat a birth rate of 5 per house hold. I am fine with it as long as they call themselves americans 🙂

    I simply find your commentary on mandarin as a disgusting language comical 🙂 that is a first on describing a language 🙂 are you old like working class? 😛 you read like old and angry 🙂

    • Replies: @Ron Unz
  94. Everything You Know Is Wrong

    Well, what little I know about China’s finances come from Michael Pettis’s blog, and professor Pettis agrees that a financial crisis in China is not likely (though not impossible) due to the ability of the Chinese to manage their system. However, Prof Pettis does say that the model they have been using to achieve 10% (ish) growth is going to quit working and growth on the order of 3% for many years is likely.

    This will have consequences for the rest of the world.

    • Replies: @godfree Roberts
  95. Ron Unz says:
    @Astuteobservor II

    on the spanish point, there is no changing it. the shift is happening, the last 2 decades cemented it. you can’t beat a birth rate of 5 per house hold.

    Actually, I don’t think that’s correct. Unless I’m very seriously mistaken, Mex-Ams and other Hispanic groups in America these days tend to only have 2-3 children, with their birth rates dropping pretty rapidly.

    As an example, California has become plurality Hispanic, and may even end up majority Hispanic down the road. But although that Hispanic population has a mean age in their peak reproductive years, the CA birth rate recently dropped to the lowest ever recorded in state history, well below what it was when CA was America’s whitest large state.

    Indeed, over the last couple of decades, the birth rate in Mexico itself has dropped very sharply, and Mexicans are now at a total fertility rate leading to zero population growth.

    • Replies: @Astuteobservor II
  96. @Sergey Krieger

    It is very good, I’ll say, for instant recollection after that many years.

  97. @Ron Unz

    That was just my exaggeration. Sorry for not pointing it out as such.

    I have looked at charts on pages like this Using us born numbers, it went from 5.5M to 35.9m in 50 years, almost a 7 fold increase. If this trend continues, 35×7= 245M, 50 years from now? That is just using the US born numbers, wholly discounting the increase from immigration.

    Not sure if this is correct? But it is how I see it, and why I agreed with radical’s point on Spanish.

    • Replies: @Ron Unz
  98. Anonymous • Disclaimer says:
    @Sergey Krieger

    Your narrative seems to be that the West arbitrarily transferred the manufacturing base to China. But China out competed everyone one else in the globalization game using a combination of hard work, investing in their infrastructure, and assimilating technology.

    Their economy is more of a communist-capitalist hybrid that works in the modern world that Russia never embraced. Meanwhile Russia’s economy is mainly a resource economy.

    • Replies: @Avery
    , @Sergey Krieger
  99. Anon • Disclaimer says:
    @Daniel Chieh

    It was always noticed, I think but its notable that even in 700 AD or so, An Lushan who was of Iranian/Turkic heritage was able to be a high general in the Tang Dynasty and the equivalent of a significant noble and it seemed generally accepted.

    Years ago I went Xian to see Emperor Qin’s Terracotta army and accidentally wandered into a Muslim quarter. Other than a few old Muslim men who had blue or green eyes, most if not all of the young Muslims looked no different from Han Chinese. It turned out that their ancestors helped the Tang emperor battle An Lushan’s rebellion force, and the land on which they worked, lived and worshiped was awarded to their ancestors by the emperor after the war. The land has been passing down from generation to generation over 1200 years.

    • Replies: @godfree Roberts
  100. Anonymous • Disclaimer says:
    @Ron Unz

    This is worthy of a separate article from you. I have never thought of this nor have I heard this articulated before but it definitely makes sense.

  101. Sam J. says:
    @jacques sheete

    “…the U.S. built the Soviet war machine by shipping all the materials needed to construct an atomic pile, including graphite, cadmium metal, thorium, and uranium…”

    I knew we helped them but not on such a scale. Interesting. Learn something new every day.

  102. Anonymous • Disclaimer says:

    Actually, China is one of the few countries to have thrived under these circumstances for the reasons stated in the article. See Mexico as a perfect example. Mexico got technology and production transfers but could not make anything of it.

    Also see Japan, who did develop their economy, but when their economy got too big for its britches was neutered by America.

    China is one of the few, maybe only country, to have been able to play the game to its advantage and avoid the Neo-liberal traps laid out for it.

  103. pogohere says: • Website

    I don’t know what Snider article you are referring to: maybe this one: “There’s Something Weird Going On”: Jeff Snider On The Global Dollar Shortage”

    or this: “In Their Flair for the Dramatic, the Chinese Make Things Interesting”
    6-2-17 ( in which Snider sez:

    If China is about to more completely de-dollarize, what does that mean? Writing about these topics the most immediate response is usually to think about the worst case – utter chaos and collapse. Given the nature of the eurodollar decay, that sadly cannot be ruled out but I also don’t believe it the base case, either. I think we passed the point of no return in 2011, so China’s possible (and I stress possible; there is a lot of interpreting and speculating here on my part, but reasonable, I think, to suggest it in this way as a possibility) experiment with thresholds may not be so seismic along those lines. [emphasis added]

    Why are you persuaded Snider ‘s analysis is correct?

  104. @juergenwahl

    The above chart indicating China’s private debt to GDP over 200% plus a 2016 y/y credit increase amounting to +29.6% does not augur well for China’s financial health, going forward. Perhaps the construction of so many “ghost cities,” etc., was not such a wise decision, after all.

    But the ghost cities weren’t financed privately; they were built by the government.

  105. martin2 says:

    The headline is rather inauspicious as a herald of the author’s intellectual grasp. How can one “know” something that is wrong? One can only believe a false proposition.

