In the Year of the Snake, Challenges for the Chinese Economy

New York Times Deal Book By FEBRUARY 19, 2013, 12:54PM BY BILL BISHOP

 

China is back to work after a week long holiday to celebrate the Chinese New Year. Most business shut for the entire week and the scale of human migration was awesome. This year, the Chinese made 440 million trips during the lunar holiday.

Chinese people spend a lot of money during this period, shoot off a lot of fireworks and increasingly travel overseas. Retail sales in the period were $86 billion, up 14.7 percent from last year though the growth rate was down from 16.7 percent pace in 2012. The government’s frugality campaign may be to blame, as well as the increase in foreign travel. China UnionPay reported that overseas bank card transactions increased 33 percent from last year.

 

Firework sales were off 45 percent in Beijing this year. This was my seventh consecutive Spring Festival in Beijing, and while there were still a lot of explosions, the pyrotechnics were noticeably more restrained than in prior years. The good news is that “no deaths or cases of eyeball extraction were reported” in Beijing and fireworks-induced air pollution was relatively light.

We are now in the Year of the Snake. Snake years unfortunately may be bad for stocks. According to Sam Stovall, chief equity strategist at S&P Capital IQ:

Since 1900, the S.&P. 500 posted its only average calendar-year decline during the Year of the Snake, falling 3.8 percent, and rising in price just 33 percent of the time, which was the worst price performance and frequency of advance of all 12 years.

 

THE CHINESE STOCK MARKETS reopened Monday to a small gain but on Tuesday dropped the most in five weeks. The proximate cause of Tuesday’s decline was a report that Beijing is so concerned by the resurgent property market it may impose additional real estate restrictions between now and the annual meeting of the National People’s Congress in early March. The markets here have had a good run since December and a few of my punter friends have decided to take some profits.

 

This column has repeatedly noted the doubts about the reliability of Chinese economic statistics. Stephen Green of Standard Chartered has published a new report in which he questions the official gross domestic product data for the last two years. Mr. Green writes:

Our guesstimates for the past two years look considerably weaker than the official estimates: our guesstimates for 2011 and 2012 are 7.2% and 5.5%, respectively, compared with the official prints of 9.3% and 7.3%.

 

Most economists still seem to believe China’s G.D.P. growth rate is closer to the official figures. In early February, an official of the Reserve Bank of Australia gave a speech titled “Reflections on China and Mining Investment in Australia” in which he said that China’s G.D.P. growth has stabilized around 8 percent. Australia’s economy is heavily dependent on China, and the Australian central bank still maintains a relatively bullish view about China’s future demand for commodities.

 

The stakes are high, especially for economies like Australia that are heavily reliant on commodities exports to China. One observer argues that at least in the short-term, Chinese commodity demand will be strong, maybe not because the Chinese economy is “healthy” but rather because total lending in January 2013 grew 15 percent faster than it did at the peak of China’s credit boom in 2009.

 

PERHAPS THE MOST IMPORTANT CHALLENGE for the Chinese economy is how quickly it can rebalance from credit to consumption-driven growth. Michael Pettis, a Wall Street refugee who teaches at Peking University, has been one of the most prominent foreign voices on this topic. He has just written a new book, “The Great Rebalancing: Trade, Conflict, and the Perilous Road Ahead for the World Economy,” and is now giving interviews on his book tour, including “weaning China off credit-fueled growth” and how to spot early signs of economic reform.

 

Eswar Prasad, a former International Monetary Fund official with responsibility for China, seems a bit more optimistic than Mr. Pettis about the rebalancing efforts and wrote on Tuesday that Beijing was making progress toward rebalancing:

New data suggest that it is time to revise the view that China’s growth is driven largely by exports and investment. Private and government consumption together accounted for more than half of China’s output growth in 2011-12, signaling a big shift in the composition of domestic demand. Physical capital investment, the main driver of growth over the previous decade, is no longer the dominant contributor to growth. As for exports, a shrinking trade balance has in fact dragged down growth these past two years.

 

In January, an “airpocalypse” across much of China led to plenty of hacking coughs, including for yours truly. But a different kind of hacking in China is noticeable in February.

