Thursday, June 30, 2005

The Chinese Conundrum

Today I was pleasantly surprised to read this article. I think a lot about the Chinese as I consider them our greatest threat in the 21st century - a physical and economic threat. News like this makes me happier than anything that any politician has done for me in a long time.

We hear a lot about how the Chinese are building up their military and how they are consuming so much oil and other raw materials. This has partially led to us paying more at the pump and for other goods and services. The laws of economics will apply forever - higher demand with steady supply = higher price.

Their massive resource consumption aside, I have never been given a serious reason to fear China. Sure, the nuclear threat is always there, but if they nuke us, who will they build things for? The United States is by far their largest customer. What if China attacks Taiwan? Wouldn't the US cut them off at the knees as far as trade goes? I fear the "madman" theory most, which would be if the leadership of China just attacked Taiwan and didn't care about the consequences for anyone. As long as dictators have the army on their side who cares about anyone else as long as the dictator has a good supply of quality cigars, booze and women.

On another tack, their pegging of the Yuan will cost them (and us) eventually - you just can't do it forever. Greenspan says:
Pegging is unsustainable, Greenspan explained, because it requires China to buy huge amounts of dollars on the foreign-exchange market. These are then invested mostly in US Treasuries or other dollar-denominated assets. China has been buying an average $600 million a day to support the dollar. The dollar inflow includes foreign investment - a huge $52.7 billion last year. In the past 12 months, China has added $100 billion to its foreign-exchange reserves, bringing the June total to a huge $346.5 billion, exceeded only by Japan's $526 billion in international reserves.
It seems to me that capitalism is starting to not win over there yet, but at least put up a fight. China is a totally corrupt dictatorship. You can call it a Communist state if you want. In the end, it is just a bunch of guys ruling the populus with an iron fist. Some people are becoming fabulously wealthy over there and the little people want a piece - the American dream, so to say. They are also tired of having their property confiscated. This is the wild card. If the dictatorship can't keep the people under control there is no way they will ever be the global force that we are all supposed to fear. I like paying $20 for a pair of tennis shoes, but will pay $40 if it means the Chinese people can live free lives.

But back to the article about the riot. There is a lot of information in it that needs to be de-coded. I am surprised that news about this riot got out - that means it must have been BIG and that many Chinese must be getting more internet/satellite savvy.

The official Xinhua news agency, in a rare report on a local disturbance, blamed Sunday's riot in Chizhou in dirt-poor eastern Anhui province on a few criminals who led the "unwitting masses" astray.
I like how the official agency says the masses could not possibly be pissed about their plight.

The violence was the latest in a series of protests which the Communist Party, in power since 1949, fears could spin out of control and become a channel for anger over corruption and a growing gap between rich and poor.
Like I said, everyone wants a little piece - their piece of the dream.

Armed police tried to quell the disturbance but were driven back by a hail of rocks and lit firecrackers, he said.
It is serious when the folks start attacking the cops. I highly doubt that the people threw firecrackers at the armed forces as that just sounds dumb. But the point sticks. There was actually an armed uprising against the establishment, for whatever reason.

The crowd, now numbering as many as 10,000, also flipped three parked police cars and set them ablaze.
By anyone's count, this is a very large riot.

The riot closely echoed one that erupted in Chongqing in western China last October when a quarrel between residents, in which one man passed himself off as an official, enraged bystanders with the attempted abuse of privilege. Thousands took to the streets, burning police cars and looting government buildings. Protests have become increasingly common in China, fueled by corruption and the widening wealth gap, but authorities are keen to quickly quash dissent and preserve stability. There were more than 58,000 protests, many of them over land rights disputes, across the country in 2003, a Communist Party-backed magazine, Outlook, has reported. This month, villagers in northern Hebei province protesting to keep their land were attacked by a group of armed hired toughs. Six farmers were killed and 48 injured in the ensuing battle.
Yep, people hate it when you take their stuff. Just look at the huge outcry against the Kelo decision here in the US. There are also huge racial divides in China which just add fuel to the anger fire. Good luck to the Chinese - I hope the people can take their country back and join the rest of the world with some basic freedoms.

No comments: