“Development is the only hard truth,” Deng claimed. “If we do not develop, then we will be bullied.” Speaking of the “China Dream,” the new Chinese leader, Xi Jinping, upholds the same imperatives of national unity, strength and pride against the need for broad democratic reforms.

And he may be right to think he has a receptive audience. Soothsayers have been predicting the collapse of the Chinese regime for decades. In recent years, they have transferred their hopes onto the main beneficiaries of China’s economic growth: the middle classes. Last year’s leadership transition generated much wild talk about imminent revolution.

But China’s middle classes seem too fragmented to mount an effective political movement, let alone spark a revolution. And to many Chinese left behind by economic growth, the remote apparatchiks in Beijing may appear more committed to their welfare than an affluent minority devoted to further self-enrichment. [Source]

While Mishra addresses the link between economic growth and political liberalization, Martin King Whyte recently questioned the relationship between economic equality and political stability, arguing that the uneven distribution of power, not wealth, is the most likely source of unrest in China.

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Post tags: Chinese Dream, democracy, Deng Xiaoping, development, economic growth, liberalism, liberals, middle class, political reform, Xi Jinping
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Liu He, who leads the party’s Central Leading Group on Financial and Economic Affairs, has been given the task of preparing a seven-point blueprint for the Third Plenum of the 18th Communist Party Congress, which is due in about October, according to a source with close ties to several members of the Politburo Standing Committee.

If executed as intended, the new reform program would go some way to answering doubts about whether China can continue underwriting the Australian economy, including huge gas and other resource investment plans over the next decade.

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Some hedge fund managers say China’s has reached a “zugzwang” moment, referring to the predicament when a chess player must make a move but prefers to pass.

“In China policy is made when the pain of inaction is higher than the pain of action, and we’ve reached that point,” said David Hoffman, managing director of the Conference Board China Centre for Economics and Business.

[Source]

China reported disappointing first quarter GDP growth of 7.7 percent last month, as slumping factory output and soft consumption pulled the economy back from the 7.9% growth figure posted in the final quarter of 2012. But while TIME’s Michael Schuman wrote that “China’s growth model is broken and can’t be so easily fixed,” emerging markets investor Mark Mobius told the Vancouver Sun last week that concerns over China’s economic slowdown are overblown:

Q. The most recent news we’ve seen from China has focused on lower inflation and a slowdown in their economy. How much does what goes on in China weigh on the overall emerging markets sector?

A. It has an impact in Asia, of course, because you’ve seen more and more trade and investment between China and the rest of Asia. (But) China is just one part of the whole equation. Because you’ve got a huge Indian economy, you’ve got a very big Brazilian economy, a big Russian economy, the so-called BRICS. Then you’ve got Indonesia, you’ve got Thailand, many other countries that are doing quite well, and are having an impact on what’s happening around the world.

Q. What are we missing (in Canada) by focusing so much on China and the appearance of their slowdown?

A. First of all, the slowdown is kind of a misnomer because if somebody goes from 12-per-cent growth to eight-per-cent growth and they are the second largest economy in the world, that’s not a big, big problem, because they’re growing at a rapid rate. At eight per cent, in a huge economy, the actual dollar amount of increment is greater than it was five years ago.

[Source]

BBC’s chief business correspondent Linda Yueh wrote this weekend that while the services sector has grown more rapidly than other parts of the Chinese economy this year, concerns still linger:

One worry expressed to me about rebalancing towards services and focusing on consumers came from one of China’s best-known economists and the former World Bank chief economist, Justin Yifu Lin of Peking University.

He stresses that consumption should not be pursued for its own sake. The bursting of the credit bubble in America makes that point vividly. Instead, he says, consumption supported by income growth, not borrowing, is key.

He also points out that it’s not exports which are the important factor for future growth, but more government spending and investment for productive uses.

It’s all about finding the right balance. China’s economy is now fairly equally driven by services and industry, while maintaining its position as the world’s largest exporter of goods. Manufacturing is growing and not declining. China is not giving up on exports, it’s simply becoming more balanced.

