China to America: Shut up and listen

--
China isn't going to cold turkey its biggest addict, but that's one exchange that points out the US isn't the only captain on the bridge any more.

One world currency is not that far off.

One world currency is a terrible idea. The reason is that it doesn't allow for the economy to be tweaked by adjusting the value of the dollar to control economic growth. If we remove these failsafes by having one currency, it will fail without a doubt. Honestly, I don't trust money in any way since it's the representation of nothing really. The only things that have value are things that are finite, like gold and other precious metals and jewels.

Why did you title this thread "China to America: Shut Up and Listen."? Listen to what? The Americans are deliberately trying to devalue their currency against the yuan. That's why Snow was sacked. That's why Wen was snubbed in Washington. That's why every time an American official meets with a Chinese official, and they discuss trade, the American tells the Chinese "let your currency float."

uh huh

and China tells them to make the greenback rise. why should China take America's hit for them?

It's necessary, thus imminent.

On the contrary, a global currency is the failsafe! This tweeking of the currency is precisely what causes instability. Canada tweeks it one way in reactionto other nations, and so they tweek it another way in reaction to Canada. And so Canada must immediately readjust and retweek it anew, and on and on! This means that any international purchase is instable. I live in China, must buy many of our books from Europe, and use Canadian dollars in Canada. Meanwhile, local banks like to use US as the medium of exchange. There I have it, 4 currencies. Certainly a go-between is skimmingsome off the top at every exchange. And I can get screwed at any stage in the process of shifting between these four currencies. I have 100 US dollars right now in my home. The way things are going, I'd better get rid of it soon. but then the Canadian and Chinese currencies keep fluctuating, so I need to consider that when travelling to Canada or buying plane tickets, currency, etc. It's just a damn hassle. Also, when deciding how much to charge for courses, we must always consider not only the cost of books, but also the unpredictability of the exchange rate from Chinese to Euros. You have no idea how much of a pain in the donkey all this is.

A common currency would mean that the value of something would always be stableand thus predictable no matter where I go. If Canada experiences deflation let's say, fine, prices drop, but all in the same international currency. So I can compare prices directly in the same unit rather than always having to account for tweeks and counter-tweeks

That's just my own daily experience here as a Canadian in China who travels to Canada, works in China, must purchase texts from Europe and exchange in US dollars with some local businesses. That's the reality in real life. So as for a common world currency, bring it on!

Why?

Because the imbalances in the world economy threaten to derail China as well.

China's boom is in part due to the American consumer. Apart from its relationship with the US, China is a net importer of goods from around the world. Thus, China's manufacturing base is built, to a great extent, to service the United States.

China generates a $200 billion or so annual trade surplus with the US. That's not the problem. The problem is that those excess dollars are not being mopped up by the Central Bank of China. Instead, RMBs are printed in exchange for dollars, which has caused an explosion in the money supply in China. This has almost certainly lead to a housing bubble in Chinese real estate and overcapacity in certain areas of manufacturing. The Chinese central government believes this too, and are taking a number of steps to try to ease this overcapacity.

However, the money keeps flowing into China. Everybody and their dog thinks the yuan is undervalued. So overshore hot money, much of it coming from the Chinese themselves, have been flooding the country in anticipation of an upward revaluation. Andy Xie at Morgan Stanley estimates the hot money to total somewhere around $800 billion, an enormous amount.

But China doesn't want to because they are trying to absorb a massive amount of labour that, until recently, was flooding in from the countryside, and because the Chinese banking system is inefficient and corrupt, with perhaps 40% of the loans nonperforming, since loans are made for reasons that have as much, if not moreso to do with political connections and ambitions. Thus, the Chinese fear their financial system might not withstand such a revaluation since the system does not respond well to market forces. China has been granting greater access to foreign financial firms specifically to introduce more market discipline to the system.

Japan grew at a rate of 10% per year for a decade in the 1960s. Perhaps China can too. But it sure looks like there is a lot of risk in the global economy. The longer this delay occurs, the greater the risk in the system, and the greater the chance of a sharp dislocation.

its a duel within a morality play. its all about who can afford to wait the longest and from what I can see the US needs to see the river card more than China does.

sorry about the mixed metaphor

Man I'm such a stump with economics.