 

BusinessWeek Magazine’s cover article last week was “A Chinese Hacker’s Identity Unmasked.” On Tuesday, The New York Times reported on its front page that “China’s Army Is Seen as Tied to Hacking Against U.S.” The Chinese government responded that it opposes the hacking allegations.

A week ago, President Obama signed an executive order about protection against cyber attacks, and according to The New York Times article, “The United States government is planning to begin a more aggressive defense against Chinese hacking groups, starting on Tuesday.”

 

The article does not specify what is entailed in a more aggressive defense, but if the United States wants concrete results then naming and shaming people and groups in China may be just one piece of a much broader response.

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Fri

13

Nov

2015

Are Languages Products of their Environment?


shutterstock_222422665_151112


DISCOVER MAGAZINE published this very interesting article: 


  Languages Are Products of Their Environments


The characteristics that make each language unique may actually be adaptations to the acoustics of different environments.

2 Comments

Tue

03

Jun

2014

The Case for Reparations

 

The Case for Reparations

 

Two hundred fifty years of slavery. Ninety years of Jim Crow. Sixty years of separate but equal. Thirty-five years of racist housing policy. Until we reckon with our compounding moral debts, America will never be whole.

 

By Ta-Nehisi Coates

May 21, 2014

 


Chapters

  1. I. “So That’s Just One Of My Losses”
  2. II.  “A Difference of Kind, Not Degree”
  3. III. “We Inherit Our Ample Patrimony”
  4. IV. “The Ills That Slavery Frees Us From”
  5. V. The Quiet Plunder
  6. VI. Making The Second Ghetto
  7. VII. “A Lot Of People Fell By The Way”
  8. VIII. “Negro Poverty is not White Poverty”
  9. IX. Toward A New Country
  10. X. “There Will Be No ‘Reparations’ From Germany”
0 Comments

Mon

02

Jun

2014

A Look At 19th Century Children In The USA

PHILADELPHIA — DINNER with your children in 19th-century America often required some self-control. Berry stains in your daughter’s hair? Good for her. Raccoon bites running up your boy’s arms? Bet he had an interesting day.

 

As this year’s summer vacation begins, many parents contemplate how to rein in their kids. But there was a time when Americans pushed in the opposite direction, preserved in Mark Twain’s cat-swinging scamps. Parents back then encouraged kids to get some wildness out of their system, to express the republic’s revolutionary values.

The New York Times

Sunday Review

By JON GRINSPAN MAY 31, 2014

 

A late 19th century family taking a stroll down a set of railroad tracks
A late 19th century family taking a stroll down a set of railroad tracks

American children of the 19th century had a reputation. Returning British visitors reported on American kids who showed no respect, who swore and fought, who appeared — at age 10 — “calling for liquor at the bar, or puffing a cigar in the streets,” as one wrote. There were really no children in 19th-century America, travelers often claimed, only “small stuck-up caricatures of men and women.”

 

This was not a “carefree” nation, too rough-hewed to teach proper manners; adults deliberately chose to express new values by raising “go-ahead” boys and girls. The result mixed democracy and mob rule, assertiveness and cruelty, sudden freedom and strict boundaries. Visitors noted how American fathers would brag that their disobedient children were actually “young republicans,” liberated from old hierarchies. Children were still expected to be deferential to elders, but many were trained to embody their nation’s revolutionary virtues. “The theory of the equality” was present at the ballot box, according to one sympathetic Englishman, but “rampant in the nursery.”

 

Boys, in particular, spent their childhoods in a rowdy outdoor subculture. After age 5 or so they needed little attention from their mothers, but were not big enough to help their fathers work. So until age 10 or 12 they spent much of their time playing or fighting.

 

The writer William Dean Howells recalled his ordinary, violent Ohio childhood, immersed in his loose gang of pals, rarely catching a “glimpse of life much higher than the middle of a man.” Howells’s peers were “always stoning something,” whether friends, rivals or stray dogs. They left a trail of maimed animals behind them, often hurt in sloppy attempts to domesticate wild pets.

 

And though we envision innocents playing with a hoop and a stick, many preferred “mumbletypeg” — a game where two players competed to see who could throw a knife closer to his own foot. Stabbing yourself meant a win by default.