  106. Avery says:

    {Their economy is more of a communist-capitalist hybrid that works in the modern world that Russia never embraced. }


    {Meanwhile Russia’s economy is mainly a resource economy.}

    Not true.

    The share of oil & gas revenue in Russia’s GDP had dropped below 10%, according to World Bank data for 2015. Further, oil and gas generated only 17% of the country’s budget revenue same year.

  107. annamaria says:
    @Sergey Krieger

    “People of no merit and abilities getting to the very top and leadership generational gap due to some leaders staying too long without adequate replacement.” – is not this an endemic problem for the west as well?

    • Replies: @Sergey Krieger
  108. Ron Unz says:
    @Astuteobservor II

    Using us born numbers, it went from 5.5M to 35.9m in 50 years, almost a 7 fold increase. If this trend continues, 35×7= 245M, 50 years from now? That is just using the US born numbers, wholly discounting the increase from immigration.

    Extremely unlikely I’d say. Without immigration, almost none of the previous increase would have occurred, and Hispanic immigration these days has fallen to fairly low levels. After all, since Mexico has basically dropped to just replacement fertility, where would they all come from?

    Obviously, since Hispanics here are considerably younger than whites, the Hispanic population still has considerable demographic momentum. But the Pew study you quote projects that the Hispanic population will only grow to 110M. That’s obviously a considerable increase, but 110M isn’t 245M.

    Not sure if this is correct? But it is how I see it, and why I agreed with radical’s point on Spanish.

    Actually, after the crazy and unpopular “bilingual ed” in public schools was largely eliminated 15-odd years ago, Spanish is following roughly the same trajectory among Hispanics that Italian took among Italian immigrants 100 years ago, and is disappearing as the primary language used by the American-born generation.

    • Replies: @Astuteobservor II
  109. @Seamus Padraig

    I didn’t want to recap Vague’s entire book, but a further point is that a balancing of both public and private debt can ameliorate an increasingly bad debt situation. However, when both private and public debt in total increase more than 10%tage points over five years, then trouble tends to ensue. The 2016 y/y rate of private + public debt of +23.0% suggests a problem rather than a solution.

    • Replies: @Seamus Padraig
  110. Agent76 says:

    Aug 26, 2015 How the West Re-colonized China

    The “Chinese dragon” of the last two decades may be faltering but it is still hailed by many as an economic miracle. Far from a great advance for Chinese workers, however, it is the direct result of a consolidation of power in the hands of a small clique of powerful families, families that have actively collaborated with Western financial oligarchs.

  111. @Ron Unz

    110M, about 50-55% of the white population. But if the Spanish language ends up the same as Italian like you stated, I concede the point.

    • Replies: @Ron Unz
  112. Ron Unz says:
    @Astuteobservor II

    Incidentally, here’s another very useful Pew table, showing even though the Hispanic birthrate used to be much higher, almost 80% of the growth of the Hispanic population over the last 50-odd years has been due to immigration:

    • Replies: @Astuteobservor II
  113. @Anonymous

    My narrative is that they got a lot from USSR and still China could not do it alone without massive trasfer of manufacturing capacity from the West. Without this transfer China would not make it.

    • Replies: @Rdm
    , @Anonymous
  114. @annamaria

    The West for now have been able o allow a lot of things others could not because periferia has been feeding the core and the whole world financial system is set to benefit few at the expense of many.

  115. Joe Wong says:

    Please check your math with Gordon Chang, Peter Navarro, and all the China pundits in the USA, UK, and the unrepentant war criminal Japan.

  116. MBlanc46 says:
    @Anonymous White Male

    You know no such thing about Boomers vs. other generations and personal responsibility; you just like to run your mouth about that of which you are ignorant. I will admit that smart-mouthed punks such as you elicit more of a response than perhaps they should. Hence, 30.

  117. Anonymous [AKA "Alec Fagrin"] says:

    success always warrants jealousy.

    • Replies: @map
  118. CalDre says:

    That is why China has been so successful and why China is such a threat to the west.

    I hear this “China is a threat to the West” so often I usually don’t respond to it but today’s a nice day ….

    China appears very much to be part of the Empire, as is virtually every country ever colonized by the House of Windsor (including, of course, the Commonwealth, US, India and China, but excluding Russia, which was instead conquered by the German branch of a related dynasty, the House of Oldenburg, in 1762 with the ascension of Peter III as czar). China is given a very special status by the Empire: the rest of the Empire runs a huge trade deficit with China and sends it the Empire’s most advanced technology, including military technology. Do the “true” enemies of the Empire – Syria, Iran, Hezbollah, Russia (under Putin), N. Korea, etc. – get this sort of special treatment? Heck no, they get layers and layers of punitive sanctions, sabotage, threats of war and actual war. Only an idiot would so enrich an enemy they wish to destroy! and the Empire did not come to control the vast majority of the planet by being so very idiotic.

    As always, when studying political events, pay no heed – whatsoever – to what the politicians say. Judge their deeds, and their deeds alone.

    • Replies: @Rdm
    , @Anonymous
  119. Rdm says:

    I usually don’t comment, but since today’s a nice day…

    That’s the most idiotic comment claiming “China is a part of the Empire”.

    If you claim South Korea, Japan, Germany is a part of the Empire, I would partially agree. But China? You’d gotta be smoking weed until your eyes see the Sun as a moon.

    Empire stations their troops in their far-flung outposts. By doing so, they maintain Empire status while giving special treatment to their colonies. “Special Treatment” equals to “Giving credits” to their subordinate. You’d see Mercedes, BMW, Toyota, Honda, Hyundai, Kia but you never see GM, Lincoln driving in Tokyo Shibuya. Just to give you some examples.