In a nutshell China's squirrelling away "its" incoming export dollars (money from stuff they sell to the States) to keep junk on the shelves at Walmart cheap and the US can't make them cut it out.

I know this is a bit off topic, but can anybody recommend any Economics 101 books?

You read enough Toro and you'll get your ECON 101
course credits.

The issue here is that the Yuan parallels every up
and down of the Dollar, rather than going up or down
in value on its own.

That's pegging the Yuan to the Dollar.

That's too simplistic that it can
be incorrect and misleading, but that's the best I can
do here.

And as far as a one-world currency, I don't see that
happening.

Because you need a one-world committee to set
the value of that one-world-coin. And how does it
do that ? By regulating the money supply.
Too much money chasing too few goods ? That gets
you Inflation, lowering its value.

And how does this committee control the money
supply ? It sets interest rates.

I don't like the idea of a powerful one-world-committee
setting the money supply.

And you'll have to have such a committee if you
go with a one-world-currency.

You already see this with the EURO and how
countries within the EU have lost some control
to this committee that determines the value of
their currency by setting interest rates which regulate
the total size of the money supply.

I like a little diversity.

Corruption was mentionned in this thread. That indeed is a major, MAJOR problem in current China. In fact, most foreing businesses in China don't make a profit not because the market isn't growing, but rather because they went in with too much trust. They got screwed by someone, somewhere. The successful companies are the ones with effective anti-curruptions structures in place, with "watchers" being watched. If you go into most big shops, including Walmart, you will be given a receipt by the cashier, and afterwards get it stamped by a checker at the door. he's not just checking whether you're a shoplifter, but also whether the cashier is doing her job (after all, could be collusion). If you send an e-mail to a police office, you always sent a CC to his superior and a third unrelated party to cover your ass and let him know every one else knows too. No Chinese does business with any otehr Chinese unless he's been recommended by a mutual trustworthy friend. That includes family members! One lady I know couldn't start up a business since there was no one she could trust enough to help her (including her own family members). School headmasters will lie outright to parents to get mony from them, parents trusting that the school is looking out for the best interests of the child. Often the headmaster will split some of that money with friends. Slowly teachers are loosing trust too, and they are the most trusted in Chinese traditional culture. People do not trust their government, government doesn't trust the people. Even restaurant receipts have a lottery on them so as to incite people in restaurants to ask for one for their scratch and win. If the restaurant gives a receipt, it will need to pay taxes on it. But if you don't ask for a receipt, they will simply deny and not pay their taxes. In some cases, if you ask for a receipt, they'll pretend they don't have one but could offer you a discount. Some hotels are run by mafia, and just like in the western mafia, some large businesses must pay a protection fee. And sure enough, government officers are for sale. Even banks deal illegally with independent money changers on the streets. Banquets for government officials sometimes amount to bribes. I unwittingly attended one once. If you add a little cash, government burocracy suddenly goes oh so smoothly. Yet if you stand your ground, be prepared to be patient. If you look wealthy, prices suddeenly jack up at the market. One watch for sale at 2000rmb dropped to 20 rmb when in negotiation. So I told the man in his face he was a crook. The thing was probably worth 5rmb, needless to say I didn't buy it. but hey, on the outside, the watch does appear to be worth 2000 rmb.

Even in marriage, one must cover his back. Women are very concerned in their potential mate's salary and savings, etc. Hmmmm.....

Materialism in this country makes Canada look angelic.

On a positive note, however, it would seem that things are improving. Some want to go back to the old Confusius schools and the government is turning a blind eye to taht so far. More and more people are talking about the so called crisis of faith in this country, and so people are waking up. After all, things can't get any worse, so they're getting better. Ah, there's a positive to everything, isn't there.

One common trait some of you might know about is guanxi (relations). There are two kinds, the bad and the good. As for the bad kind, it relates to nepotism, giving unearned contracts or promotions, etc. A scratch my back and I scratch your typr of thing. Then there is the good kind, which really is just a reaction to the bad. it involves a watch my back and I watch yours type of scenario. Some will not even trust family members anymore. One lady Couldn't start up a business since she had no guanxi. She couldn't even trust her own family members.