 

Left to their own devices, boys learned an assertive style that shaped their futures. The story of every 19th-century empire builder — Carnegie, Rockefeller, Vanderbilt — seems to begin with a striving 10-year-old. “Boy culture” offered training for the challenges of American manhood and a reprieve before a life of labor.

 

But these unsupervised boys also formed gangs that harassed the mentally ill, the handicapped and racial and ethnic minorities. Boys played an outsize role in the anti-Irish pogroms in 1840s Philadelphia, the brutal New York City draft riots targeting African-Americans during the Civil War and attacks on Chinese laborers in Gilded Age California. These children did not invent the bigotry rampant in white America, but their unrestrained upbringing let them enact what their parents mostly muttered.

 

Their sisters followed a different path. Girls were usually assigned more of their mothers’ tasks. An 8-year-old girl would be expected to help with the wash or other physically demanding tasks, while her brother might simply be too small, too slow or too annoying to drive the plow with his father. But despite their drudgery, 19th-century American girls still found time for tree climbing, bonfire building and waterfall-jumping antics. There were few pretty pink princesses in 19th-century America: Girls were too rowdy and too republican for that.

 

So how did we get from “democratic sucklings” to helicopter parents? Though many point to a rise of parental worrying after the 1970s, this was an incremental change in a movement that began a hundred years earlier.

 

In the last quarter of the 19th century, middle-class parents launched a self-conscious project to protect children. Urban professionals began to focus on children’s vulnerabilities. Well-to-do worriers no longer needed to raise tough dairymaids or cunning newsboys; the changing economy demanded careful managers of businesses or households, and restrained company men, capable of navigating big institutions.

 

Demographics played a role as well: By 1900 American women had half as many children as they did in 1800, and those children were twice as likely to live through infancy as they were in 1850. Ironically, as their children faced fewer dangers, parents worried more about their protection.

 

Instead of seeing boys and girls as capable, clever, knockabout scamps, many reconceived children as vulnerable, weak and naïve. Reformers introduced child labor laws, divided kids by age in school and monitored their play. Jane Addams particularly worked to fit children into the new industrial order, condemning “this stupid experiment of organizing work and failing to organize play.”

 

There was good reason to tame the boys and girls of the 19th century, if only for stray cats’ sake. But somewhere between Jane Addams and Nancy Grace, Americans lost track of their larger goal. Earlier parents raised their kids to express values their society trumpeted.

 

“Precocious” 19th-century troublemakers asserted their parents’ democratic beliefs and fit into an economy that had little use for 8-year-olds but idealized striving, self-made men. Reformers designed their Boy Scouts to meet the demands of the 20th century, teaching organization and rebalancing the relationship between play and work. Both movements agreed, in their didactic ways, that playtime shaped future citizens.

 

Does the overprotected child articulate values we are proud of in 2014? Nothing is easier than judging other peoples’ parenting, but there is a side of contemporary American culture — fearful, litigious, controlling — that we do not brag about but that we reveal in our child rearing, and that runs contrary to our self-image as an open, optimistic nation. Maybe this is why sheltering parents come in for so much easy criticism: A visit to the playground exposes traits we would rather not recognize.

 

There is, however, a saving grace that parents will notice this summer. Kids are harder to guide and shape, as William Dean Howells put it, “than grown people are apt to think.” It is as true today as it was two centuries ago: “Everywhere and always the world of boys is outside of the laws that govern grown-up communities.” Somehow, they’ll manage to go their own way.

 

________________________________

 

A National Endowment for the Humanities fellow at the Massachusetts Historical Society who is writing a book on the role of young people in 19th-century American democracy.

0 Comments

Mon

21

Apr

2014

Investigating Family's Wealth, China's Leader Signals a Change

From The New York Times 

By CHRISTOPHER DREW and JAD MOUAWAD

APRIL 19, 2014

 

HONG KONG — His son landed contracts to sell equipment to state oil fields and thousands of filling stations across China. His son’s mother-in-law held stakes in pipelines and natural gas pumps from Sichuan Province in the west to the southern isle of Hainan. And his sister-in-law, working from one of Beijing’s most prestigious office buildings, invested in mines, property and energy projects.

