Quotulatiousness

March 3, 2010

Exact terminology aids understanding

Filed under: China, Economics, Technology — Tags: , , , — Nicholas @ 08:40

Apple Computer has been accused of exploiting child labour, indirectly, in factories that make iPods and iPhones. This is a serious charge, and the moral outrage it provokes is understandable. It evokes images of Victorian factories (those “satanic mills”), with children as young as seven or eight being starved and abused in horrific conditions.

However, the term “child labour” isn’t particularly exact, as Whit points out:

What I found most interesting was the “child” part — when I was 15 I would have slugged anyone who called me a child. During the summer of my 15th year, I was working in our metal stamping plant where the highest temperature reached 103 F (40 C). I had my first factory job when I was 14 turning wheels on a lathe. My Father never read child-labor laws, and thank God for that. It was an invaluable experience that I am sad to say I won’t be able to give to my son.

I can remember in 1998 visiting a factory for a major automotive supplier in Taiwan. There were 14 year old boys working on the lines making seat belt assemblies. I asked about it and found that they were students at the local technical school. They worked half a shift on the line and spent the rest of the day in class studying engineering. Today, 12 years later, they would be around 26 with degrees in mechanical engineering and over a decade of hands-on experience. I imagine some of them are running plants in China now.

So, there are the imagined children in a Dickensian hell, and there are teenagers (“young adults” in some situations) doing co-op terms in factories. Remember that our ideas about appropriate ages to leave school and work in factories or on farms have changed dramatically over the last two generations. Our grandparents wouldn’t have batted an eye at 14-year-olds working in factories. For most of their contemporaries, the concept of “teenage years” just didn’t have any particular cultural meaning. You were a child, you went to school, then you left school and got a job.

Even 60 years ago, however, they would have objected to under-12’s working away from home (but not on the family farm . . . farming families still looked at kids as extra working hands).

I understand that Apple is worried about its image, and I acknowledge that those eleven 15 year olds may not have wanted to be there. But there is a big difference between a 15 year old farm kid fibbing about his age to get a good factory job to help support his family and using 6 year old slave labor in an illegal fireworks factory in Sichuan. It would be nice if the amazingly flexible English language had a concise way of stating the difference. I think “under-aged labor” is more reflective of the reality of the situation.

It’s also not to excuse bad employers or condone involuntary labour (permitted in some developing countries).

February 8, 2010

Further skepticism warranted

Filed under: China, India, Military — Tags: , , — Nicholas @ 09:28

If, as I believe, China’s official economic statistics are not to be depended upon, even more skepticism is required whenever the topic of military spending is discussed:

In Asia, China is increasing its lead in defense spending. China does not release accurate data on defense spending (a common trait in all communist nations), but admits that its defense spending has doubled in the last decade. Current Chinese defense spending is believed to be $90 billion a year. That’s nearly ten times the $9.2 billion Taiwan spends. China spends twice what Japan does, and more than three times South Koreas’ $24 billion. Tiny Singapore spends nearly $6 billion a year, and has one of the most effective, man-for-man, forces in the region. India, which is increasingly becoming a military rival of China, spends about $30 billion a year. Australia spends about $24 billion a year. All the other nations in the region spend relatively small amounts, barely enough to keep threadbare forces fed and minimally equipped. China’s only allies in the region; North Korea and Pakistan, together spend less than $5 billion a year on defense.

China increased its defense spending 14.9 percent last year. That’s down from the 17.9 percent jump in 2008. China claims that its defense spending is only 1.4 percent of GDP (compared to 4 percent for the U.S. and 1-2 percent for most other Western nations.) But China keeps a lot of defense spending off the official defense budget, and actual spending is closer to three percent of GDP. Currently, the U.S. has a GDP of $13.8 trillion, Japan $4.4 trillion and China, $3.5 trillion.

February 5, 2010

China ramps up submarine activity

Filed under: China, Japan, Military — Tags: , , , — Nicholas @ 12:39

Strategy Page reports on increased activity around China’s maritime periphery:

Recently, the Taiwanese Navy detected an unidentified submarine outside one of its major naval bases. Ships and helicopters pursued the contact, but the suspected submarine left the area. A Chinese boat was suspected, mainly because for the last decade, Chinese subs have increasingly been showing up close to Japan and South Korea as well.

[. . .]

Chinese Song class diesel electric and Han class nuclear powered boats have been detected and tracked with increasing frequency over the last few years. In that time, one of each of these was spotted stalking the American carrier USS George Washington, as it headed to South Korea for a visit.

China is rapidly acquiring advanced submarine building capabilities, and providing money (for fuel and spare parts) to send its subs to sea more often. Moreover, new classes of boats are constantly appearing. The new Type 39A, or Yuan class, looks just like the Russian Kilo class. In the late 1990s, the Chinese began ordering Russian Kilo class subs, then one of the latest diesel-electric design available. Russia was selling new Kilos for about $200 million each, which is about half the price other Western nations sell similar boats for. The Kilos weigh 2,300 tons (surface displacement), have six torpedo tubes and a crew of 57. They are quiet, and can travel about 700 kilometers under water at a quiet speed of about five kilometers an hour. Kilos carry 18 torpedoes or SS-N-27 anti-ship missiles (with a range of 300 kilometers and launched underwater from the torpedo tubes.) The combination of quietness and cruise missiles makes Kilo very dangerous to American carriers. North Korea and Iran have also bought Kilos.

Crying “Wolf!” about China

Filed under: China, Economics, Politics — Tags: , , — Nicholas @ 08:38

Jon, my former virtual landlord sent me a link to this article by Robert Fogel, suggesting that it was “time for another one of your ‘whistling past the graveyard / you can’t trust the numbers’ posts”. And he’s quite right.

As with just about every other “forward looking” report on China, Fogel focuses on current trends which cannot continue in a straight line:

In 2040, the Chinese economy will reach $123 trillion, or nearly three times the economic output of the entire globe in 2000. China’s per capita income will hit $85,000, more than double the forecast for the European Union, and also much higher than that of India and Japan. In other words, the average Chinese megacity dweller will be living twice as well as the average Frenchman when China goes from a poor country in 2000 to a superrich country in 2040. Although it will not have overtaken the United States in per capita wealth, according to my forecasts, China’s share of global GDP — 40 percent — will dwarf that of the United States (14 percent) and the European Union (5 percent) 30 years from now. This is what economic hegemony will look like.

Maybe. Or maybe the demographics that this ultra-expansionist scenario depends on won’t play out the way Fogel thinks. There’s also the problem of depending (in any meaningful way) on official government statistics:

Most accounts of China’s economic ascent offer little but vague or threatening generalities, and they usually grossly underestimate the extent of the rise — and how fast it’s coming. (For instance, a recent study by the Carnegie Endowment for International Peace predicts that by 2050, China’s economy will be just 20 percent larger than that of the United States.) Such accounts fail to fully credit the forces at work behind China’s recent success or understand how those trends will shape the future. Even China’s own economic data in some ways actually underestimate economic outputs.

[. . .]

though it’s a common refrain that Chinese data are flawed or deliberately inflated in key ways, Chinese statisticians may well be underestimating economic progress. This is especially true in the service sector because small firms often don’t report their numbers to the government and officials often fail to adequately account for improvements in the quality of output. In the United States as well as China, official estimates of GDP badly underestimate national growth if they do not take into account improvements in services such as education and health care. (Most great advances in these areas aren’t fully counted in GDP because the values of these sectors are measured by inputs instead of by output. An hour of a doctor’s time is considered no more valuable today than an hour of a doctor’s time was before the age of antibiotics and modern surgery.) Other countries have a similar national accounting problem, but the rapid growth of China’s service sector makes the underestimation more pronounced.

Well, then, at least Fogel accepts the notion that the official data may not be accurate. That’s better than a lot of commentators, although he’s still looking at it as if the official numbers were some sort of “baseline”. They’re not (although he does make a very good point that GDP numbers don’t capture improvements in quality . . . but that’s true for all economies, not just China’s). They’re even more pure fiction than the Climate Research Unit’s imaginary data.

It’s not even a deliberate lie: it’s a natural artifact of the current Chinese economic model. China’s economy is much more free now than it was ten years ago, but it’s not a free market economy yet. The central planners still attempt to control the “levers” of the economy — and they have some pretty crude ways of doing that. During the modernization of the industrial sector, probably the biggest driving force was the Peoples’ Liberation Army (PLA). They needed huge quantities of equipment, and the government didn’t want to buy everything from former Soviet and Warsaw Pact inventories (for one thing, the quality was generally poor and the technology was at least a generation behind the West).

This meant that the PLA needed — and got — much more say in what was produced and where it was produced. In other centrally planned economies, the state handled this sort of industrial policy. In China, the PLA got directly involved. A Soviet arms factory might have a military liason office with a general, several staff officers, and some GRU/KGB/NKVD oversight. The Chinese equivalent would have the general directly in charge of the factory, running it like a division of the army.

In this way, the PLA stopped being just the customer/end user. They cut out the middleman and absorbed the entire supply chain. The PLA became a significant economic player in the Chinese industrial economy . . . and this is still true today. The generals aren’t formally in charge, but they own the companies that do military production.

So what? So let’s look at how a civilian corporation’s incentives differ from one owned directly by the army. In a civilian corporation, the CEO runs the business with an eye to generating the largest profit possible while staying (for the most part) within the law. A CEO who deviates from this to ride a favourite hobby horse will eventually face the wrath of the stockholders who want that maximized profit. There are natual limits on how much freedom to invest in uneconomic activity any CEO will be given. Sensible stockholders don’t try to micromanage the firm, but do raise questions if too much of the company’s efforts are devoted to things clearly not related to the company’s long term benefit. Company accounts can be rigged, for a time, to show misleading results, but eventually (Enron, Worldcom, etc.) the truth will out.

A Chinese firm that’s owned by the army? Profit may be nice, but the “CEO” reports to a different master: the guys with the guns. The company accounts will show exactly what the guys with the guns want them to show . . . and the oversight and auditing committee members carry submachine guns. You’re told that your target is 10% growth? Don’t you think that the reported result will be at least 10%? Because your life may depend on the reported results being acceptable.

If the PLA had scaled back their involvement in the economy as the economy liberalized, this might only be a problem in old fashioned “heavy” industries. There’s not much evidence that this happened, however. The PLA’s portfolio may not include all sectors of the economy (even the PLA must have limits), but the official stats can’t indicate what portion of reported growth is from freer parts of the economy and what portion is from the 47th PLA industrial army.

Then there’s the other factor that will hobble China’s reported growth, demographics:

It’s the same story with the relative decline of a Europe plagued by falling fertility as its era of global economic clout finally ends. Here, too, the trajectory will be more sudden and stark than most reporting suggests. Europe’s low birthrate and its muted consumerism mean its contribution to global GDP will tumble to a quarter of its current share within 30 years. At that point, the economy of the 15 earliest EU countries combined will be an eighth the size of China’s.

Europe does indeed have a falling birthrate: most population growth in Europe these days is from immigration and the vastly higher birth rate of recent immigrants. Set aside the immigrants and the immigrant birth rate and most EU countries are well below replacement rate — they’ve stopped growing and started shrinking in population. Is it any wonder that Europe’s predicted share of the world GDP is poised to shrink as well?

China has a different demographic problem, and one that has the potential to cause disruptions far beyond their own borders: the aftermath of the famous “one child” policy. China has a vast disproportion of males, because Chinese parents opted to keep boy babies and abort girl babies. This may be another case where we can’t depend on the official numbers, but even if you do think they’re close to accurate, it doesn’t paint a pretty picture:

To say that China’s one-child family policy has been a disaster is an understatement. A report released earlier this month by the nation’s top think tank — the Communist Government’s Chinese Academy of Social Sciences (CASS) — says that the policy has created a huge gender imbalance with significant implications for future social stability.

Indeed, according to the report, 24 million men reaching marriageable age by 2020 will never marry because of the sex imbalance. Think of it in these terms: what if the entire population of New York City or of Australia was never able to marry. Imagine the social implications in a city or nation that large where no one can marry. Imagine if that city or country is comprised solely of 24 million men; men with no homes to return to at night; men without the responsibilities of a family to keep them engaged in productive pursuits.

Military adventurism may be in the near future for China’s neighbourhood. It’s one of the traditional ways to control and direct the excess of young males away from domestic social disruption. Fogel still prefers the rosy glow of the positive scenario, however:

Of course, China faces its own demographic nightmares, and skeptics point to many obstacles that could derail the Chinese bullet train over the next 30 years: rising income inequality, potential social unrest, territorial disputes, fuel scarcity, water shortages, environmental pollution, and a still-rickety banking system. Although the critics have a point, these concerns are no secret to China’s leaders; in recent years, Beijing has proven quite adept in tackling problems it has set out to address. Moreover, history seems to be moving in the right direction for China. The most tumultuous local dispute, over Taiwan’s sovereignty, now appears to be headed toward a resolution. And at home, the government’s increasing sensitivity to public opinion, combined with improving living standards, has resulted in a level of popular confidence in the government that, in my opinion, makes major political instability unlikely.