Like I said, things are improving as people awaken. But it will take time. And without a doubt, that could have a negative impact on the Chinese economy as such a reputation spreads. After all, if you don't trust the people of a nation, you fear doing business with them. then again, that might also be a contributing factor making Chinese aware they need to change. Even I have my own Guanxi. It's the only way to survive. It involves a core group of friends in which you can truly trust. I have about 9 in the whole of China. That's it. And one of them is a foreigner. I would trust no one else but those nine, for any important issue. Sad but true.

That's a great post Machjo.

That's quite an observation.

I'll juxtapose your China with Mexico.

They got mordida. Their word for bribery.
The elite and the authorities take a "bite" out of everybody.

It's ruined a country that would easily have the
potential of being a first world nation.

Oh you have no idea. In china, it's not just the elites. This death of virtue simply permeates every level of the society right down to the fruit vendor. It's absolutely amazing. to put things in perspective, of course, I still love China and still acknnowledge good people and genuine friends. It's just that we always need to watch our butts 100X more than in Canada. On all levels, not just government and the elites. Even choosing a wife would involve really knowing who she is. And I know some might be saying it's all the same in Canada. Not at all. In Canada, there are crooks. In China, everyone's a crook util proven otehrwise beyond reasonable doubt. Heck, that includes me.

That was a very interesting post. Don't take this the wrong way, but any chance you are exaggerating?

Canada is no diferent. Only our mordida is a "mordon" huge bites that start in the millions a pop. I doubt any countries little "mordidas" could equal the sum total of the Canadian "mordons".

I may be a little. And certainly there are always exceptions. So how about concrete examples.

Legally only authorised banks can convert currency. Yet I've seen people, money changers, standing in the bank's doorway, daily, same face, converting money outside. In the banks, lot's of burocracy, but not with these guys. But where do they get their money? Simple, they go to the bank! Now don't tell me the bank is that stupid to not know what's going on when the same guy stands at the door daily and exchanges money on a regular basis at the same bank!

Prostitution is illegal in China. Yet, if I, a single male, book into most hotels, right about sunset I'll start to hear a series of phone rignings right down the hall knowing it's about to hit my room within the next few calls. And sure enough, just like clockwork. offering a massage. Years ago, before I knew anything, I'd anser the phone and not understand. Later a knock on the door. The first time I was bloody confused. She was trying to get into my room while I had nothing but a towel around me. So I forced her to stay at the door while I got my dictionary, but when I'd gotten back to the door, she was gone. Only then did it dawn on me what was goin' on. Now I have to unplug my phone and use a DND sign every time. Or better yet, stay in a government hotel. But then, they are far and few between.

I've even gone so far as to ask a taxi driver to take me to a prostitution free hotel. Yet every time he'd take me to a brothel. I couln'd figure it out. Later I found out that the prostitution-free hotels are the government ones, and well known by taxi drivers. So what was goin' on? Well, later, as I started paying more attention, I'd noticed many taxis have stickers with phone numbers and addresses for local bath houses. Hmmmm.... Are they getting a cut?

On another occasion, i'd asked police officers for a local bath house sinse my appartment had no water (that's another story for a thread on Chinese ecology), so they showed me the way. Anyway, you'll like this story. Now this is after a few years of litle travelling, and in a new city where prostitution was more subtle. So anyway, I walk in and it seems all OK. I shower, put on my bath robe, walk to the back, and... Holy sh!t! Red light. So I step back in shock, recompose myself, and think, OK, none of my business, jut go to the room. Just as I'm about to regain my senses, one of the staff members OFFERS one to me! Holy ****. Second step back. So I walk to the room, p!ssed off (hey, I have mother and sister, this is just not on). I try to call 110 (police). inside line only. Sh!t. I go downstairs to use the front phone (I am really really p!ssed off). But then they say I can't use it, but I could use one of their personal cell phones (I want to nail these people!) By this time I'm not thinking rationally, so I take the phone and call a local net-friend! First time we'll meet face to face. Now using our own language, I tell him to call the police and send them over (I didn't call the police here since I'd have to use Chinese, and didn't want these pimps to hear me). So my friend says calm down, what's the problem. I says i'm in a brothel, and I'm pissed off, this is illegal and I want the police. He says calm down again, says he won't call the police but will be right there. So i wait while badmouthing the staff in my bathrobe. He arrives. Asks waht's the problem. They offered me a prostitute and I want to nail these pimps. So he explains, not a good idea, every bath house in town is the same, open secret (Oh now I know), and the police are paid. So if i called the police, small fine and they get back to business. As for me and my friend, well, a little trouble for us. I got the hint. So he gives them a word that I'm not happy (I think they'd figured that one out already though, and off I go to bed. yuck. So, next morning, 4 am, I'm up (couldn't sleep), go downstairs, shower, get out. Oh, still pissed off, this was more than a shock. First time I'd ever been OFFERED a woman so explicitley. At least in the hotels, she'd say massge, not sex, and I could turn down the massage and still pretend that maybe I'm jsut being paranoid about the sex part. Personal mind game to maintian my sanity, perhaps. But here there was no denying. They'd offered me sex. So I go to the cops, but language barrier, so I gave up and finally calmed down. But man i was pissed off for a day.