 

In thousands of pages of corporate documents describing these ventures, the name that never appears is his own: Zhou Yongkang, the formidable Chinese Communist Party leader who served as China’s top security official and the de facto boss of its oil industry.





A visitor at the Zhou family's ancestral graves in Xiqliantou, eastern China.  Intrigue surrounds the family after a spate of arrests.  Sim Chi Yim for the New York Times
A visitor at the Zhou family's ancestral graves in Xiqliantou, eastern China. Intrigue surrounds the family after a spate of arrests. Sim Chi Yim for the New York Times

But President Xi Jinping has targeted Mr. Zhou in an extraordinary corruption inquiry, a first for a Chinese party leader of Mr. Zhou’s rank, and put his family’s extensive business interests in the cross hairs.

 

Even by the cutthroat standards of Chinese politics, it is a bold maneuver. The finances of the families of senior leaders are among the deepest and most politically delicate secrets in China. The party has for years followed a tacit rule that relatives of the elite could prosper from the country’s economic opening, which rewarded loyalty and helped avert rifts in the leadership.

Zhou Family Ties

1 Comments

Fri

13

Nov

2015

Are Languages Products of their Environment?


shutterstock_222422665_151112


DISCOVER MAGAZINE published this very interesting article: 


  Languages Are Products of Their Environments


The characteristics that make each language unique may actually be adaptations to the acoustics of different environments.

2 Comments

Tue

03

Jun

2014

The Case for Reparations

 

The Case for Reparations

 

Two hundred fifty years of slavery. Ninety years of Jim Crow. Sixty years of separate but equal. Thirty-five years of racist housing policy. Until we reckon with our compounding moral debts, America will never be whole.

 

By Ta-Nehisi Coates

May 21, 2014

 


Chapters

  1. I. “So That’s Just One Of My Losses”
  2. II.  “A Difference of Kind, Not Degree”
  3. III. “We Inherit Our Ample Patrimony”
  4. IV. “The Ills That Slavery Frees Us From”
  5. V. The Quiet Plunder
  6. VI. Making The Second Ghetto
  7. VII. “A Lot Of People Fell By The Way”
  8. VIII. “Negro Poverty is not White Poverty”
  9. IX. Toward A New Country
  10. X. “There Will Be No ‘Reparations’ From Germany”
0 Comments

Mon

02

Jun

2014

A Look At 19th Century Children In The USA

PHILADELPHIA — DINNER with your children in 19th-century America often required some self-control. Berry stains in your daughter’s hair? Good for her. Raccoon bites running up your boy’s arms? Bet he had an interesting day.

 

As this year’s summer vacation begins, many parents contemplate how to rein in their kids. But there was a time when Americans pushed in the opposite direction, preserved in Mark Twain’s cat-swinging scamps. Parents back then encouraged kids to get some wildness out of their system, to express the republic’s revolutionary values.

The New York Times

Sunday Review

By JON GRINSPAN MAY 31, 2014

 

A late 19th century family taking a stroll down a set of railroad tracks
A late 19th century family taking a stroll down a set of railroad tracks

Read More 0 Comments

Mon

21

Apr

2014

Investigating Family's Wealth, China's Leader Signals a Change

From The New York Times 

By CHRISTOPHER DREW and JAD MOUAWAD

APRIL 19, 2014

 

HONG KONG — His son landed contracts to sell equipment to state oil fields and thousands of filling stations across China. His son’s mother-in-law held stakes in pipelines and natural gas pumps from Sichuan Province in the west to the southern isle of Hainan. And his sister-in-law, working from one of Beijing’s most prestigious office buildings, invested in mines, property and energy projects.

 

In thousands of pages of corporate documents describing these ventures, the name that never appears is his own: Zhou Yongkang, the formidable Chinese Communist Party leader who served as China’s top security official and the de facto boss of its oil industry.





A visitor at the Zhou family's ancestral graves in Xiqliantou, eastern China.  Intrigue surrounds the family after a spate of arrests.  Sim Chi Yim for the New York Times
A visitor at the Zhou family's ancestral graves in Xiqliantou, eastern China. Intrigue surrounds the family after a spate of arrests. Sim Chi Yim for the New York Times

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