Quotulatiousness

October 27, 2013

“Dangerous Ground” in the South China Sea

Filed under: China, Military, Pacific — Tags: , , — Nicholas @ 09:26

John Donovan linked to this interesting New York Times Magazine feature about the Spratly Islands and the geopolitical standoff between China and pretty much all of the other nations bordering the South China Sea:

Spratly Islands - Sierra Madre aground on Ayungin

Ayungin Shoal lies 105 nautical miles from the Philippines. There’s little to commend the spot, apart from its plentiful fish and safe harbor — except that Ayungin sits at the southwestern edge of an area called Reed Bank, which is rumored to contain vast reserves of oil and natural gas. And also that it is home to a World War II-era ship called the Sierra Madre, which the Philippine government ran aground on the reef in 1999 and has since maintained as a kind of post-apocalyptic military garrison, the small detachment of Filipino troops stationed there struggling to survive extreme mental and physical desolation. Of all places, the scorched shell of the Sierra Madre has become an unlikely battleground in a geopolitical struggle that will shape the future of the South China Sea and, to some extent, the rest of the world.

[…]

To understand how Ayungin (known to the Western world as Second Thomas Shoal) could become contested ground is to confront, in miniature, both the rise of China and the potential future of U.S. foreign policy. It is also to enter into a morass of competing historical, territorial and even moral claims in an area where defining what is true or fair may be no easier than it has proved to be in the Middle East.

The Spratly Islands sprawl over roughly 160,000 square miles in the waters of the coasts of the Philippines, Malaysia, Brunei, Taiwan and China — all of whom claim part of the islands.

Spratly Islands shipping lanes

October 22, 2013

China’s not-so-foolish consistency

Filed under: China, Media — Tags: , , — Nicholas @ 08:22

The Naval Diplomat reminds us about Ralph Waldo Emerson’s quip about “foolish consistency” being “the hobgoblin of little minds” and makes the point that China’s consistency may not qualify as foolish at all:

Last week Mark Stokes and Russell Hsiao of Project 2049 Institute published a longish report profiling the PLA General Political Department. Like all good analysts, Mark and Russell telegraph their thesis at the outset, subtitling the monograph “Political Warfare with Chinese Characteristics.”

A term that pops us repeatedly in the text is the “three warfares,” namely legal, psychological, and media warfare. The Heritage Foundation’s Dean Cheng appears to have been the first to look into the concept in a serious way. I did some research on it a couple of years back. To oversimplify, Chinese officialdom — not just the diplomatic apparatus but also the PLA — has undertaken a concerted effort to bend opinion among various target audiences. International law and the media are two channels through which it influences these audiences, prosecuting psychological operations.

In one sense, the three-warfares concept is innocuous. Any government worth its salt tries to project a favorable image abroad, swaying popular and elite opinion in its interests. That’s what public diplomacy is all about. But the notion of three warfares waged constantly, in peacetime, by all arms of the Chinese Communist regime, including a far-from-apolitical military, should give foreign observers pause. It bespeaks a combative temperament toward the wider world, and a single-minded zeal toward messaging. In all likelihood, ulterior motives are at work even in routine interactions with mainland interlocutors.

October 21, 2013

Nate Silver on Chinese economic data

Filed under: China, Economics — Tags: — Nicholas @ 08:37

The Wall Street Journal‘s China Real Time Report has an interview with celebrity statistician Nate Silver:

Can you apply good data analysis to poor data, for example, in China?

People in the United States and the United Kingdom overestimate the quality of economic data. Even if people are above board, it is simply hard to estimate something like the American economy.

With China, you would have even more difficulty. I think the general lesson is that by looking at a broader consensus of indicators, you do well than just looking at one indicator or one sector.

It is problematic to think about “how do you measure Chinese growth”. One way [is to look at] more public facing measures — by looking, for example, at the amount of light output emanating from China.

I flew through Beijing [on the way to Hong Kong] — there was less physical brightness coming from Beijing than you would have seen from a comparable American city or European city.