    By giving special treatment, bad news from Japan, Korea, Germany are usually filtered in NYT, WSJ, HuffPost in the Empire daily feed. That’s why you don’t see Koreans copying shit tons of American technology, but some rural Chinese dudes making Iron Man out of iron scraps will get tons of “copycat” comment in US media.

    Empire don’t trash talk, give bad rep to their colonies, my friend.

    Finish up your weed and clean up.

  120. @MBlanc46

    The Forth Turning by Strauss and Howe states that Baby Boomers will be reviled in the near future and blamed for most of the worlds problems, unfairly in my opinion. I’m a Boomer myself.

  121. CalDre says:

    That’s the most idiotic comment …. You’d gotta be smoking weed until your eyes see the Sun as a moon …. Finish up your weed and clean up.

    I see you feel the need to insult, repeatedly, to prove you mantle. That’s immature, rude and annoying. I won’t respond to your trolling.

    • Replies: @Rdm
  122. Rdm says:

    So I’m a troll. You’re a guru.

    Although your master brain won’t be responding to my comment, I thought I might as well comment (or troll) the last time because today’s a nice day.

    Senkaku/Diaoyu island

    Ugh, your brain recalls the memory. Those evil Chinese dispute with Japanese. Senkaku island is administered by Japan but claimed by China. So administration name comes first, as Senkaku sounds like Japanese. What triggers the dispute even more was Japan let a private citizen own the island rather than status quo government administration. Japan submitted the dispute to ICJ to resolve. China refused to go to court. That dispute has been splashing all over American news.

    Evil China !!

    Dokto/Takashima island

    Wait what? never heard of it. Another evil Chinese dispute?

    Dokto island is located in Sea of Japan, administered by as you know by now, Korea and claimed by Japan. Japan submitted the dispute to ICJ. Korea wholeheartedly rejected. Not once, but TWICE. Where were the news?

    Empire filtered their mischievous colonies infighting.

    Those are snippets of what you should know. I can go on and on.

    Until you stop spewing out anything (for lack of better word) stupid, i.e., China is a part of the Empire, you can call me a troll.

    • Replies: @CalDre
  123. @Ron Unz

    I really like the projection without immigration table. 25% difference.

  124. CalDre says:

    I take it back, you’re not just a troll, you’re far worse than that. Obviously your amoeba brain can’t think past one level of abstraction. And if you said your junk to my face I would knock you to the ground of your mama’s basement where you cower before your screen, before you could react, you disrespectful, hate-spreading, clueless and useless amoeba.

  125. Rdm says:
    @Sergey Krieger

    agreed. Without technological transfer from the West (although that comes with a price), China will not make it to so-called economic miracle.

    • Replies: @Lin
  126. @juergenwahl

    China’s private debt is, in comparison with the west, extremely low. And their public debt, as I pointed out before, is just some funny-money owed by a government corporation to a government bank. In other words, their public debt is almost entirely sovereign — it is not owed to a foreign counter-party. That makes China’s situation very different from, say, Greece or Argentina.

  127. Lin says:

    @ RDM: “Without technological transfer from the West ..”
    tell me,what tech transfer ? China is under serious tech sanction by the yanks. And you don’t need much tech to make low tech products like garment. What are the biggest Chinese industry? Take a look:
    *Steel industry–little tech transfer from the west; but china did import continuous casting tech from japan during the 80s
    *Hi speed rail–Are u trying to make me laughing my butt off? The only significant tech transfer(from Germany) has to do with a 20 mile maglev line in Shanghai but there’s no other maglev line else where in China. Where’s are the yanks’ hi speed rail lines?
    *Cement industry ? Again I laugh my butt off
    *Solar voltaic industry? F**k, where’s my butt ?
    *auto industry ? Here your claim could make some sense with auto assembly lines. But again it’s for western manufacturer trying to get a share of the Chinese market. Auto assemble lines aren’t something Chinese can’t do independently. China is the biggest tools and dies maker in the world.

    Globalisation helps china to provide employment for rural migrants and speed up urbanization.It’s not about ‘tech transfer’. Those were the days and those jobs will be taken over by robots.

    “Japan submitted the dispute to ICJ to resolve. China refused to go to court. That dispute has been splashing all over American news.

    Evil China !!…”
    Hell, I still can’t find my butt; I laughed too hard !!

    • Replies: @DB Cooper
    , @Rdm
    , @Rdm
  128. DB Cooper says:

    You are right on the money. There is no tech transfer. Only tech sanctions.

  129. Rdm says:

    I hope United States will ban all Chinese students here to completely ban Tech Transfer.

    • Replies: @Astuteobservor II
  130. Rdm says:

    No country on earth easily receives technological prowess from another country.

    The then Empire United Kingdom used to block all technological skills especially to the US. It’s the people that transfer the technology between countries. US acquire most of its technological skills by granting its citizenship. General relative theory won’t be alive without Jews Refugee. Rocket science would be dead without allowing German scientist. Reverse engineering is what every country try to achieve from 1st world country. Even the US in its infant stage, had to steal from the UK.

    In that sense, in 21st century, China stood out the best because it can reverse engineer and take advantage of the iron scraps left.

    Are you expecting technology transfer like your mom feeding food into your mouth?

    If you completely want to start from scratch (Without any technological transfer), all higher education in the US should ban Chinese students. That way you can have your say “No technological transfer”.

    Come to think of it, a few stars stood out
    1. CN Yang
    2. Andrew Yao
    3. Shi Yigong

    Those are a few scientists that you can assume “Technological Transfer”.