[Source]

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Post tags: 18th party congress, economic growth, economic reform, emerging markets, GDP, Politburo Standing Committee
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In March, China completed its transition to a new leadership team. The usual fanfare — masses of black limousines bringing nearly 3000 delegates to the Great Hall of the People to hear proud speeches about the country’s three decades of economic growth and waxing international influence — was dampened by a sense that, by the next time the party comes to town, there might not be as much to celebrate. Xi Jinping, the new leader of the Chinese Communist Party, and his colleagues have repeatedly expressed alarm at increasing social protests. According to confidential but widely circulated Chinese police estimates, there are now about 180,000 mass protest incidents each year, roughly 20 times more than there were in the mid-1990s. China’s leaders portray the surge of protests as fueled by popular outrage over the yawning gap between rich and poor — a chasm that the leaders have spent a decade trying to close. In reality, though, Chinese citizens are angry about a different gap: the one between the powerful and the powerless. The CCP has turned a blind eye toward this problem. Unless the situation changes and China’s new leaders start finding ways to temper popular outrage over procedural injustices and official corruption, the prospect that they will maintain political order until the next leadership transition is bleak.

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Who are China’s environmentalists? How would you characterize today’s green advocates?

Journalists and broadcasters founded many of China’s most prominent green NGOs—after all, they witnessed the scale of the unfolding environmental crisis. China actually has a long history of civil society, which was suppressed during the Mao era. But the past 20 years have seen a flourishing of green NGOs. Now there are thousands registered, and many more unregistered. Today all sorts of people get involved in China’s environmental campaigns, from university students and middle-class urban residents protesting against the construction of polluting petrochemical factories or incinerators, to villagers in the countryside angry about pollution ruining their crops and their health.

[…] Why is public participation in environmental issues so important for China?

Without the public pressure to act responsibly, local officials will continue to chase short-term economic gains and disregard environmental concerns. A greener society needs journalists who can expose environmental problems, NGOs who can lobby for conservation measures, and lawyers who can represent communities that have been affected by pollution. That’s why citizens have been at the forefront of China’s environmental movement.

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Post tags: Chinadialogue, civil society, economic growth, environmental activism, incinerators, journalists, lawyers, local officials, middle class, NGOs, pollution, university students, villagers
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The extent of the risk from local government debt has been a topic of hot debate. It is hard to tell when, where and how it could destabilise the system, given the opacity of government operations. Some analysts are worried about the sluggish growth of government revenues. Meanwhile, many people both in and outside the government believe the risk of default is low because the central government would pick up the pieces if things go wrong.

This view is mistaken. The central government is not obliged to guarantee local government debt.

Besides, with the economy slowing and the growth of fiscal revenue also easing, the central government may in fact have no ability to bear the burden of debt in case of a systemic meltdown. The debt will instead be monetised, and the people will have to foot the bill. This is China’s own subprime mortgage crisis in the making.

The credit rating agencies aren’t alone in their worries – A senior Chinese auditor warned this week that local government debt is “out of control,” according to the Financial Times. And Reuters reports that Stephen Green, a research analyst for Standard Chartered in Hong Kong, wrote a research note describing a recent meeting with the manager of a local government financing vehicle (LGFV) in a second-tier city:

“We asked how they got a bank loan, given that they were primarily engaged in a public infrastructure project. To this, the indignant finance manager replied that they were not an LGIV,” Green wrote, using an alternate acronym for LGFV.

“The consequence is that some of the ‘corporate’ leverage we estimate above should probably be moved to the government’s balance sheet. But we have no idea how much,” Green wrote.

In reality, the scale of local government debt may not simply be unknown, but also unknowable, at least at the moment.

Official statements over the last year suggest that even the government itself hasn’t yet decided which debt it will treat as sovereign obligations in the event that an LGFV lacks the ability to service its own debt.

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Post tags: credit rating, debt crisis, economic growth, local government debt, Moody's
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About 1.2 billion people in the world lived in extreme poverty in 2010, subsisting on less than $1.25 a day [in 2005 PPP U.S. dollars]. That’s down from 1.9 billion three decades ago despite a nearly 60% increase in the developing world’s population.