A true cynic might suggest that the lights were dimmed by the pervasive air pollution in Beijing…

October 10, 2013

QotD: Micro-economics with a Chinese twist

Filed under: China, Economics, Quotations — Tags: , — Nicholas @ 08:53

China’s great economic renaissance began when Deng Xiaoping said that creating a modern China required “opening and reform.” Xiaoping hedged on the precise definition of “opening and reform.” In 1989 he sent tanks and infantry to Tiananmen Square to demonstrate that the process had severe limitations.

But micro-economic innovation? Xiaoping sought a micro-economic revolution. Xiaoping wanted Chinese entrepreneurs to fulfill what economist Joseph Schumpeter dubbed the entrepreneur’s function: “to reform or revolutionize the pattern of production.” The micro-economic opportunity, however, came with the Tiananmen restriction: The Party must remain supreme.

China’s first-generation entrepreneurs of micro-economic innovators pulled it off. In 1980 China had a GDP of about $190 billion. In 1998, the year after Xiaoping died, China’s GDP topped $1 trillion. In 2013 China has the world’s second largest economy, with a GDP of over $7 trillion.

Wei Gu is The Wall Street Journal‘s “China Wealth and Luxury editor” — and in 1980 who’d have predicted that job? In a recent article titled “China’s Second-Generation Entrepreneurs A Different Breed,” Gu reported that the “foreign educated” children of Chinese entrepreneurs are not enthralled with “the endless wining and dining of government officials that is necessary to do business in China.” In China, since personal whim still trumps law, businesspeople must constantly curry favor with government officials. It amounts to micro-economic lobbying.

Austin Bay, “China’s Toughest Economic Problem Is Political”, Strategy Page, 2013-10-8

October 9, 2013

Reasons not to be fearful of “China’s economic threat”

Filed under: China, Economics, Government — Tags: , , , , — Nicholas @ 13:50

If you’ve been following the blog for a while, you’ll probably have picked up some of my disdain for the “OMG! China’s going to eat our (economic) lunch!” meme that is pretty much a copy-paste of the same worry over Japan in the 1980s. In Maclean’s, Colby Cosh explains why you shouldn’t put too much effort into worrying about the Chinese economic Colossus crushing us any time real soon:

What I always wonder when I encounter a China bull or a Chinaphobe — for they are two sides of the same coin — is this: Even if they think “socialism with Chinese characteristics” is economically superior to ordinary capitalism, where in China are the parallel cultural institutions to support prolonged capitalist-style growth? Maybe China doesn’t need reciprocal free trade to blow our doors off in the race to utopia. Maybe it doesn’t need untidy democratic quarrelling. One presumes it won’t need a high level of achievement in basic science, either, judging by the Nobels: It is well-documented that the Chinese civilian research establishment is awash in fraud and plagiarism, to say nothing of the destructive favouritism inherent to a one-party state.

Rowan Callick’s new book The Party Forever: Inside China’s Modern Communist Party makes a simple, compact judgment on the general state of Chinese higher education: Just look where the Party leadership sends its own children to university: the U.S. Another important leading indicator of cultural progress is press freedom, which, if history has anything to say on the matter at all, appears to be utterly integral to sustained prosperity. But Mainland China has no newspapers as we understand them; it is not even clear that the regimented, spoon-fed “reporters” there could assemble one, even if the Party would allow it.

The Diane Francises of the world would have us reject the relevance of the Soviet experience to China’s future, to the point of ignoring familiar Soviet themes that are increasingly apparent in China: the vast infrastructure projects standing unused in the middle of nowhere, the blind environmental despoliation, the dodgy economic statistics. Beyond mastery of trading, interior China has simply never possessed much of the cultural technique upon which the advanced stages of economic development would seem to depend. Hong Kong is the exception, but having taken it over, China shows little appetite so far for imitating its social openness and individuality — or for those of Taiwan or Japan or South Korea. It still requires a strange leap of faith to believe it possible for China to economically surpass these neighbours, and ourselves, without becoming a great deal more like us.

Regular visitors to the blog know that I’ve been rather skeptical about the official statistics reported by Chinese government and media sources.