    In 21st century, technological transfer means “Brain drain”.

    If Japan, already established technologically advanced country in East Asia, had to quickly catch up what the West has invented by sending lots of Japanese students to the West,

    and You said there’s “No Technological Transfer” from the West to China, I don’t know if your butt was hard from laughing, but mine was.

    • Replies: @Astuteobservor II
  131. @Rdm

    by this point, the ban would not hurt the chinese at all. would actually stop the brain drain affect on the chinese students for the benefit of usa.

    • Replies: @Rdm
  132. @Rdm

    but that wasn’t what you guys were commenting about though. you guys were talking about tech transfer 🙂 not brain drain, and not even the normal definition of brain drain. he actually refuted your claims pretty well 🙂 despite the raw language used.

  133. Lin says:

    “No country on earth easily receives technological prowess from another country. ..”
    “You said there’s “No Technological Transfer” from the West to China, I don’t know if your butt was hard from laughing, but mine was…”
    “Without technological transfer from the West (although that comes with a price), China will not make it to so-called economic miracle…”
    Look,kid, I know where my butt is though I laughed it off.
    Look, you basically contradicted youself and didn’t even care to patch you b**t hole. Your juvenile pride hurted, isn’t it?
    First of all, I didn’t say tech transfer from the west didn’t pay a role in China; I just said it was over-exaggerated.
    If accepting student from country A means tech transfer to country A, arab countries and Hindustan should have already become tech superpower. The last time I checked, China’s Qinghua U has overtaken M.I.T. in engineering research output per year. Why don’t you find similarly progress made by universities in developing Asia , Africa or latin America ?
    However, being said, I must thank you for creating delusion that actually benefit china my fatherland by hiding her strength, regardless you are Japanese, yanks, euro or hindus.
    YES, thank You. (Don’t worry, your hurting bottom is still there..). Rhetorics at forum like UNZ’s is just mental relief to people like you. YES, Yes, don’t worry, China wouldn’t make it. OOp !!, how about yankie military first strike against China? Tell you one thing: the yanks would have done it a long time ago if china is just like another 3rd world nation.

    Finally, what happens to your EVIL china claim of disregarding some ‘international court’, eh?

  134. Rdm says:
    @Astuteobservor II

    Since you’re legitimate, here’s my take on Technological advancement in China.

    Tech transfer could either be direct or indirect. Even if outsourcing is common, there always will be a choking point where senior management makes sure no technological prowess was passed down easily. This is where reverse engineering skills become a critical turning point for the country.

    US inherited lots of technological skills, industrial skills from Europe, especially England. Did England easily transfer tech to the US? Since cotton production in England was far more superior than handmade machine in America in 18th century, England specifically ban any textile employees traveling to America, exporting Textile machines to America. They even passed the law for that. It’s a choking point.

    The only thing that can break those choking points is “brain”.

    But even with all those choking points and ban, we all can say America inherited lots of its brains from all over the world, especially from Europe in 18th, 19th century.

    That’s what I was pointing out.

    Does US specifically ban, target any tech transfer to China? Of course, it does.

    But still, there’s a trickling effect we can see in China these days. China might not exactly receive its tech from the West, but it’s trying to attract from all over the world now.

    That’s what I’m getting at, and Lin was talking about his butt and continued to do so.

    • Replies: @Astuteobservor II
    , @Lin
  135. @Rdm

    there’s a trickling effect we can see in China these days. China might not exactly receive its tech from the West, but it’s trying to attract from all over the world now.

    this is very, very different than tech transfer.

  136. Anonymous • Disclaimer says:
    @Sergey Krieger

    China got a lot from the USSR, Japan, Korea, Germany, and America.

    And I don’t know what yo mean by a massive transfer of manufacturing capacity. The manufacturing capacity was out there looking to move to a lower cost place to maximize profits from Western countries.

    China out competed other countries for a lot of reasons. Consider that Mexican and Chinese wages are on par with each other, yet Mexico couldn’t attract the manufacturing capacity even though they are so close to the border.

  137. Anonymous • Disclaimer says:

    China runs a huge trade deficit with worthless fiat money which is how the game is designed. It is not out of kindness.

  138. Lin says:

    “Tech transfer could either be direct or indirect. Even if outsourcing is common, there always will be a choking point where senior management makes sure no technological prowess was passed down easily. This is where reverse engineering skills become a critical turning point for the country….”
    What you mean by ‘indirect’ tech transfer are easily observed/extracted or publicly available infos. Look, most of such stuff are available in the info-rich world we live in. And the tough core tech of the stuffs china is still behind require 10s if not 100s of billions of \$ to make happened and exactly is what china couldn’t afford until a few years ago; good examples are HBP turbofan engines and lithographic machines for micro-electronics(severe sanctioned items on china. China is finishing on the 5 nm version now). ‘Reversed engineering’ or not is an irrelevant tag and the core tough part is massive basic research, training,development and testing. The present modern world is different from the era when taking a look at the schematics of an internal combustion engine will understand it’s working.
    A good example is that the Russian invented the tokamak fusion device; the ‘donut’ or ‘toroidal’ shape is a free give away by the Russians who have never called it ‘tech’ transfer. And it’s taking 10s of billion \$ of major R&D nations to make it reality.

    Why don’t you propose to ban such ‘indirect’ tech transfer to ‘choke’ china? Like giving up GE/P&W share of the Chinese market? My impression is you know little of modern tech development and just jumped into your juvenile conclusion

  139. @Brabantian

    Do you have any data to support your suggestions? Or are you depending on data-free allegations? Or are you just making stuff up?