[…] The sharpest decline came in China, where the extreme poverty rate fell to 12% in 2010 from 84% in 1981. India’s extreme poverty dropped to 33% of the population from 60% three decades ago.

[…] More than three-fourths of the world’s 1.2 billion poorest people live in rural areas, the bank said in a separate report Wednesday. Urbanization has been a key driver in reducing extreme poverty. About half the world’s total population now lives in rural areas.

China’s share of the world’s extremely poor population also fell from 43% in 1981 to 13% in 2010. Despite the country’s overall population growth of over 300 million during this time, the number of Chinese living in extreme poverty crashed from 835 million to 156 million people. Life expectancy at birth climbed from 67.8 to 74.8 over the same period from just 35 in 1949, according to China’s Ministry of Health and National Bureau of Statistics.

Earlier this month, World Bank president Jim Yong Kim called for an international effort to bring the global extreme poverty rate below 3% by 2030.

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Many investors had anticipated a possible surprise on the upside, with growth faster than the consensus, after a surge in liquidity in the economy during the first quarter and an uptick in export growth.

The liquidity and export data had encouraged expectations that growth would accelerate again in the first quarter, after snapping seven straight quarters of weakening expansion in the previous quarter thanks to policy action to put momentum back in the economy.

“This number may well explain my there was so much liquidity support in Q1,” Tim Condon, head of Asian economic research at ING in Singapore, told Reuters.

“Industrial production is unexpectedly weak and that’s the source of weakness in GDP. Based on this, the consensus GDP forecasts are going to be headed lower and we’ll certainly be looking at ours.”

Slumping factory output and soft consumption proved the biggest headwinds, report Simon Rabinovitch and Jamil Anderlini of The Financial Times, as the economy pulled back from the 7.9% figure posted in the fourth quarter of 2012. One economist told The Wall Street Journal that “overall these figures are pretty weak,” and said the data reduced the likelihood that the Chinese government would tighten monetary policy. A spokesman for the statistics bureau, however, said that the lower-than-expected growth figure should not cause alarm. From The New York Times:

“Over all in the first quarter the economy had a steady start and has advanced in a stable way,” Mr. Sheng said at a news conference in Beijing. “Generally, it’s operating within the range of 7.4 percent to 7.9 percent — that is, steady growth.”

China’s industrialization and urbanization would remain powerful engines for relatively rapid growth, Mr. Sheng said.

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Post tags: economic growth, economic recovery, GDP, GDP growth, manufacturing, monetary policy, National Bureau of Statistics
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The dangers of China’s environmental degradation go well beyond the country’s borders, as pollution threatens global health more than ever. Chinese leaders have argued that their country has the right to pollute, claiming that, as a developing nation, it cannot sacrifice economic growth for the sake of the environment. In reality, however, China is holding the rest of the world hostage — and undermining its own prosperity.

[…] The economic costs of pollution have been the focus of various government-backed studies in China. A recent study by the Chinese Academy of Environmental Planning found that environmental damage to forests, wetlands, and grasslands shaved 3.5 percent off China’s 2012 GDP. The World Bank puts the total cost of China’s environmental degradation in the late 1990s at between 3.5 and 8 percent of GDP. China’s pollution problem is holding back its economy — and poisoning its own people and the rest of the world in the process. The international community should push China to realize that if it continues to ravage the environment, it will be unable to secure its future health and prosperity — or avoid a global disaster.

Xi Jinping signaled a shift in the balance of priorities earlier this week. From Andrew Browne and Carlos Tejada at The Wall Street Journal:

Speaking before business leaders at the Boao Forum for Asia in southern China on Monday, Mr. Xi said “it’s not impossible to grow faster,” but added, “we don’t want to grow too fast.”

“I don’t think China can sustain super-high or ultra-high-speed growth,” he said, citing the need to balance economic growth with other issues. He said China’s slowdown last year to 7.8% economic growth is “partially due to our efforts to control the speed of growth.”