October 7, 2013

Even the “revised” official Chinese economic stats are dodgy

Filed under: China, Economics — Tags: , , — Nicholas @ 09:23

In a survey of China’s military and economic status, Strategy Page mentions the perennial issue of unreliable official economic statistics for China:

Chinese officials are becoming more open about the problems they have getting accurate economic information for such things like annual GDP and unemployment rates. Apparently Chinese GDP has not been growing steadily at near ten percent a year for decades. Chinese officials do eventually (months or years later) get more accurate data and while Chinese GDP has actually been steadily growing over the last three decades the annual growth has actually varied from 5-15 percent. Chinese official policy was to keep everyone calm by issuing less variable annual growth rates. In short, the official numbers were doctored. For more accurate and immediate indicators of economic activity Chinese and foreign economists and business leaders use things like electricity production, railroad traffic and similar data that cannot be manipulated by local officials to make their city or province look more successful. Many financial exerts inside and outside China fear that all this official manipulation of economic data (an ancient practice in China) is masking some serious economic problems that could go sideways at any time and cause a banking crises that would paralyze the economy for a while and cause political chaos. It’s very much a crouching tiger and hidden dragon. This is an ancient phrase warning that behind seeming success and talent lurks the possibility of imminent disaster. Chinese are ever mindful of these bits of ancient wisdom.

September 20, 2013

Not “lovingly crafted”, but made with craftsmanship

Filed under: Business, China, Randomness, Woodworking — Tags: — Nicholas @ 00:01

Sippican Cottage posted this the other day, and I have to admit I was vastly impressed with the skills of these workers:

That workshop has nothing that I don’t understand going on it it. It’s a very safe place to work, although the State of California would tell you that every single thing in it is known to give you cancer. But they say that about a glass of tapwater. The finish that the woman’s applying is shellac, which you can eat after is dries, and the glue pot is filled with hide glue, which is just horses that came in last, and most of the tools make wood shavings, not sawdust, and the sanding is done by hand, so the sawdust isn’t copious or particularly dangerous. No one in the video is missing a digit, or has any visible scars from working with their hands all day. They all have fans pointed at them, but that’s no doubt because it’s too warm for comfort wherever they are. That place is not full of toxic fumes. You’d pay money to smell the smells in there. Shellac and hide glue and wood shavings smell wonderful. I hear laughter in there, and people smile when a camera is pointed at them. It’s a sheepish smile I understand. They are not used to people being interested in their mundane life. No one is wearing safety glasses or ear protection, and no one needs them, either.

No one is LOVINGLY CRAFTING anything in the video, although the violins they make will be sold for huge money in Europe, and the customers will be told that their violins were… LOVINGLY CRAFTED. But then again, no one I’ve seen in five thousand LOVINGLY CRAFTED videos have one-tenth the hand skills I see demonstrated by everyone in the video. It’s important work to them, so they do it to the best of their ability. People that do things over and over get really good at them. I wish them all well — and hope on my best day, I’m as good as they are on their worst.

September 10, 2013

China’s historical model for naval strategy

Filed under: China, History, Middle East, Military, Pacific — Tags: , , , , — Nicholas @ 09:16

At The Diplomat, James Holmes explains the odd fact that China is a “good citizen” in their coalition work with other countries fighting piracy away from home, but bullies its neighbours in the waters closer to home:

The analogy is the doctrine of “no peace beyond the line” practiced in late Renaissance Europe. To recap: in a nifty bit of collective doublethink, European rulers struck up a compact whereby nations could remain at peace in Europe, avoiding the hardships of direct conflict, while assailing each other mercilessly beyond a mythical boundary separating Europe from the Americas. In practice this meant they raided each other’s shipping and outposts in the greater Caribbean Sea and its Atlantic approaches.

It feels as though an inverse dynamic is at work in the Indo-Pacific theater. Naval powers cooperate westward of the line traced by the Malay Peninsula, Strait of Malacca, and Indonesian archipelago. Suspicions pockmarked by occasional confrontation predominate east of the South China Sea rim, a physical — rather than imaginary — line dividing over there from home ground.