  140. @Seamus Padraig

    However we characterize it, it’s a fascinating experiment and we’re being denied the ability to study and evaluate it for ourselves.

  141. @interesting

    Like the CIA and the World Bank cook the books…

  142. @Agent76

    I really enjoy Peter Lee’s commentaries!

  143. @Ben Banned

    “China still has an immense number of poor people who will die poor with lives spent in shitty factories with worse outcomes in rural areas.”?

    Hardly. Urban poverty was eliminated in 2016 and rural poverty will be gone by December, 2020. Besides, 90% of ‘poor’ Chinese own their homes–debt free.

  144. @Daniel Chieh

    Indeed I do suspect that the centralized management of China will do something different. They’ll make it to their xiaokang society threshold which, in 2011 their Prime Minister described as ‘a society in which no one is poor and everyone receives an education, has paid employment, more than enough food and clothing, access to medical services, old-age support, a home and a comfortable life’.

    They’re then scheduled to spend the next 29 years consolidating that gain–handling ineqality, the environment, rule of law and public morality–before launching into their datong society transition on the anniversary of independence. No society has attempted that before, so here are some quotes to give you a flavor of it:


    In the early twentieth century, the great Chinese thinker and reformer Kang Youwei wrote a book entitled Datong shu (Book on the Great Community) in which he put forward an original and radical interpretation of “datong,” drawing mainly on both Liyun and another of the Confucian classics—the Gongyang Commentary to the Spring and Autumn Annals, which propounds a theory of progress in human history from the Age of Disorder to the Age of Ascending Peace and finally to the Age of Universal Peace.
    This chapter will analyze the concept of “datong” in Liyun and in Kang’s Datong shu, and suggest that the concept is an expression of the idea of the common good in traditional Chinese social and political philosophy. It will also examine and reflect on Kang’s Datong shu and the elements of Confucianism, Buddhism, liberal- ism, utilitarianism, utopianism and socialism/communism that can be found in the book. It will also show that the ideology currently propounded by the Chinese Communist Party, including the ideas of the “preliminary stage of socialism” and the “xiaokang society,” may be better understood in light of the concept of “datong” in Chinese philosophy.

    The passage thus portrays two forms of society, that of Grand Unity (datong) and that of Lesser Prosperity (xiaokang). Both are good, with datong being the greater good or the best and xiaokang being the lesser good or the second best. Datong is where the Great Way prevails. It is usually interpreted to refer to a Golden Age in prehistoric times (such as the periods of the rulers Yao and Shun), as the dominant Confucian view of history or prehistory is that the ideal society existed in an imme- morial time and has subsequently declined.
    5 The Concept of “Datong” in Chinese Philosophy as an Expression… 87
    The first sentence of Confucius’ reply to Yen Yen refers to the Three Dynasties in ancient Chinese history—Xia, Shang and Zhou—preceded by the rulers Yao and Shun. The “illustrious men of the Three Dynasties” Confucius refers to in the first paragraph actually includes the “six rulers” (Emperor Yu, Kings Tang, Wen, Wu, and Cheng and the Duke of Chou) referred to in the second paragraph in his discus- sion of xiaokang. Thus Confucius’ opening sentence implies that society never con- formed to the criteria of either datong or xiaokang—even the lesser ideal of xiaokang remained unrealized in his time.

    It may be seen from the passage’s detailed description of xiaokang society that it actually practices the basic teachings of Confucianism. For example, Confucianism emphasizes the “five cardinal relationships”—those between father and son, ruler and subject, husband and wife, elder brother and younger brother, friend and friend—as the foundation of ethics. The li (rites, rituals, and norms of propriety) is also stressed by Confucianism as the indispensable basis for social order and social life. In the passage on xiaokang, it is said that “Ritual and righteousness are used to regulate the relationship between ruler and subject, to insure affection between father and son, peace between brothers, and harmony between husband and wife, to set up social institutions, … all six rulers were constantly attentive to ritual.” This reflects the centrality of the li and of the cardinal human relationships in the xiao- kang society. Other Confucian virtues, such as righteousness, faithfulness, human- ity (benevolence) and humility, are also practiced in xiaokang society: “all six rulers were constantly attentive to ritual, made manifest their righteousness and acted in complete faith. They exposed error, made humanity their law and humility their practice.”

    If Confucian teachings are already practiced in the xiaokang society, why is it not the ideal society? One sentence from the passage strikes the reader: “Therefore intrigue and plotting come about and men take up arms.” Thus establishment of the li, of social institutions and the obligations associated with the cardinal human rela- tionships, cannot ensure social harmony and peaceful co-existence among human beings. There will inevitably be competition, struggles, and even wars among them. The root of the problem is identified at the beginning of the passage on xiaokang: “the world is the possession of private families. Each regards as parents only his own parents, as sons only his own sons; goods and labor are employed for selfish ends.” These circumstances contrast sharply with those in the datong society: “the world was shared by all alike. The worthy and the able were promoted to office and men practiced good faith and lived in affection. Therefore they did not regard as parents only their own parents, or as sons only their own sons.”

    Dr. Sun Yat-sen, founder of the Republic of China established in 1912, was well-known for his high regard for the Liyun datong passage and even developed the Three People’s Principles1—the political doctrine he developed as the ideological foundation of the Republic of China—to bring about datong (Zhang 1988, pp. 6). Upon his death the phrase “tianxia weigong” (“the world is shared by all alike,” a phrase taken from the Liyun datong passage), which he loved when he was alive, was inscribed on his tomb.

    Before addressing the central thesis of Datong shu, two important influences must be considered. They are the Confucian doctrine of ren (benevolence or love), and the theory of history elaborated in He Xiu’s work (written during the Latter Han dynasty) on the Gongyang Commentary to the Spring and Autumn Annals.
    Ren is one of the most important virtues or values preached by Confucianism. It may be translated as benevolence or love, and refers to feelings of humanity, sym- pathy, and empathy among human beings. The significance of ren as an ultimate moral principle is demonstrated by the following passage from Confucius’ Analects (Confucius 1992, book XV, section 9): “For Gentlemen of purpose and men of benevolence (ren) while it is inconceivable that they should seek to stay alive at the expense of benevolence, it may happen that they have to accept death in order to have benevolence accomplished.” As pointed out by Chan Wing-tsit, a leading authority on Chinese philosophy:
    This love [ren] is universal in nature, but there must be distinctions, that is, an order or gradation in application, beginning with the love for one’s parents. … Jen [ren] is extended to include not only all human beings but the universe in its totality, man and the universe thus forming one body. … Jen is not merely an attitude or consciousness but an active and dynamic relationship between men and all things. … Jen is the foundation of all goodness, the ‘mind of man,’ and the source of everything produced in the universe. … As such, jen is both ethical and metaphysical (Chan 1967, pp. 356).

    Kang emphasized that ren is the compassionate mind or “the mind that cannot bear to see the suffering of others” (burenren zhixin).
    According to Mencius,
    Whoever is devoid of the heart of compassion is not human, whoever is devoid of the heart of shame is not human, whoever is devoid of the heart of courtesy and modesty is not human, and whoever is devoid of the heart of right and wrong is not human. The heart of compassion is the germ of benevolence [ren]; the heart of shame, of dutifulness; the heart of courtesy and modesty, of observance of the rites; the heart of right and wrong, of wis- dom. Man has these four germs just as he has four limbs (Mencius 1970, book II, part A, sec. 6).
    This passage suggests that ren is one of four basic virtues that define humanity.

    He Xiu derived from Chunqiu Gongyang an interpretation of Chinese history consisting of “Three Ages”: the Age of Disorder (shuailuan shi), followed by the Age of Ascending Peace (shengping shi, also translated as Age of Increasing Peace-and-Equality), followed by the Age of Universal Peace (taiping shi, also translated as Age of Complete Peace-and-Equality).

    In Mengzi wei (Esoteric Meanings of Mencius), he writes:
    Confucius instituted the scheme of three stages. In the Age of Disorder jen [ren] cannot be extended far and therefore people are merely affectionate to their parents. In the Age of Approaching Peace, jen is extended to one’s own kind and therefore people are humane to all people. In the Age of Universal Peace [Great Unity or datong], all creatures form a unity and therefore people love all creatures as well. There is distinction and graduation in jen because there are stages in historical progress (qtd. in Chan 1967, pp. 367).

    The following passage from Kang’s Liyun zhu (Commentary on Liyun), which may certainly be considered radical from the traditional Confucian perspective, anticipates our discussion of Kang’s Datong shu:
    Now to have states, families, and selves is to allow each individual to maintain a sphere of selfishness. This infracts utterly the Universal Principle (gongli) and impedes progress. …
    Therefore, not only states should be abolished, so that there would be no more struggle between the strong and the weak; families should also be done away with, so that there would no longer be inequality of love and affection [among men]; and, finally, selfishness itself should be banished, so that goods and services would not be used for private ends. … The only [true way] is sharing the world in common by all (tienxia weigong) … To share in common is to treat each and every one alike. There should be no distinction between high and low, no discrepancy between rich and poor, no segregation of human races, no inequal- ity between sexes. … All should be educated and supported with the common property; none should depend on private possession. … This is the way of the Great Community [datong] which prevailed in the Age of Universal Peace (qtd. in Hsiao 1975, pp. 499).

    Kang then refers to the theory of the “Three Ages” —which he attributes to Confucius himself—as a solution to this problem. Social institutions can and will evolve in the course of time so as to achieve rising levels of development and perfec- tion. “[F]ollowing [the Age of] Disorder, [the world] will change to [the Ages, first] of Increasing Peace-and-Equality, [and finally], of Complete Peace-and-Equality; following the Age of Little Peace-and-Happiness, [the world] will advance to [the Age of] One World” (D72). Kang believed that he lived in the Age of Disorder, but he was able to work out how the “Way of One World of Complete Peace-and- Equality” was to be realized (D72).

    Kang identifies, analyzes, and further subdivides six kinds of suffering in six separate chapters of Part I of Datong shu. The six categories are “sufferings from living,” “sufferings from natural calamities,” “sufferings from the accidents of human life,” “sufferings from government,” “sufferings from human feelings,” and “sufferings from those things which men most esteem” (D73-4). Kang believed that most suf- ferings were ultimately attributable to the existence of nine boundaries (jie, alterna- tively translated as “distinctions”): (1) nation-boundaries (“division by territorial frontiers and by tribes”); (2) class-boundaries (“division by noble and base, by pure and impure”); (3) race-boundaries (“division by yellow, white, brown and black [skin types]”); (4) sex-boundaries (“division by male and female”); (5) family- boundaries (“the private relationships of father and son, husband and wife, elder and
    5 The Concept of “Datong” in Chinese Philosophy as an Expression… 93
    younger brother”); (6) occupation-boundaries (“the private ownership of agriculture, industry, and commerce”); (7) disorder-boundaries (“the existence of unequal, unthorough, dissimilar, and unjust laws”); (8) kind-boundaries (“the existence of a separation between man, and the birds, beasts, insects, and fish”); and (9) suffering boundaries (“[this means], by suffering, giving rise to suffering”) (D74–5).
    Kang states that “[t]he remedy for suffering lies, therefore, in abolishing these nine boundaries” (D75).

