28 September 2021

Videos of the day -- a failed state

The Evergrande crisis in China deepens.  I've been saying for years that the common Western view of China is far wide of the mark and based on a Potemkin fa├žade, that China is a backward country under a tinpot gangster dictatorship and mired in the staggering corruption (beyond anything most Westerners can imagine, even under Trump) which inevitably comes with totalitarianism and with lack of democratic accountability or a free press to keep everyone at least somewhat honest -- and that its official growth figures and the overall picture we're given of its economy are unverifiable and probably mostly bullshit.  It was always likely that the whole thing would someday come crashing down, and it now looks like that might be starting to happen.

Democracy, transparency, accountability, and a free press are not luxuries.  They are essential to a modern society.  The fact that we and western Europe, Japan, India, Taiwan, etc have those things (however imperfect) makes our economies and societies far more robust and resilient -- which should, at least, somewhat limit the contagion of damage from the deepening mess in China.


Blogger Sixpence Notthewiser said...

Eye-opening, for sure. The myriad problems they have are not going away. But they'll keep trying to hide them. Just like Cheeto always tried to hide the corruption, ineptitude and plain fuckery that plagued his administration. I don't think it'll last too long though. Not sustainable. I wonder what will happen when the facade comes down?


28 September, 2021 06:03  
Blogger Shaw Kenawe said...

I heard about this on NPR yesterday, and was amazed at how the scandal reaches into all parts of the Chinese and world economy.

28 September, 2021 06:48  
Blogger Mike said...

I always hear how much US debt China holds but never looked it up. (2020 numbers from the Fed)

Japan $1,251.3 17.70%
Mainland China $1,072.3 15.17%
United Kingdom $440.6 6.23%
Ireland $318.1 4.50%
Luxembourg $287.7 4.07%
Brazil $258.3 3.65%
Switzerland $255.5 3.61%
Belgium $253.5 3.59%
Taiwan $235.4 3.33%
Hong Kong $224.1 3.17%

It's nowhere near as much as I thought. I'm sure if China decided to cash out it would affect us but I'm sure we could weather the storm.

28 September, 2021 10:06  
Blogger SickoRicko said...

Unfortunately, it won't affect just the Chinese or their government. This will have a global ripple effect.

28 September, 2021 10:15  
Blogger Infidel753 said...

Sixpence: Unfortunately the system they have makes it too easy to hide problems -- which is why nobody, probably not even the regime, really knows how bad things are or how much damage a "cascade" of bankruptcy and collapse could do.

Shaw: Unfortunately, China's economy has grown very large while still being run just like any other corrupt totalitarian rat hole. The bigger they are, the harder they fall, when they finally do.

Mike: I'm not sure whether or not they have the option of "cashing out" at an arbitrary time, unless you mean just dumping all the treasury bonds or whatever it is they're holding. But 15% is about what I would have expected. China just doesn't loom as large on the global economic scene as people have grown accustomed to imagining.

Ricko: Certainly it will -- hence the last paragraph of my post. The stock market has been crap this week, which is probably partly due to the emerging Evergrande crisis. But I suspect the damage would be containable. And ripple effects go both ways. China is probably a lot more worried about all this talk in Washington of not raising the US debt ceiling and thus defaulting on the debt (which they hold 15% of) than we should be about their problems.

As for US private-sector companies which would be ruined because they put too many eggs in the China basket instead of keeping operations here or in other democracies, screw them. Serves them right.

28 September, 2021 10:30  
Anonymous Art said...

I think you, OP, are largely correct.

A lack of free information and ownership/ participation limit buy-in by the common citizen. China got a significant amount of buy-in advancing out of a situation where the vast majority of Chinese were destitute rural peasants.

There was a further increase in participation when a modified form of capitalism was allowed.

Unfortunately the enthusiasm has waned as it has become increasingly clear that there would be no political reforms and the potential for prosperity is largely limited to a favored few and, of course, the families of high party officials. For most people real security and even moderate prosperity is an unreachable mirage.

This lack of enthusiasm is, perhaps, as far as discontent will go. The security state effectively eliminates the ability to organize, protest, or even know what the problems are.

The leadership has insulated themselves with loyal troops, police, informers. The dissatisfaction of the masses simply doesn't matter. The population has advanced just enough to know they have something to lose and the security state has all the cards.

Passive non-participation may be the best young people can manage. If enough do this it will eventually cut productivity and drag the system down. But it will take a lot of people and it will take a long time. Perhaps time enough for the Chinese leadership to find an effective response.

28 September, 2021 20:52  
Anonymous Norbert Weisner said...

Its astonishing how 6000 years of perhaps THE greatest and MOST magnificent culture the world has ever seen has been systematically totally destroyed by just 73 years of communism ! ! !.

29 September, 2021 01:52  
Blogger Infidel753 said...

Art: That does seem to be the situation of the average person. The only path of resistance available is dropping out, non-participation. There can probably never be an effective mass revolt.

Thing is, though, that that was equally true of the USSR, which was an equally effective totalitarian state which was equally good at making popular revolt impossible. In the end, it still collapsed.

Nortbert: Totalitarian ideologies are poison, and communism is very similar to a religion, the ultimate totalitarian ideology. This commentator who lived in China for fourteen years concluded that the reason China and Taiwan are so different is that communism destroyed China's real culture (as, I would argue, Christianity destroyed ours).

29 September, 2021 03:13  
Blogger yellowdoggranny said...

The Goddess approves of this message.

30 September, 2021 06:45  
Anonymous Anonymous said...

Xi is a lot worse. The "drip drip drip" was pretty quick with Tangerine Dream.

Leak even a bit in China, go to the gulag, if you're lucky. Authoritarianism's alleged efficiency is all an illusion.

01 October, 2021 06:02  
Blogger Infidel753 said...

Granny: I assume the Goddess doesn't approve of (rather patriarchal) megalomaniac dictators.

Anon: Exactly. They're efficient at nothing but crushing dissent and silencing criticism of their corruption.

01 October, 2021 09:04  

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