A non-Renaissance European, Clausewitz, helps explain why seafaring powers can police the Gulf of Aden in harmony while feuding over the law of the sea in the East China Sea and South China Sea. It’s because the mission is apolitical. Counterpiracy is the overriding priority for the nations that have dispatched vessels to the waters off Somalia. Few if any of them have cross-cutting interests or motives that might disrupt the enterprise. It’s easy to work together when the partners bring little baggage to the venture.

[…]

You see where I’m going with this. The expedition to the Gulf of Aden is an easy case. It proves a trivial result, namely that rivals can collaborate for mutual gain when they have the same interests in an endeavor. Now plant yourself in East Asia and survey the strategic terrain within the perimeter separating the Indian from the Pacific Ocean. China views the South China Sea, to name one contested expanse, not as a commons but as offshore territory. Indeed, Beijing asserts “indisputable sovereignty” there.

Such pretensions grate on Southeast Asian states, while the United States hopes to rally coalitions and partnerships to oversee the commons. But if Beijing is serious about the near seas’ constituting “blue national soil” — and our Chinese friends are nothing if not sincere — then outsiders policing these waters must look like invaders. How else would you regard foreign constables or armies roaming your soil — even for praiseworthy reasons — without so much as a by-your-leave?

South China Sea claims

September 4, 2013

Air-Sea Battle as a response to Chinese military expansion

Filed under: China, Military, Pacific, USA — Tags: , , , — Nicholas @ 13:18

The Diplomat‘s Amitai Etzioni looks at the US Air-Sea Battle plan:

On the face of it, the Pentagon’s Air-Sea Battle plan makes eminently good sense; it is a clear response to a clear challenge. China has been developing a whole slew of weapons (especially anti-ship missiles) over the past two decades that are of great concern to the U.S. military. These weapons, known in Pentagon-speak as anti-access/area-denial (A2/AD) capabilities, could undermine the international right to free passage in China’s surrounding waters or, in the case of a conflict over Taiwan or contested islands in the South and East China Seas, prevent the U.S. from making good on defense commitments to its friends in the region.

In response, the Pentagon developed Air-Sea Battle (ASB), the employment of which entails, according to position papers developed to promote it, a blistering assault on China’s mainland. A report by the Center for Strategic and Budgetary Assessments (CSBA) gives a detailed account of how an ASB-style war with China would unfold. In the opening “blinding campaign,” the U.S. attacks China’s reconnaissance and command-and-control networks to degrade the PLA’s ability to target U.S. and allied forces. Next, the military takes the fight to the Chinese mainland, striking long-range anti-ship missile launchers. Given that this is where the anti-ship missiles are located, it is only logical that the U.S. would target land-based platforms. And to go after them, one of course needs to take out China’s air defense systems, command control centers, and other anti-access weapons. In short, ASB requires a total war with China.

[…]

The main flaw Air-Sea Battle it is not merely that it is a particularly aggressive military response to the anti-access/area-denial challenge. The problem is that ASB is developing in a foreign policy vacuum. If the U.S. were to conduct a thorough review of China’s military capabilities and its regional and global ambitions — and found that the Chinese were planning to forcefully expand their territory or unseat the U.S. as the global power, perhaps Air-Sea Battle might be deemed appropriate.

August 22, 2013

Chinese government philosophy in the headlines

Filed under: China, Government, Media — Tags: , , , — Nicholas @ 12:57

Jon, my former virtual landlord, sent me this link and said “Does this sort of thing really matter any more? Aren’t all governments doing this?”

Under Tocqueville’s Influence, China Chooses Despotism
Paul A. Rahe

In the last few days, the national press has been full of reports suggesting that China’s new President, Xi Jinping, is orchestrating a revival of Maoism and a crackdown on those in China who would like to introduce within that country the procedures, practices, and institutions that distinguish the West: the rule of law, constitutionalism, freedom of the press, judicial independence, civil associations, and “universal values” – which is to say, a respect for human rights. The Wall Street Journal, which broke the story on Saturday, claims that Xi is receiving strong support from former President Jiang Zemin; and on Monday The New York Times filled in some of the details:

    Communist Party cadres have filled meeting halls around China to hear a somber, secretive warning issued by senior leaders. Power could escape their grip, they have been told, unless the party eradicates seven subversive currents coursing through Chinese society.

