March 2012

CHINA---EXPLOSION PLUS IMPLOSION?

SY SCHECHTMAN

The world watches heisitantly and still intently as the Chinese people do their weibo dance, the Chinese version of the Twitter app. The Twitter, a light weight U.S. very recent innovation of instant communication is banned in China, because, as in the so called Arab spring, it easily eluded the more heavy handed censorship of the ruling mullahs and unelected “presidents” and ruling potentates throughout the Moslem world. The almost negative presence and eerie reality throughout the Moslem world of more personal freedom is now almost a manifest reality. But it does not yet result in one’s head and heart being exactly on the same page; and the synchronized soul and/or psyche marching in coordinated, comfortable fashion onward and upward! The heady freedom potion has to be leavened with more than just a dash of the traditional “golden rule”, that I am my brother’s keeper, and more of the probability of an equal playing field and opportunity. (But not too much more of the certitude of equal results!).

Not each according to his need but each according to his just effort. A sort of a meritocracy, with the just financial reward for the best effort societally and neighborly esteem. And still a network for support those who fall through the cracks in this revival of this “survival of the fittest” social Darwinism, or the “best and the brightest” if you like. Or even better--- enlightened self interest!

However, in the current Chinese polity there is a growing disconnect between the head and the heart. The “head” being the abstract central totalitarian rule that can decree an almost inhuman work week schedule and attain it because of very cheap labor from “migrant” interior laborers from the Chinese hinterlands who are desperately poor and unorganized. And so accomplish inhuman growth production of about 10% annually for the last few years, not the 2 to 3 percent that we do with our efficient but not punitive approach. No doubt the harsh approach has produced much short term admiration—or at least respect. But the disconnect between economic classes, mainly due to mass almost instant media updating via the internet, especially weibo, is growing. It is estimated that about half the Chinese live in this very poor inland situation. And many still without even potable drinking water. China, up until now, because of this very cheap labor advantage is now second to the United States in Gross Domestic Product, (GDP) , the most telling economic statistic worldwide, supplanting even Japan.

But this startling Chinese explosion of growth has fueled much growing disconnect among the large mass of lower class peasant groups. They now understand the plight they suffer while not far distant, on the coastline of the China Sea, the sea ports that engage in China’s still massive export trade, are also still functioning reasonably well. But the worldwide recession these poor peasants know, and also because they, too, have very current internet knowledge from the weibo that their compatriots somewhat closer to the sea coast and their still viable export trade are far above them in financial comfort . For a significant part of the people, through devoted effort, have lifted themselves into to viable middle class status, functioning happily with the healthy middle class capitalist greed that it now permissible in this still most complete absence of personal freedom state. An almost paradoxical, oxymoronic “blend” of free enterprise harnessed to the watchful, always somewhat paranoid central, always controlling, headquarters in Beijing. And in addition, later on this year a most important event for the Communist Party will occur. This mostly economic hydra headed quandary will become more acute later on this year when the Communist Party holds its five-yearly Congress. Then, probably in October or November, the changes in the top echelon of the ruling group will begin to unfold. The Congress will “elect” a new 300 member central committee, which in fact will be handpicked by senior leaders’, who will immediately convene to a rubber stamp approval of a new Politburo of about 25, of which most of the core inner circle of nine will also be replaced. The remaining two or three are also well known as seasoned for the ultimate leadership but for neophyte on lookers as we are, their names do not now ring recognition memory bells. We and history shall know by their positive or negative deeds!

This incoming new ruling clique will indeed have mammoth work to accomplish in this over a billion soul entity. Current polls show that while most of the Chinese still support their government this positive support has fallen significantly and local optimism has dimmed considerably in this vast country. The best guess estimate is still that over 50% still support the ruling clique but the incoming new Politbureau will have to keep the growing discontent over still inadequate wages and long hours from coalescing on a national and more militant, unified level. “Workers are not willing this time to accept that they have to make sacrifices for the national good because firstly they have already made enough sacrifices, and secondly fewer are willing to just pack up and go home.”

Most of us have vivid memories of only a mere 25 years ago, in June of 1989 when Chinese militia opened fire on protesters in Tianimen Square and Beijing Square, killing an undetermined number of militant unarmed protesters. They were shots literally heard round the world and drew much international condemnation. Today we have a more solemn and cautious reappraisal. China is viewed somewhat more dubiously, if not with open anxiety. The strange agglomeration of almost fiscal laissez faire attached to harsh political strictures makes for not too much short term jubilation. However the long term “ changing of the guard” as described above, can be a most timely event. Even the youngest of the incoming new committee of 300 know of the legendary almost watershed events mentioned above about the alleged massacres. But history never really repeats itself; but does reverberate and echo in our consciousness. And in fact mostly with the uncomfortable awareness that the Chinese own about 8 percent of our outstanding public debt--1.2 trillion dollars! From a Republican Party standard a most alarming, almost calamitious over the “financial cliff position”. But from the Chinese position, most probably and hopefully, the U.S. is much too big to fail. While it is still quite considerable it is only about 8% of the total outstanding U.S. debt. There is about 14.3 trillion debt outstanding and while the Chinese 1.2 trillion is not exactly “chump change” they do not want to embarrass their prime international customer who has always paid current bond interest on all its bonds all the time when due.

On the flip side of the economic coin is the interesting fact that Chinese unrest, due partly to the internet and its offspring, the weibo, is gradually causing wages in the hitherto very low cost outlying factories to became not so low anymore. Also, increasing concern with environmental pollution is causing concern and is adding to rising product cost. Indeed, a not so rather wry, funny joke is that current overseas U.S. manufacturers are now looking carefully at southern sites in this country to start up long non union dormant sites for apparel and allied merchandise. Included in their calculation, of course is the cost and time of flying back and forth regularly to the various parts of vast China to monitor their off shore enterprise ventures. These harried souls, after all, want to spend more time in the welcoming bosom, I would think, of welcoming families at home! And even beyond this lovely family prospect---Think of what it might due to implode our too strong unemployment rate. If that rate continues its’ present rate of decline in this country Obama’s chances are greatly enhanced.

And I, great humanitarian as always, will suspend my Anti Obama bias in favor of the best wishes for more employment even for almost all my fellow man and woman, even though they may be of opposing, utterly misguided political persuasions.