I’m not too sure that the Taiwan situation is even close to a peaceful resolution, but that’s a different topic altogether.

Anyway, speaking of hobby horses, I guess this topic counts as one of mine:

January 21, 2010

Naval forces, estimated

Filed under: China, Military — Tags: — Nicholas @ 08:44

Strategy Page summarizes the recent accidental release of US intelligence estimates about the People’s Liberation Army Navy (PLAN):

The strength of the Chinese fleet was listed as;

Submarines- 62 (53 diesel Attack Submarines, six nuclear Attack Submarines, three nuclear Ballistic Missile Submarines). The U.S. has 72 submarines, all nuclear (53 attack and 18 ballistic missile.)

Destroyers-26. The U.S. has 52.

Frigates-48. The U.S. has 32, including two of the new LCS vessels.

Amphibious Ships 58. The U.S. has 30, all much larger and equipped with flight decks and helicopters, plus landing craft.

Coastal Patrol (Missile)- at least 80. The U.S. had a few of these, but got rid of them. China uses these for coastal patrol and defense, a concept they inherited from the Russians.

In addition, the U.S. has eleven aircraft carriers (ten of them nuclear powered) and 22 cruisers.

Most of the Chinese ships are older (in design, if not in the age of the vessels) than their American counterparts. China is building new classes of ships, with more modern equipment and weapons.

January 15, 2010

Why China won’t be able to corner the rare earth market

Filed under: China, Economics, Technology — Tags: , — Nicholas @ 08:36

Tim Worstall looks at the importance of rare earth to the modern electronics industry, and why China’s ongoing attempt to corner the market won’t work in the long run:

The Chinese government is trying to corner the rare earths market and that isn’t good news for the tech business. Those with good memories of Chemistry O Level will know what the rare earths are: the funny little line of elements from Lanthanum to Lutetium at the bottom of the periodic table, along with Yttrium and Scandium, which we usually add to the list.

The reason we like them in the tech business is because they’re what enables us to make a lot of this tech stuff that is the business. You can’t run fibre optic cables without your Erbium repeaters, Europium, Terbium and Yttrium are all used to make the coloured dots in CRTs, the lens on your camera phone is 25 per cent Lanthanum oxide (yes, really, glass is made of metal oxides) and without Neodimium and Dysprosium we’d not have permanent magnets: no hard drives nor iPod headphones.

[. . .] it is still true that we get all of them – apart from Scandium, which is a rather different little beastie – from the same ore. In fact, we tend to get them not just from the same ore, but from the same mine: Bautou in Inner Mongolia (that’s the Chinese part, not the independent country).

And that’s where our problems really start. Over the past couple of decades China has been cracking down on small mines, usually in the name of environmental policy. That even may have been the real reason, as rare earth mines can be messy things. The outcome is that now 95 per cent of the earth’s supply comes from this one mining complex and the Chinese Government has just announced export restrictions.

So, if they have a monopoly on 95% of the world supply, why won’t it hold up? Because in spite of the name, they’re not as rare as all that . . . and there are substitutions that can be made for some or all of the current application needs. By restricting the supply and/or driving up the price, China will spur new competitors to enter the field and new sources of rare earths to be developed. In the short term, it will definitely create price increases (which, of course, will be passed on to the consumer), but in the medium-to-long term they will create a vibrant competitive marketplace which will almost inevitably drive the prices down below current levels.

Isn’t economics fascinating?

November 19, 2009

Female fighter pilots in Pakistan, but not in India

Filed under: China, India, Military — Tags: , , — Nicholas @ 08:30

Strategy Page looks at the differing outlooks for female pilots in Indian and Pakistani service:

The Indian Air Force does not plan to train women to be fighter pilots. Neighboring Pakistan is not much better, even though it has seven female fighter pilots. They fly F-7s, a Chinese version of the Russian MiG-21. None have been in combat yet, despite the heavy use of jet fighter-bombers in nearly a year of fighting in the tribal territories. There, the more modern F-16s are doing most of the bombing of Taliban targets. The Indian air force leaders believe that it costs so much (over $2 million) to train a fighter pilot, that they air force needs 10-15 years of active service to get that investment back. But women tend to leave the air force to have children, thus making them much more expensive fighter pilots than their male counterparts. So the Indian leadership is holding off on female fighter pilots.