    These seven perils were enumerated in a memo, referred to as Document No. 9, that bears the unmistakable imprimatur of Xi Jinping, China’s new top leader. The first was “Western constitutional democracy”; others included promoting “universal values” of human rights, Western-inspired notions of media independence and civic participation, ardently pro-market “neo-liberalism,” and “nihilist” criticisms of the party’s traumatic past.

    Even as Mr. Xi has sought to prepare some reforms to expose China’s economy to stronger market forces, he has undertaken a “mass line” campaign to enforce party authority that goes beyond the party’s periodic calls for discipline. The internal warnings to cadres show that Mr. Xi’s confident public face has been accompanied by fears that the party is vulnerable to an economic slowdown, public anger about corruption and challenges from liberals impatient for political change.

[…]

The evidence now suggests the contrary — that Wang Qishan is by no means alone in his convictions, that Xi Jingpin and his lieutenants take quite seriously the possibility that China is in a pre-revolutionary situation, and that they are intent on putting a lid on everything. Where Tocqueville might have suggested that the way forward was for the country’s leaders to embrace the “seven subversive currents,” to carry out a revolution from above, and to gradually introduce into the country the rule of law, constitutionalism, freedom of the press, judicial independence, civil associations, and a respect for human rights, they have decided in this year — the 120th anniversary of Chairman Mao’s birth — to return to the path he charted more than 60 years ago.

August 14, 2013

Ignore the inconsistencies in official Chinese statistics at your peril

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

It’s been a while since I reminded everyone that the official Chinese government statistics can’t be trusted. Here’s Zero Hedge on the same topic:

How Badly Flawed Is Chinese Economic Data? The Opening Bid is $1 Trillion

Baseline Chinese economic data is unreliable. Taking published National Bureau of Statistics China data on the components of consumer price inflation, I attempt to reconcile the official data to third party data. Three problems are apparent in official NBSC data on inflation.

    First, the base data on housing price inflation is manipulated. According to the NBSC, urban private housing occupants enjoyed a total price increase of only 6% between 2000 and 2011.

    Second, while renters faced cumulative price increases in excess of 50% during the same period, the NBSC classifies most Chinese households has private housing occupants making them subject to the significantly lower inflation rate.

    Third, despite beginning in the year 2000 with nearly two-thirds of Chinese households in rural areas, the NSBC applies a straight 80/20 urban/rural private housing weighting throughout our time sample. This further skews the accuracy of the final data.

To correct for these manipulative practices, I use third party and related NBSC data to better estimate the change in consumer prices in China between 2000 and 2011.

I find that using conservative assumptions about price increases the annual CPI in China by approximately 1%.

This reduces real Chinese GDP by 8-12% or more than $1 trillion in PPP terms.

Regular visitors to the blog know that I’ve been rather skeptical about the official statistics reported by Chinese government and media sources.

August 12, 2013

The controversy over Japan’s latest “destroyer”

Filed under: China, Japan, Military — Tags: , , — Nicholas @ 10:32

Apparently our eyes can deceive us. For most people looking at this image — at least if they know much about naval vessels — the description that comes to mind is “aircraft carrier”:

JS Izumo DDH-183

JS Izumo DDH-183

However, for constitutional reasons she is officially classified as a “destroyer”. In the South China Morning Post, Stefan Soesanto explains why this classification matters:

The Izumo‘s distinctive features certainly do not resemble anything one would typically classify as a destroyer. Indeed the warship currently under construction in Yokohama harbour is an aircraft carrier in anything but in name. Its size, tonnage and speed are closer to the US Essex aircraft carrier class, than to any of the two previous helicopter destroyers Japan has built so far.

At a cost of US$1.14 billion, the Izumo is officially conceptualised to host up to 14 helicopters whose missions would range from anti-submarine warfare and maritime border surveillance to humanitarian relief operations. In this regard, the Izumo‘s objectives are identical to the two Hyuga-class helicopter destroyers that were put into service in 2009 and 2011.