    Although several crucial components of Kang’s datong world are reminiscent of the communist society postulated by Karl Marx as the eventual goal of historical development and social evolution, there are fundamental differences between them in terms of their basic premises and the dynamics of social evolution each envisaged (Thompson 1967). Marx emphasized people’s selfish material or economic interests as members of particular social classes; Kang believed that all human beings have a compassionate mind, and caring about others is part of the essence of being human. Marx considered class division to be the fundamental division in society; Kang identified class division as merely one of the nine “boundaries” which give rise to struggles, conflicts, and suffering, and in his thought other divisions such as those between the sexes, racial or ethnic groups, or between nation-states are equally if not more important. Marx believed that class struggles and violent revolutions are necessary and inevitable for the purpose of realizing communism; Kang suggested that the evolution towards the datong world of the Age of Complete Peace-and- Equality is a natural, gradual, and spontaneous process in which ren will be prac- ticed to increasing degrees. It is also a process through which rising levels of culture or civilization, education, moral cultivation, awareness, and enlightenment among human beings in society will be achieved.7

    To what extent, if any, does the ancient Chinese concept of datong and Kang’s adaptation of it to the modern world provide a useful contribution to our thinking about the common good? I would suggest a positive answer to this question. The Chinese character for “tong” in datong literally means “common” or “in common,” while the Chinese character for “da” literally means “great”. The key phrase “tianxia weigong” in the celebrated datong passage in the Book of Rites may be translated as “all under Heaven is held in common” or “all under Heaven is publicly held”. The concept of datong is thus a concept that was intended by the ancient Chinese to embody a society whose organization is in accordance with the common good, or a society in which all members enjoy the good life. As pointed out above, all mem- bers of society share in the enjoyment of the benefits of social cooperation in the datong society. The welfare or well-being of all, including those who are weak, vulnerable, or unable to care for themselves, is well taken care of. Everyone is devoted to serving the common good instead of seeking primarily to benefit oneself or one’s family members. “They did not regard as parents only their own parents, or as sons only their own sons” (qtd. in De Bary et al. 1960, pp. 175). Thus ren, benevo- lence, compassion, care, or love for fellow human beings is extended to all. But this datong concept was developed more than two and a half millennia ago, and in the datong passage of the Book of Rites it was only used to refer to a more perfect soci- ety in the distant past which was no longer realizable—for only xiaokang was real- izable in the contemporary world. Is datong a credible vision of the common good in the twenty first-century world?

    Although this has never been officially recognized, there is in fact a surprising degree of convergence between some important ingredients of Kang Youwei’s datong thought and the official ideology currently propagated by the Chinese Communist Party. According to this ideology, the Marxist vision of the communist society is still the highest ideal pursued by the Party and the Chinese people. However, this ideal can only be realized after socialist society has reached a high level of development. “The development and perfection of socialism is a long historical process.”10 China is, and will remain for a long time, in the “preliminary stage of socialism,” because China, as an “economically and culturally backward” nation, needs to undergo “socialist modernization.”11 The theory of the preliminary stage of socialism implies that full socialism cannot be practiced yet, and China may legitimately borrow capitalist techniques from the West. Not all means of pro- duction will be socialized and subject to public ownership, and there will still be economic inequality among the Chinese people. The idea that the ideals of social- ism and communism will be realized, and will only be realized, in the course of a long process of historical development and social evolution thus converges with Kang’s idea of historical progress and his vision of the datong world in which socialist or communist principles will be applicable in economic life.

    The official view of the current level of economic development in Chinese society is that it has just reached the xiaokang level. It is hoped that by the centenary of the founding of the Chinese Communist Party (2021), China will have reached a “higher level of xiaokang society,” and by the centenary of the establishment of the People’s Republic of China (2049), it will have reached the level of a middle-level developed country and will have “basically completed its modernization”.12 Thus the term xiaokang, which dates back more than two millennia ago to Liyun, is still being used today to refer to the second-best level of development. The concept of “harmonious society” advocated in recent years by the Chinese Communist Party also draws on traditional Chinese thought, particularly the Confucian vision of social harmony and amicable social relationships.
    In the final analysis, the datong philosophy in Liyun and in Datong shu speaks not only to the Chinese people but to the whole of humankind. It is a philosophy that is universalist in nature rather than particularistic and dependent on a particular culture or religion. As a philosophy of the common good, it is a valuable contri- bution to the common heritage of mankind. Though ancient in origin, it still speaks to the needs, circumstances, and challenges faced by the contemporary world. Though Chinese in origin, datong is capable, as Kang Youwei has demonstrated,of entering into dialogue with the utilitarian, socialist, and liberal traditions of the West. It is to be hoped that datong thinking will continue to develop and contribute to the Chinese social and political philosophy of the twenty first century.

    The Concept of “Datong” in Chinese Philosophy as an Expression of the Idea of the Common Good
    Albert H.Y. Chen

  145. @juergenwahl

    The above chart does not indicate that China’s private debt to GDP over 200%

  146. Very persuasive piece by Mr. Godfree Roberts! I am a friend of his. Very few outsiders can be so dedicatedly and so deeply analyzing China issues. His writing is a strong voice to oppose false intepretation on China from Western economists, politicians and media.

    Chinese family debts are not necessarily low but the redemption rate is unusually high. That’s why goverments don’t need to worry about a subprime financial crisis happening like the one taking place in USA in 2008 that spurred out of control from individual overspending. The fact that China’s GDP is huge, its economic growth is robust and will continue to be for the foreseable future illustrates that it’s pointless to just look at the absolute amount of debt Chinese government owns without examining what’s lying behind to support it and combining individual segmental analysis in the specific Chinese socio, economic and political context.