[…] Speaking at a roundtable discussion with Asian and global business leaders at the Boao forum, Mr. Xi said China will sustain “relatively high” growth but will also look at fostering green development. “Realizing those goals will bring vitality and strength to China’s economy,” he said.

But at Economic Observer, Chen Yongjie of the China Center for International Economic Exchanges argued that based on projections of future energy consumption and carbon emissions, China’s economy must slow further still:

There is a chance that China’s new leaders may start to take environmental problems seriously, having even set the construction of an ecological civilization as one of its five national priorities. However in the face of the severe haze we see every day, China has to dig even deeper.

[…] China has to effectively reduce the pace of its development, aiming to keep its overall economic growth below 7 percent between now and 2014; and during its “13th Five-Year Plan” (2015-2020), growth should be kept under 6 percent.

It’s only by reducing the speed of China’s economic growth that we can reduce excessive resource extraction and curb high pollution emissions. Only by reducing the over-consumption of resources and the amount of pollution can China protect and save itself, and the world as well.

The problem is compounded by China’s heavy reliance on coal, often labeled the dirtiest of the fossil fuels. “Even if China’s economy slowed to 5% growth each year,” wrote Lily Kuo at Quartz last month, describing a Deutsche Bank report on the relationship between environment and economy, “its annual coal consumption would still rise to 6 billion tons (5.4 tonnes) by 2022, from the current 3.8 billion tons.” At chinadialogue, Greenpeace’s Li Shuo and Lauri Myllyvirta illustrated the scale of China’s coal dependence:

A quick flick through China’s energy statistics book tells us just how coal-addicted Beijing’s neighbours are. In 2011, Shandong and Hebei collectively consumed nearly 700 million tonnes of coal, making them the first and fourth biggest consumers among China’s provinces. Each burned through more coal than Germany, Europe’s largest economy, and together they exceeded India’s total coal consumption. Putting it another way, more coal is consumed within 600 kilometres of China’s capital than in the entire United States.

[…] Two pathways are unfolding in front of China’s policymakers. The path of unbridled, unsustainable GDP growth at all costs that ignores the health of its citizens, or a greener, cleaner kind of growth powered by smart investments in new energy, and guided by effective environmental policies and practices. As the nation’s renowned respiratory expert Zhong Nanshan bluntly put it on the sidelines of the parliamentary meetings last month: “When people’s health is at risk, how can we still put GDP first?”

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Post tags: carbon footprint, coal, coal power, economic growth, energy consumption, environmental degradation, GDP growth, hebei, pollution, Shandong, Xi Jinping
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Trust companies and brokerages probably aren’t buying many bad loans directly, analysts and industry executives say, but they have become a vital source of credit, allowing banks to arrange off-balance-sheet refinancing for maturing loans that risky borrowers cannot repay from their internal cash flow.

Without these institutions, the amount of NPLs might have been much higher, though no one is quite sure how high.

Trust assets increased 55 percent in 2012 to 7.5 trillion yuan ($1.21 trillion), according to the China Trustee Association, while funds entrusted to brokerages by banks soared more than fivefold to 1.61 trillion yuan.

“There is absolutely an impact on NPL figures from the ability to offload stuff through these channels,” said Charlene Chu, China banks analyst for Fitch Ratings.

China’s informal credit market grew for years under the cover of strong economic growth, but began to attract concern as Beijing tightened funding for state-run banks amid the global financial crisis. The Zhejiang city of Wenzhou in particular served as an example of China’s growing credit woes, as some cash-strapped entrepreneurs who had turned to the shadow lending market went into hiding or even committed suicide.

With on-balance sheet lending shrinking as a piece of the overall liquidity pie, China’s banking regulator has sought ways to limit the scope of the shadow lending market and hold banks more accountable for such arrangements. But Kate Mackenzie of the Financial Times questioned last week whether the most recent regulations would accomplish anything, and Bloomberg reported last month that a pilot program in Wenzhou has clearly not worked:

“We made some efforts and progress, but we didn’t achieve any meaningful breakthroughs,” said Zhou Dewen, chairman of the Wenzhou Small and Medium-Sized Enterprises Development Association, which has more than 1,000 members. “To reform means to take bold moves and not be afraid of making mistakes, but no government officials are willing to put their jobs on the line. If they could feel the pain of small businesses, they may understand that Wenzhou is running out of time.”

Former Premier Wen Jiabao announced the project last year after more than 80 businessmen, unable to make payments on underground loans, committed suicide or declared bankruptcy in Wenzhou over a six-month period. The plan was approved by the State Council on March 28, 2012. At the National People’s Congress in Beijing this month, where Li Keqiang took over the premiership, no top government leader mentioned the program or any measures to curtail shadow banking.

Of 12 measures proposed by Wen, only two — the opening of the registration center and allowing qualified small firms to issue bonds — have gotten off the ground. While officials in other Chinese cities have indicated a desire to copy Wenzhou’s lending center, none has.

Not everyone is as spooked by China’s shadow lending system, however, writes Forbes’ Kenneth Rapoza:

“Is it a problem? Yes and no is the answer,” said Milligan. “And that is because we want sustainable companies in China that we can sell to. The downside is that their financing in some cases is an unknown. A lot of the money invested is going into large holes in the ground. That’s money wasted. There is some evidence that the usual pattern of these loans is they find their way to the central government and the debts get rolled over by the local municipal banking system. I don’t think it is worrisome yet because China is perfectly able to manage the situation,” he said, adding “at the moment.”

…

China’s off balance sheet debts could, in theory, implode. Pension funds could have been set up to invest in non-returning assets. Companies could be throwing money into a black hole in peer to peer lending.

But overall, China’s official, and much larger, banking system is relatively sound. Non-performing loans account for less than 1% of the total lending portfolio. In Brazil, it is more like 4.5%.

…

“We should use the word ‘shadow’ with a bit of caution,” said Milligan. “This is actually a service of a bunch of concentric circles that are mostly known to the government. There is a lot of data in China. This is not an underground system trying to be hidden from view. The Central Bank is starting to piece things together,” he said.

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Post tags: banks, China Banking Regulatory Commission, debt crisis, economic growth, global financial crisis, shadow lending
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Q: If the Chinese government forces global companies into unfair joint ventures and even allows such vast intellectual-property theft, why do the multinationals put up with that?

A: Simple answer: growth. China has been the only significant global growth market since the global financial crisis. The country is spending trillions of dollars on infrastructure, including bullet trains, subway systems, nuclear power plants, airports, seaports, refineries, electric grid — the list goes on and on. If you are in the business of transportation, power generation, aviation, telecommunications, computing or logistics, among others, if you don’t make it in China you won’t make it anywhere.

Q: Westerners doing business in China are often advised not to engage in public fights with the Chinese authorities; that negotiating quietly, behind closed doors, is the better option. Is that still the case, or is your book suggesting that bolder, more confrontational tactics are necessary?

A: Companies that individually and publicly take on China face the wrath of China Inc. But those who band together behind trade associations and government forums stand a better chance. It is always better to try to work out things behind closed doors. But only if China is willing to listen. Today, that is often not the case. The global financial crisis caused a significant shift in thinking by many in the government. For many years, foreign companies that invested in China were looked at as friends who were helping China. There are many in China now who believe that the foreigners need China more than China needs the foreigners. So they often don’t feel a need to engage even behind closed doors.

See also “two obvious questions” asked about China’s unfriendly business environment by longtime China Hand and Forbes’ contributor Janet Carmosky, via CDT.

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Post tags: capitalism, china hands, economic growth, state-owned enterprises, U.S. China business competition
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After three decades of the kind of rapid economic growth that does not allow much time for contemplation, business leaders in China are turning to executive M.B.A.’s for a greater understanding of the global business world, how to be better corporate leaders and, increasingly, what to do after they have succeeded.

Twenty years ago, management education in China barely existed. While the first M.B.A. in the world was offered by Harvard University in 1908, it was not until 1991 that China introduced its own M.B.A. programs at a handful of schools. It took several more years for the first executive M.B.A. programs to open.

Today, China has 62 business schools offering executive M.B.A.’s to more than 8,000 students a year.