The current discussion among analysts and military brass as to whether Japan’s helicopter destroyers are considered aircraft carriers is not new. According to The Japan Times, Maritime Self-Defence Force chief of staff Admiral Keiji Akahoshi stated in 2009 that the Hyuga-class falls outside the conventional definition of an aircraft carrier because it lacks a fair degree of offensive functions. This argumentation has been notably employed by the Japanese government to circumvent Article 9 of the peace constitution to portray its helicopter destroyers as purely defensive military assets.

While Beijing’s criticism towards the Hyuga-class has been largely used as a means to support its own aircraft carrier expansion plans, the unveiling of the much larger Izumo has prompted widespread fears in China. Major Chinese media outlets went to great lengths to link Japan’s militaristic past to plans by the Japanese government towards constitutional revision. Indeed, the Chinese defence ministry even put out a statement saying that it is “concerned over Japan’s constant expansion of its military equipment”.

Reflecting on its own aircraft carrier plans, however, Chinese experts such as Li Daguang, professor at the National Defence University of the People’s Liberation Army, seem to make a simple leap of faith by suggesting that “the Chinese aircraft carrier Liaoning was mainly built for training purposes while the Izumo was built for real war”.

Of course, this isn’t a new thing, as a quick glance at the JS Hyūga also shouts “aircraft carrier” rather than “destroyer”:

JS Hyūga

JS Hyūga

August 6, 2013

Second Chinese aircraft carrier appears to be under construction

Filed under: China, Military — Tags: , — Nicholas @ 14:40

Strategy Page has the details:

Recent photos from a Chinese shipyard appear to show a section of a new Chinese aircraft carrier under construction. This appears to be a carrier similar to the American Nimitz class ships (100,000 ton vessels using a catapult rather than a ski jump flight deck for launching aircraft). Large ships, including warships, are often built in sections than the sections are welded and bolted together. The section of what appears to be a carrier does not indicate the exact size of the new carrier other than that it appears larger than the new carrier China commissioned at the end of 2012.

Last September China commissioned its first aircraft carrier, the Liaoning. At the time China was believed to be building the first of several locally designed aircraft carriers but the Chinese officially denied this. The only official announcements have alluded to the need for two or three aircraft carriers, in addition to the Liaoning. Construction of such large ships had not yet been seen in any shipyard. That has changed with the appearance of these new shipyard pictures.

[…]

The new Chinese “larger carrier” apparently means something like the recently decommissioned American USS Enterprise (CVN 65). This was the first nuclear powered carrier and it served as the prototype for the subsequent Nimitz class. It’s unclear if the new Chinese carrier will be nuclear powered. The Enterprise was an expensive design, and only one was built (instead of a class of six). While a bit longer than the later Nimitz class, it was lighter (92,000 tons displacement, versus 100,000 tons). The Enterprise was commissioned in 1961, almost 40 years after the first U.S. carrier (the Langley) entered service in 1923. In the two decades after the Langley there were tremendous changes in carrier aviation. While the innovation slowed after World War II, major changes continued into the 1950s (jet aircraft, nuclear propelled carriers, SAMs). But in the ensuing half century there has been no major innovation in basic carrier design. This has not been a problem because the carriers have proven useful, at least for the U.S. Navy (the only fleet to use such large carriers) and no one else has maintained a force of these large carriers. Only the U.S. has felt a constant need to get air power to any corner of the planet in a hurry. More importantly, no navy has been able to give battle to the U.S. carrier force since 1945. The Soviets built new anti-carrier weapons and made plans to use them but that war never occurred. China is building carriers but is not committed to having a lot of them to confront the U.S. but to intimidate its neighbors.

BBC News has a series of photos of the Liaoning from purchase to commissioning:


Click to see full-size images at the BBC website

Earlier reports on the progress of the Liaoning (under the name Shi Lang) can be found here.

Update: James R. Holmes on why China might be interested in becoming a 21st century naval power.