Women flying Pakistani F-7s are a very recent development, part of a program that only began six years ago. Pakistan is not alone using women as fighter pilots, with China graduating its first 16 female fighter pilots this year. There are already 52 women flying non-combat aircraft, and another 545 in training. India has female military pilots, who only operate helicopters and transports.

[. . .]

All the nations considering female fighter pilots, are having a hard time keeping male pilots in uniform. Too many of the men depart for more lucrative, and less stressful, careers as commercial pilots. Women may not be the solution. Currently, only about half of Indian female officers stay in past their initial five year contract. Indian women, even military pilots, are under tremendous social and family pressure to marry. Those that do may still be pilots, but married women expected to have children. The Indian Air Force provides its female officers with ten months leave for this, six months during pregnancy, and four months after delivery. The air force does all this because pilots are very expensive to train. Fuel costs the same everywhere, as are spare parts. So what India may save in lower salaries, is not enough. A good pilot costs over half a million dollars for training expenses, and requires over five years flying experience to become effective in a first line fighter (the Su-30 for India). It’s all that expensive aviation fuel that pushes the final “cost of a fighter pilot” to over $2 million. Many women are willing to take up the challenge. But they have already heard from their peers in Western air force, that motherhood and piloting can be a very exhausting combination.

November 11, 2009

Contrarian investment strategy: short Chinese stocks

Filed under: Bureaucracy, China, Economics — Tags: , , , — Nicholas @ 17:29

I’ve been skeptical of the official Chinese government economic statistics for quite some time, so I find articles like this one to be quite believable:

Chanos and the other bears point to several key pieces of evidence that China is heading for a crash.

First, they point to the enormous Chinese economic stimulus effort — with the government spending $900 billion to prop up a $4.3 trillion economy. “Yet China’s economy, for all the stimulus it has received in 11 months, is underperforming,” Gordon Chang, author of “The Coming Collapse of China,” wrote in Forbes at the end of October. “More important, it is unlikely that [third-quarter] expansion was anywhere near the claimed 8.9 percent.”

Chang argues that inconsistencies in Chinese official statistics — like the surging numbers for car sales but flat statistics for gasoline consumption — indicate that the Chinese are simply cooking their books. He speculates that Chinese state-run companies are buying fleets of cars and simply storing them in giant parking lots in order to generate apparent growth.

Back in 2004, I wrote:

While there is no doubt that China is a fast-growing economy, the most common mistake among both investors and pundits is to assume that China is really just like South Carolina or Ireland . . . a formerly depressed area now achieving good results from modernization. The problem is that China is not just the next Atlanta, Georgia or Slovenia. China is still, more or less, a command economy with a capitalist face. One of the biggest players in the Chinese economy is the army, and not just in the sense of being a big purchaser of capital goods (like the United States Army, for example).

The Chinese army owns or controls huge sectors of the economy, and runs them in the same way it would run a division or an army corps. The very term “command economy” would seem to have been minted to describe this situation. The numbers reported by these “companies” bear about the same resemblance to reality as thos posted by Enron or Worldcom. With so much of their economy not subject to profit and loss, every figure from China must be viewed as nothing more than a guess (at best) or active disinformation.

Probably the only figures that can be depended upon for any remote accuracy would be the imports from other countries — as reported by the exporting firms, not by their importing counterparts — and the exports to other countries. All internal numbers are political, not economic. When a factory manager can be fired, he has his own financial future at stake. When he can be sentenced to 20 years of internal exile, he has his life at stake. There are few rewards for honesty in that sort of environment: and many inducements to go along with what you are told to do.

Under those circumstances, any growth figures are going to be aggregated from all sectors, most of which are under strong pressure to report the right numbers, not necessarily corresponding with any real measurement of economic activity. So, if the economic office wants to see a drop in the economy, that’s what they’ll get.

Basing your own personal financial plans on numbers like this would quickly have you living in a cardboard box under a highway overpass. Companies in the soi-disant free world have shareholders or owners to answer to. Companies in China exist in a totally different environment.

Five years on, there’s not much (except a few outdated details) that I’d bother changing.

H/T to Ghost of a Flea for the link.

October 19, 2009

North Korea conducting nerve gas tests?