None of my friends will do business with anyone unless he's affiliated with his Guanxi.

I myself have sat in a banquet for police officers due to visa problems. The next day all my problems were solved. Yet only a day earlier, the problems seemed unsurmountable. Hmmm... He did not even really know these officers, and suddenly inviting them to a big expensive banquet?

I'd sat into a parents' meeting in which the school was lying to the parents. I was present to show a foreign face as I'd soon learnt, yet they'd conveniently cut out any question period. I.e, the school said what it wanted to say, and then that was the end. I suddenly had an appointment with some students right at that time. How convenient, good way to get me away from the parents. I know some Chinese and so could have told them alot.

I'd had to go see lawyers once, and the foreign affairs office on another occasion due to untruthful legal threats against me.

Fake 100 rmb notes abound. Every time I dig out 100, the shop must always check.

I've had numerous verbal agreements, but when it was time to sign on the dotted line, forget it. Hmmmm....

Copying copyrighted materials is the norm, even in schools.

Schools will hire Russians to teach English because they're white! No matter what credentials. Good marketing for students. I've witnessed it.

I'd been in a Buddhist restaurant which tried to jack up the price for me.

A pickpocket tried but failed to get my wallet on a bus.

I'd managed on numerous occasions to drop prices during bargaining 200 fold. Now if that's not dishonesty! On another occasion, people who thought I didn't understand Chinese would tell their friends that sinse I'm a foreigner I could pay more. Boy do they loose face when I then rip them apart in Chinese.

I've had one person try to rewrite my contract and switch it before signing! How low is that!

Women will regularly ask of foreigners' financial status!

And the list goes on. Some of this might happen in Canada, but I'd never had all of these, prostitution, bribery, police and taxi collusion, contract corruption, dishonering of contracts and dishonest attempts to change it or threaten staff, 20X jack ups in prices, bribing police, etc. etc. etc. all happening to me within a 4 year period? And then to hear similar or same stories or evenworse stories from all directions? And then observe how my Chinese friends themselves refuse to deal outside their guanxi? I'd never come across remotely similar in Canada to that extent, as a part of daily life! Incredible. Strangely enough, though, i still love China out of amazement at how some people have learnt to remain honest, strong and upright in character even in such a tough moral environment. Amazing.

If that's true, then at least in Canada, it's limited to the elites... so far. From my experiences in Canada, I could still trust the vendor, employer, school teacher, school principle, and police for the most part. I could also trust the restaurant waiter, and know that if I stay in a hotel, it's not a brothel. I have never witnessed bribery of government officials in Canada (not saying it doesn't happen, but at elast it's more subtle and so certainly more limited). If I go to the trian station, and someone offers help with luggage, he will tell me the price at the start if there is one and not try to scam me. Oh, yes, I forgot to mention the train station bit above. That's just another one on the list.

Look on the bright side, you will have many tales to tell your grandkids. Thanks for the stories and the time you put into them.

I think alot of what you say is people striving to make a decent living. When their economy gets better, so will they.

Not entirely true. The cost of living is also quite low, thus it's not as bad as some might think. One big problem, of course, is wealth redistributin, with much of it in the hands of a few. This means that there is a certain social pressure to keep up with the Jonse's. Some of the corrupt whom I've met are wealthy businessmen and government officials. So how do material conditions explain that? What about school headmasters scamming parents? They're not poor either, are they? It's not about wealth, it's about education. They're education system, I've seen it. It's extremely materialistic in nature.