A couple of years back, when Beijing made its aircraft-carrier aspirations official, the fine folks at Foreign Policy asked me to explain why a historic land power like China cared about flattops. Being a bear of small brain, I reached into my mental bag of tricks and came up with Thucydides’ claim that fear, honor, and interest are three of the prime movers for human actions. Beijing feared U.S. containment, a relic of the Cold War; saw an opportunity to recoup honor lost during the century of humiliation at the hands of the imperial powers; and hoped to add to the naval power it was amassing to advance China’s interests in maritime Asia.

What’s changed since then? Fear and honor are emotional needs. It may be that sending the carrier Liaoning (formerly the Soviet Varyag) to sea helped satisfy China’s need to banish bad cultural memories. But who knows when fear will be at bay? The United States and its allies have ruled the sea in East Asia long enough that their navies may inspire fears disproportionate to their actual margin of supremacy. Or, the Chinese leadership may see value in protesting too loudly, and thus making Western powers fearful of creating a self-fulfilling prophecy, namely Sino-American antagonism.

Most importantly, it may be that having ameliorated anxieties arising from honor and fear grants Beijing the luxury of operating mostly from calculations of interest. Simply deploying a carrier, Liaoning, may forestall fears while satisfying Chinese society’s desire for a capability that every other great power enjoys.

July 27, 2013

Jiangsu might as well be the Chinese name for Detroit

Filed under: China, Economics — Tags: , , , , — Nicholas @ 11:02

The South China Morning Post on the economic troubles of the provincial, municipal and local authorities in Jiangsu:

The nightmare scenario for China’s leaders as they try to wean the country off a diet of easy credit and breakneck expansion is a local government buckling under the weight of its own debt. Few provinces fit that bill quite like Jiangsu, home to China’s most indebted local government.

Hefty borrowings through banks, investment trusts and the bond market by Jiangsu’s provincial, city and county governments have saddled the province north of Shanghai with debt far higher than its peers, public records show.

Many of the province’s mainstay industries, including shipbuilding and the manufacturer of solar panels, are drowning in overcapacity. Profits are dwindling, and the government’s tax growth is braking hard.

[…]

Little public information is available on the total debt of Chinese local governments. Indeed, earlier this month China’s Vice-Finance Minister Zhu Guangyao said Beijing did not know the precise level of their debts either.

But from what ratings agencies and think-tanks can piece together, Jiangsu may be the standout debt risk among China’s 31 provinces.

Looking at bank loan books, they can see that China’s eastern provinces including Jiangsu have the highest concentration of government debt. Jiangsu then looms large because of its reliance on costlier and alternative forms of financing, which they said suggested that cheaper bank loans and land sales are not giving the authorities the funding they need.

The risk that Jiangsu might pose to the Chinese economy in a crisis is clear. On its own, the province would be a top 20 global economy with GDP greater than G20 member Turkey. Its 79 million population tops that of most European countries.

July 18, 2013

Chinese museum woes – “80 of the museum’s 40,000 objects had been confirmed as authentic”

Filed under: China, History — Tags: , , , , — Nicholas @ 09:22

Tom Phillips on the sudden closure of the Jibaozhai Museum:

The museum’s public humiliation began earlier this month when Ma Boyong, a Chinese writer, noticed a series of inexplicable discrepancies during a visit and posted his findings online.

Among the most striking errors were artifacts engraved with writing purportedly showing that they dated back more than 4,000 years to the times of China’s Yellow Emperor. However, according to a report in the Shanghai Daily the writing appeared in simplified Chinese characters, which only came into widespread use in the 20th century.

The collection also contained a “Tang Dynasty” five-colour porcelain vase despite the fact that this technique was only invented hundreds of years later, during the Ming Dynasty.

Museum staff tried to play down the scandal.

Wei Yingjun, the museum’s chief consultant, conceded the museum did not have the proper provincial authorizations to operate but said he was “quite positive” that at least 80 of the museum’s 40,000 objects had been confirmed as authentic.

“I’m positive that we do have authentic items in the museum. There might be fake items too but we would need [to carry out] identification and verification [to confirm that],” he told The Daily Telegraph.

Mr Wei said that objects of “dubious” origin had been “marked very clearly” so as not to mislead visitors and vowed to sue Mr Ma, the whistle-blowing writer, for blackening the museum’s name.

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