“At present, China’s executive M.B.A. education can hardly meet the huge demands of senior management talents due to China’s fast economic growth,” said Lu Xiongwen, the dean of the School of Management at Fudan University in Shanghai.

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Post tags: business school, economic growth, executive MBA, higher education
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In 2001, China’s GDP was equal to the GDP of all the RIBS combined. In the five years since the global financial crisis, just the increment of growth in China’s economy is larger than the entire economies of Russia and India combined. Indeed, in the half decade since the financial crisis, 40 percent of all growth in the global economy has occurred in China.

[…] Concepts that jumble together elements with more differences than similarities sow confusion. While it may have played a useful purpose at the beginning of the century to highlight faster-growing emerging economies, BRICS has become an analytic liability. Like generalizations about per-capita growth in countries where wealth disparities are widening (as the rich get richer while the income of the poor declines), submerging China in this acronym misses more than it captures. If a banner is required for a meeting of these five nations, or for a forecast about their economic and political weight in the world ahead, RIBS is much closer to the reality. Even if governments, investment banks, and newspapers keep using BRICS, thoughtful readers will think China and the rest.

But while China may have little in common with the RIBS economically, Beijing still appears to see political utility in BRICS membership. From Yun Sun at Brookings:

Xi’s first overseas trip reveals the international quagmire China is in. The past 10 years witnessed unprecedented growth of Chinese economy, but it was also accompanied by unparalleled foreign policy challenges. As many Chinese analysts observed, China’s external environment did not improve as a result of China’s rise, instead, it has worsened. China has become richer, but less respected. It has more transactions with the world than ever, but less friends.

Therefore, Xi’s trip to Russia, Africa and the BRICS summit genuinely reflects China’s strategic moves to break away from this predicament. It seeks to reconsolidate friendship with a Russia also antagonized by the West, with Africa to reinforce its developing-country identity and solidarity with the developing world, and with other emerging economies to align their collective power against the traditional developed countries. China learned its lesson that it is yet to be strong enough to challenge the existing international order (and the supremacy of the U.S.) alone. Alignment with other rising powers, like the BRICS countries, and reinforcement of its friendship base among developing countries will be a new emphasis for China’s foreign policy in the foreseeable future.

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Post tags: Africa, Brazil, BRIC, BRICS, economic growth, financial crisis, India, Russia, South Africa
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Consumer prices rose 3.2% from a year earlier, with food prices up by 6%.

Inflation has been a hot political issue in China. There have been concerns that if consumer prices rise too much, it may prompt Beijing to tighten monetary policies, which in turn may hurt China’s growth.

However, analysts said the latest data was unlikely to prompt any such moves.

They argued that the price growth was driven mainly by the Lunar New Year celebrations, which are traditionally associated with an increase in consumer spending.

But a report from Reuters argues that prices have stayed high even after the end of the Spring Festival holiday season and that urbanization is largely to blame:

Retail beef prices in Beijing city markets are higher compared with supermarkets in the Boston area. Pork, China’s staple meat, is only about 50 cents per kilogram, or 23 cents a pound, below the U.S. price, a Reuters comparison of standard retail prices show. Those prices represent a direct hit on the spending power of Chinese, whose average income is about a 10th the size of Americans’ salaries.

Contributing to food production costs are the loss of farmland and farm labor to urbanization — Chinese cities are swelling as they absorb hundreds of millions of people.

Grazing restrictions because of land degradation are also causing costs to rise across the country.

“The more the economy develops, the harder it is to raise calves,” said Wang Jimin, who tracks cattle trends for the Chinese Academy of Agricultural Science’s Rural Economic Development Institute. “In the short term, I don’t see meat prices falling unless there are a lot of imports.”

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Without traditional family or social networks, many men and women have taken their searches online, where thousands of dating and marriage Web sites have sprung up in an industry that analysts predict will soon surpass $300 million annually. These sites cater mainly to China’s millions of white-collar workers. But intense competition, along with mistrust of potential mates’ online claims, has spurred a growing number of singles — rich and poor — to turn to more hands-on matchmaking services.