Oh, but as for things getting better, I do agree, things are. More and more people are realizing the problem, more talk about it, more concern for their future. On the one hand, they are optimistic about their economic future. but there is an incresing concern for the price to pay in terms of their nation's dignity in the process. More Confucius schools are opening up, the government is increasingly turning a blind eye to them, perhaps realising they're needed. Buddhism, Taoism and Islam are making a strong come back. Christianity and the Baha'i Faith are booming too. People are thirsty for an ideal, for reality, as opposed to constant facades. So yes, they are definitely waking up. And that's a very positive sign.

any signs of the middle class carrying political weight yet?

This might sound strange comming from a Candian, but I actually disagree with China granting too much political freedom yet. And most educated Chinese are with me on this one. First off, democracy per se is nothing more than a system of govenrment, neither good or bad in its own right; government policies would decide that. Should China grant democracy, here are some of the problems which would certainly arise:

1. Ethnic tensions. With the Han forming 90% of the population, it's celar that government policy would overwhelmingly reflect their culture. At the moment, the government does make efforts to recognise minority rights to some extent at least, despite many Han complaining that it's not fair to grant minority groups such rights. So without a doubt, ethniccity would come to the fore with a vengeance, and China is not as homogenous as one might think, ethnically speaking.

2. With all the corruption in the nation right now, elected officials would simply mean more votes to buy and sell! This would probably increase, not decrease, the corruption we see now.

I would say forget political rights for now, and focus on other more basic human rights first, along with a major restructuring of their educational philosophy. Then, and only then, will they be ready for more political freedom. As for the middle class, they're all entwined in the system themselves, just like the rest of them. So effectively, while this might come as a shock to you in Canada, even those Chiense who disapprove of their government's policies will still support it for the sake of internal stability while simply criticising policy alone. In fact, criticism of government policy is on the rise in Chinese media, but of course criticism of the government itself is a big no no.

Any politician wasting his breath promoting democracy in China right now is sadly ill informed of the reality on the ground, and just how much support the current government has even if people don't like its policies.

Machjo, I would strongly suggest you submit some
of your observations to newspapers or magazines
for publication.

Highly interesting, and thought provoking.

Especially submit a one-pager to Newsweek in
America. They have this one page called MY TURN
and it is open to anyone.

I do believe China's slow (some may say "glacial")
approach to democracy is highly recommendable.

When I have a chance, thanks. And my pleasure. I'll just say that despite all it's problems, I've actually come to love China. What more can I say. Despite all the materialism, there still is an amazingly gentle streak in their collective personality, and I admire that alot.

One thing about publishing in foreign publications; it's often taken the wrong way. For instance, youll have the biggots suddenly saying all Chinese are like that. Fact of the matter is, foreign-born Chinese are usually as shocked about this stuff as anyone else. this has nothing to do with the Chinese per se as from what I've heard, Hong Kong, Macao and Taiwan don't even come close to what's going on the mainland. Then we'd have others blame it all on communism. Well, communism is not directly responsible for this, so certainly is indirectly. Communism is based on a particular materialist philosophy tought across the mainland. Needless to say, Taiwan, Hong Kong and Macao managed to escape such a system of education, with their systems having remained more confucianist in their approach.

Yet even blaming it on communism is not the whole truth. Communism itself is a western creation in more ways than one. Most obviously, marxist philosophy itself was born in the West. Beyond that, however, two Opium Wars followed by additional invasions and ransackings of China ( Let's face it, the Chinese really got a whippin' in the last 200 years!), the Chinese eventually had to look to whatever would rid them of colonialims once and for all. These wars created firtile ground for the fanatically anti-colonialist streak in Marxist philosophy to take hold of the hearts and minds of the Chinese people. Add to that that Christian involvement in the Opium Wars associated that Faith with colonialism and savagery. The pacifist streaks in Buddhism, Confucianism and Taoism were also partially blamed for China's defeat. This all contributed to a certain anti-religious stance in the nation reinforced by the already attractive marxism and it's opium of the people theories to free China once and for all. Strange as it might sound, the west contributed just as much as the Chiense themselves in creating many of the problems in current China.

So I suppose if I were to publish anything of the sort, i'd want it to be detailed enough so as to ensure it can't just be used as a sledge hammer by biggots to defame Chinese culture as just so "commie" and evil and stuff. Too many stupid people in this world to just write a simple article. Definitely if I should do this, I'd really want to choose my words carefully.