Filed under: China, Military — Tags: , — Nicholas @ 07:44

Strategypage reports that there have been multiple incidents where nerve gas has been detected along the Chinese-North Korean border:

Anonymous Chinese military sources revealed that, a year ago, nerve gas detectors on the North Korean border went off. Further investigation revealed small amounts of Sarin nerve gas. There were no casualties, but the detectors went off again three months later. The Chinese don’t have nerve gas detectors deployed on the North Korean border, but they do periodically send special operations troops to the border to check security, and these units carry the detectors with them.

The North Koreans denied any responsibility, but it’s long been suspected that a chemical plant in the North Korean town of Sinuiju (on the Chinese border and the location of one of the major bridges, on the Yalu river, connecting the two countries) produced nerve gas, along with non-military products. Apparently there were problems in the plant, but there were no reports (not unusual in North Korea) of any nerve gas casualties in, or near, the plant.

October 6, 2009

If you can’t believe Xinhua, who can you believe?

Filed under: China, Europe, Media — Tags: , , — Nicholas @ 16:25

Lester Haines had a lot of fun composing this, um, fascinating report from the Chinese news agency, Xinhua:

Chinese media finger Swedish lesbian enclave
Mythical city of Sapphic luuuurv

Chinese media have confirmed what we in the West suspected all along: that concealed in the northern Swedish woods is a city of 25,000 women, many of whom have turned to Sapphic love to satiate their natural Scandinavian sexual desires.

According to news agancy Xinhua, the all-female enclave is called “Chako Paul City”, and was founded in 1820 by a “wealthy widow”. The city is guarded by two blonde sentries who prevent men from entering. Those chaps who do unwisely attempt to force the issue risk being “beaten half to death” by Nordic gender police.

Women, though, are welcome to visit Chako Paul City, which boasts a burgeoning tourist industry with hotels and restaurants catering for international guests. Locals, however, are discouraged from leaving their female paradise, and those who do “are only allowed to re-enter Chako Paul City if they agree to bathe and undertake several other measures designed to ensure that their out-of-town trysts don’t negatively affect the mental state of other women in the town”.

Sounds like an old post in alt.sex.stories.swedish to me . . .

October 5, 2009

Tension in the Himalayas?

Filed under: China, India, Military — Tags: — Nicholas @ 07:20

Strategy Page has a short primer on the potentially volatile issue of where the borders are in the Himalayas:

China is causing considerable consternation in India by reviving old claims to border areas. In northeast India, the state of Arunachal Pradesh has long been claimed as part of Tibet (although when Tibet was an independent nation a century ago, it agreed that Arunachal Pradesh was part of India.) Arunachal Pradesh has a population of about a million people, spread among 84,000 square kilometers of mountains and valleys. The Himalayan mountains, the tallest in the world, are the northern border of Arunachal Pradesh, and serve as the border, even if currently disputed, with China. This is a really remote part of the world, and neither China nor India want to go to war over the place. But the two countries did fight a short war, up in these mountains, in 1962. The Indians lost, and are determined not to lose if there is a rematch.

September 18, 2009

US tariff on Chinese tires “a colossal blunder”

Filed under: China, Economics, USA — Tags: , — Nicholas @ 09:14

I don’t read The Economist regularly these days, having given up my 20-year subscription about five years back. Their steady drift away from free markets towards statist models made the publication less and less interesting (and much more live most other financial publications). This article, however, at least covers the situation in an even-handed way:

You can be fairly sure that when a government slips an announcement out at nine o’clock on a Friday night, it is not proud of what it is doing. That is one of the only things that makes sense about Barack Obama’s decision to break a commitment he, along with other G20 leaders, reaffirmed last April: to avoid protectionist measures at a time of great economic peril. In every other way the president’s decision to slap a 35% tariff on imported Chinese tyres looks like a colossal blunder, confirming his critics’ worst fears about the president’s inability to stand up to his party’s special interests and stick to the centre ground he promised to occupy in office.

This newspaper endorsed Mr Obama at last year’s election in part because he had surrounded himself with enough intelligent centrists. We also said that the eventual success of his presidency would be based on two things: resuscitating the world economy; and bringing the new emerging powers into the Western order. He has now hurt both objectives.

Several sources mentioned that yesterday’s announcement about cancelling the ABM systems that were to be installed in Poland and the Czech Republic was an attempt to cozy up to Russia. This move can only be interpreted as an attempt to look tough against the Chinese — which would just be dumb — or (even more disturbingly) solid proof that Barack Obama doesn’t have a clue on international trade.

September 3, 2009

Was Fukuyama correct after all?