China’s matchmaking tradition stretches back more than 2,000 years, to the first imperial marriage broker in the late Zhou dynasty. The goal of matchmakers ever since has usually been to pair families of equal stature for the greater social good. Today, however, matchmaking has warped into a commercial free-for-all in which marriage is often viewed as an opportunity to leap up the social ladder or to proclaim one’s arrival at the top.

Single men have a hard time making the list if they don’t own a house or an apartment, which in cities like Beijing are extremely expensive. And despite the gender imbalance, Chinese women face intense pressure to be married before the age of 28, lest they be rejected and stigmatized as “leftover women.”

Dozens of high-end matchmaking services have sprung up in China in the last five years, charging big fees to find and to vet prospective spouses for wealthy clients. Their methods can turn into gaudy spectacle. One firm transported 200 would-be trophy wives to a resort town in southwestern China for the perusal of one powerful magnate. Another organized a caravan of BMWs for rich businessmen to find young wives in Sichuan Province. Diamond Love, among the largest love-hunting services, sponsored a matchmaking event in 2009 where 21 men each paid a $15,000 entrance fee.

Matchmaking in China has also extended to the afterlife, according to the South China Morning Post, which reported last week that a Chinese court jailed four men for selling corpses on the black market to enable so-called “ghost marriages:”

On Saturday, the Xi’an Evening News reported that the Yanchuan county court in Yan’an City, Shanxi province, sentenced each of the men to more than two years in prison for stealing 10 female corpses, cleaning them up and counterfeiting their medical records to boost their prices, and selling them on the black market for a total of GBP25,000.

Ritual ghost marriages, which may date back to the 17th century BC, are increasingly rare in contemporary China – Mao Zedong tried to eliminate them when he assumed power in 1949 – but they are still practised in rural parts of Shaanxi, Shanxi, Henan, Hebei and Guangdong provinces. Families often employ a matchmaker to help find a suitable spouse for their deceased loved ones.

The four men, with surnames Pang, Bai, He and Zhang, exhumed the corpses in the winter of 2011 from a smattering of arid, coal-rich counties in Shanxi and Shaanxi provinces.

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Post tags: economic growth, ghost marriages, love hunters, marriage, matchmaking, social networks
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The need to see China fail verges on jingoism. Americans distrust the Chinese model, find that its business practices verge on the immoral  and illegal, that its reporting and accounting standards are sub-par at  best and that its system is one of crony capitalism run by crony  communists. On Wall Street, the presumption usually seems to be that any Chinese company is a ponzi scheme masquerading as a viable business. In various conversations and debates, I have rarely heard China’s economic model mentioned without disdain. Take, as just one example, Gordon Chang in Forbes: “Beijing’s technocrats can postpone a reckoning, but they have not repealed the laws of economics. There will be a crash.”

The consequences of a Chinese collapse, however, would be severe for  the United States and for the world. There could be no major Chinese  contraction without a concomitant contraction in the United States. That would mean sharply curtailed Chinese purchases of U.S. Treasury bonds,  far less revenue for companies like General Motors, Nike, KFC and Apple  that have robust business in China (Apple made $6.83 billion in the fourth quarter of 2012, up from $4.08 billion a year prior), and far fewer Chinese imports of  high-end goods from American and Asian companies. It would also mean a  collapse of Chinese imports of materials such as copper, which would in turn harm economic growth in emerging countries that continue to be a  prime market for American, Asian and European goods.[...]

[...]Suspicion and antipathy [...] are not constructive. They speak to the ongoing difficulty China poses to Americans’ sense of global  economic dominance and to the belief in the superiority of free-market  capitalism to China’s state-managed capitalism. The U.S. system may  prove to be more resilient over time; it has certainly proven successful to date. Its success does not require China’s failure, nor will China’s success invalidate the American model. For our own self-interest we  should be rooting for their efforts, and not jingoistically wishing for  them to fail.

© josh rudolph for China Digital Times (CDT), 2013. | Permalink | No comment | Add to del.icio.us
Post tags: bonds, business, economic downturn, economic growth, economists, free market, imports, U.S. Treasury, Wall Street
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