    Mr. Godfree is able to do independent China research in the right way with convincing examples he spent years learning and gathering in the study of China. He can provide in-depth perspectives on China that are definitely worth reading and his writing is such a comprehensive and strong embodiment of years of his strenuous efforts. With China’s status rising in the world, everyone should learn about this country and never be fooled by the poor lies and decpetion out there.

  147. Anonymous [AKA "Jay H. Burch"] says:

    [“Sockpuppetry” — Using multiple handles to hide your identity and pretend you are numerous separate individuals — is prohibited here.]

    Yes. You are making a strong point, Mr. Roberts. The debt problem in China is clearly exaggerated by Western media.

    • Replies: @godfree Roberts
  148. @another fred

    Professor Pettis has been saying that for 12 years. Despite being an economist and living in China, he has no understanding of its economy whatever.

  149. @Anon

    What color are your eyes? When did you arrive in Xian? How do you discern arrival time from eye color?

  150. @Seamus Padraig

    Since 1950, China has built 600 cities with populations over a million and a few have given rise to stories of ‘ghost towns’. But real ghost towns are communities that have died, while China’s empty towns are signs of approaching birth, not death, as author Wade Shepard, who has visited most of them, attests, “I’ve been chasing reports of deserted towns around China and have yet to find one. Over and over, I would read articles in the international press claiming that China is building towns that are never inhabited–only to find something very different upon arrival. The New South China Mall had a lot of empty shops but, by the time I arrived, it turned out to be a thriving entertainment center; Dantu showed me that an initially stagnant new town can become populated and come alive and I found that Xinyang’s new district, called a ‘ghost town’ since 2010, hasn’t even been built yet”.


    In 2010, all of these cities had under 50,000 population
    1. Ordos
    2. Dantu
    3. Pudong
    4. Wujin
    5. Zhengdong
    6. ZhuJiang
    7. Zhengzhou
    8. TianDucheng
    9. Lanzhou

    Today they’re 90% filled.

    Xiangluowan is full

    Lanzhou is full,

    Zhengzhou is full
    Zhujiang is full
    Zhengdong is full

    Dantu is full
    Wujin is full

    Pudong is obviously full
    Ordos population went from 40,000 —> 2 million

    The fact of the matter is that Ordos is a prefecture-level city that has a population in excess of two million.

    Wade Shepherd Video interview:

  151. @Anonymous

    Sockpuppetry? Come, come. I’ve been writing about China for a decade and hundreds of thousands of Chinese have read my stuff. It’s hardly surprising that one would comment here.

  152. map says:

    The West became successful by producing domestically and selling domestically. The Chinese can do the same.

  153. Borat says:

    Economics is economics. China isn’t running some secret system, where what everyone knows about their economy is wrong. Only to economically illiterate people is it ‘wrong’, because they weren’t right to begin with. Some elements in this article are correct, like how Chinese debt is owned by state owned institutions, thus they have control over when to call debt in. In the US, a US bank would demand payment once it reaches maturity etc, thus causing default, whereas in China, the state will order the state lender to hold off on demanding repayments from the state borrower. Hence China can control / minimise defaults at the very least. The housing crash in the US for example, would play out differently in China. There are other nuances. For example this article refers to infrastructure spending, almost implying this type of economy is ‘better’. China is an infrastructure led economy. But as a result this restricts their consumer economy. An infrastructure led economy is excellent at being a sling shot for rapid growth (as other Asian Tiger economies also showed), but it is entirely unsustainable in the long-run, and an eventual transition to a more consumer led economy is required (this is what people refer to when they refer to ‘hard landing’ and all that). Which to do so requires less infrastructure spending, and more social spending. At present China has to import demand from overseas, via their trade surplus. China has not been transitioning to a consumer economy, instead still maintaining their infrastructure model (it provides jobs after-all to 100’s of millions). And now OBOR comes along as a way of exporting their infrastructure led model (i.e. giving loans to other nations, then making bids to build their infrastructure, with Chinese labour), along with allowing for the importation of more demand. China wants to continue running this higher growth model for as long as it will be allowed. Any talk of it transitioning to a consumer economy is simply not true. You hear talk of the private sector in China picking up slack and doing so, but it will never be a be a consumer led economy until its trade surplus turns into a deficit, they provide more social spending, and when households start taking in much more proportionally as a share of national income. Even Japan isn’t really a consumer led economy, with the Japanese government talking about (and trying to find ways) to boost consumption (but failing). Now with bad demographics, Japan is reliant on Abeism, which is based entirely on a low Yen, exports (importing demand) and infrastructure spending. Every model has strengths and weaknesses also. For example infrastructure led economies aren’t highly efficient in the long-run. Mass misallocations occur. Debt grows faster. This is why China needs to control the lending / borrowing to such a great extent. And eventually you reach a point of marginal return (over the long-run). Like I said, economic theory still applies. Even in tightly controlled China. And they all have flaws (i.e. like how consumer led economies need perpetual mass immigration (but it needs to be quality immigration in reality – which many governments seem to have failed to realise)) etc.

  154. Well it’s 2021, some years after this article was written, and look what has happened.

    America has flushed itself down into an economic and viral shithole while China’s GDP continues to grow, exceeding the USA for almost 5 years already in PPP terms.

    America has fucked itself under Trump so badly, that even with Biden, it won’t find its way back. All those imaginary criticisms by China-haters of China’s debt and its so-called problems really looks like pathetic wishful thinking now, doesn’t it?

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