Filed under: China, Economics, History — Tags: , — Nicholas @ 18:28

Scott Sumner has an interesting post up about Francis Fukuyama’s “end of history” thoughts of the late 1980s:

So the obvious choice for most successful prediction is Francis Fukuyama’s 1989 claim that “history was ending,” that the great ideological battle between democratic capitalism and other isms was essentially over, and that henceforth the world would become gradually more democratic, peaceful, and market-oriented.

[. . .]

I get very annoyed when I see people say “the Chinese case proves that economic development doesn’t inevitably lead to political liberalization.” There are so many problems with this sort of statement that one hardly knows were to begin. China has seen incredible political liberalization since 1978, indeed even some progress since 1998. But what about western-style democracy? To answer that question, consider the list above. I would argue that China most resembles Thailand. Both have similar per capita GDPs, both have a huge split between the urban elite and the rural poor. My hunch is that consciously or subconsciously, the urban residents of China are not thrilled by the idea of a pure democracy that would effectively turn the country over to the rural poor. But wait a few decades, when China goes from being 60%-70% rural, to 60%-70% urban, and from mostly poor to mostly middle-income, and from mostly undereducated to mostly educated. Then let’s see how Fukuyama’s thesis holds up.

History is still ending. Or maybe I should say “his story” is ending, the story of war, revolution and voyages of discovery. The Illiad and the Odyssey. And “her story” is beginning. A world focused on improving education, health care, cuisine, leisure time, the arts, communication, animal rights, the environment, etc.

August 6, 2009

China soon to be capable of settling the “Taiwan question”?

Filed under: China, Military — Tags: , — Nicholas @ 10:37

According to a recent report from RAND Corporation, unlike the last time they ran the simulation (in 2000), their current projections have the Chinese able to win an air battle over Taiwan:

In 2000, the influential think thank RAND Corporation crunched some numbers regarding a possible Chinese invasion of Taiwan, and concluded that “any near-term Chinese attempt to invade Taiwan would likely be a very bloody affair with a significant probability of failure” — especially if the U.S. raced to the island nation’s defense. But nine years later, a new, much-updated edition of the RAND study found that China’s improved air and missile forces “represent clear and impending dangers to the defense of Taiwan,” whether or not the U.S. is involved.

“A credible case can be made that the air war for Taiwan could essentially be over before much of the Blue [American and allied] air force has even fired a shot,” the monograph notes.

I’m not sure if this comment was intended to forestall the cancellation of the last part of the F-22 order, or if it’s a marker for a future “We told you so” debate:

It’s a potentially controversial assertion — and one that might have fueled the (now-resolved) debate over whether the U.S. Air Force should buy more F-22s. RAND found that F-22s flying from the relative safety of Guam could be surprisingly effective in blunting a Chinese air assault.

Remember that the air battle would only be part of the military equation . . . fighters and bombers still can’t overcome ground forces by themselves. A seaborne invasion would still be necessary, and the PLAN does not (yet) have sufficient lift tonnage to ensure a chance of success. Amphibious attacks are the hardest to accomplish (despite the Allied string of successes from 1942 to 1951), and always depend on both command of the air and command of the sea. China could, according to RAND’s latest study, win the air battle but still does not have the necessary preponderance of force to win control of the sea.

But the century is yet young . . .

H/T to Jon for the link.

July 21, 2009

iPhone prototype loss leads to suicide?

Filed under: China, Technology — Tags: — Nicholas @ 16:53

A very disturbing tale from The Register:

A Chinese engineer committed suicide after he was allegedly roughed-up by company security services when one of the iPhone 4G prototypes entrusted into his care went missing.

Twenty-five-year-old Sun Danyong, a recent engineering graduate, was employed by Foxconn, manufacturer of Apple’s iPhone and iPods. According to reports from China Radio International (Google translation), VentureBeat, and others, Sun leapt to his death from the 12th floor of his apartment building on July 16th, a few days after the iPhone 4G prototype disappeared.

The reports indicate that on July 9th, Sun received 16 of the prototypes, but a few days later, he could account for only 15 of them. After searching the factory, he reported the missing iPhone to his superiors on Monday, July 13th.

Two days later, his apartment was allegedly searched by Foxconn security who, according to CRI and others, beat Sun during their investigation.

Although the beating is unproven, what happened at 3:00 am on Thursday the 16th is not in dispute: Security cameras in Sun’s apartment building taped him leaping from an open window.

Powered by WordPress