A Note on the Middle Income Trap
In the last couple of years, a number of China political observers have commented on the dangers to China of the middle income trap. The fear is that the Chinese economy will fall into the trap. Since economic growth is the remaining claim to legitimacy for CCP, a substantial slowdown from real growth rates of 6 to 15 per cent per year, which obtained in the last forty years, will be disturbing to the harmony that keeps CCP in power.
In what follows I am not making direct claims for or against the middle income trap in China, only describing the concept.
Huawei - Lie down with dogs, get up with fleas
You know the meme – when you work with bad guys, you should expect to be labeled a bad guy. I mean no disrespect to the thousands of Chinese companies doing business across the world that manage to be profitable without intimate Chinese government relations. But in our globalized, internet era, it is impossible for a high tech company, particularly one as fundamentally important to internet networks, to not be tarnished with the specter of theft of intellectual property and CCP internet control and monitoring of Chinese businesspeople, students, even foreigners.
Probably no one outside a small group of analysts has the actual evidence of real dirt on Huawei. But that is the risk of being a national champion in China. If the government is promoting you, then there must be a government interest in promoting you, beyond just “go team.” This is simply Chinese practical reasoning.
But it seems that lying down with dogs is more than just a saying here. In his extraordinary Sinocism news blog, Bill Bishop continues the Huawei stories. From the February 9 edition, with no repetition in the stories (all should be clickable) -
Shuang Yin Win-Win February, 2019
Now that a crash-out Brexit seems all but assured, where will Britain turn for trade deals? The kind of relationship that the British government wanted – like that of Canada or Norway with the EU – takes years to negotiate, under favorable circumstances. There has been discussion for more than ten years that the special relationship between the US and Britain - forged from the mid-19th century and cemented between President Roosevelt and Prime Minister Churchill in World War II – is no longer so compelling. The EU without Britain is still a huge and attractive market for US trade in both directions.
As of March 29, 2019 – in a bit more than a month - there will be hundreds of treaties and agreements to negotiate, suddenly, quickly, and in great detail. Some agreements will probably get done – ability of British truck drivers to deliver goods through the Chunnel into EU turf, and ability of airplanes to take off from Heathrow bound for destinations in Europe using parts and crew that, without certification by the EU, would be not allowed.
But where can Britain turn for trade deals, quickly, without years of complicated negotiations? What large trading partner is willing to set aside the details of complex agreements when mercantile interests, not to mention future geopolitical support, are at stake? What large trading partner can act quickly, based on personal leadership from a president or prime minister or general secretary?
In October, 2015, a few months before the Brexit vote, Xi Jinping visited the UK, and demonstrated his prescience –
"The UK has stated that it will be the Western country that is most open to China," Xi told Reuters ahead of his first visit to the country as president.
"This is a visionary and strategic choice that fully meets Britain's own long-term interest."
UK Prime Minister David Cameron, speaking on CCTV, China's state broadcaster, said the visit would mark a "golden era" in the two countries' relationship.
Idle Thought last week in January, 2019
What if this past weekend were the beginning of the end for the orange haired baboon? And, in the process, the GOP were so damaged that even a Pence presidency couldn’t do much harm, and we gained a president in 2020 who was smart, thoughtful, respected intelligence and loyalty to allies and was up for repairing the extraordinary damage, domestic and international?
Someone who might say something that would remind us of these lines -
“Let the word go forth from this time and place, to friend and foe alike, that the torch has been passed to a new generation of Americans, born in this century, tempered by war, disciplined by a hard and bitter peace, proud of our ancient heritage, and unwilling to witness or permit the slow undoing of those human rights to which this nation has always been committed, and to which we are committed today at home and around the world. Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe to assure the survival and the success of liberty.”
Update on Peking U Ideological Battle January, 2019
In a recent post, The Ideology of Occupation, I described an ideological struggle being played out last month at Peking University, the combined Harvard-Yale of China. Now, a followup on what has happened to the "Old Marxist" students who questioned the manner in which CCP has been providing leadership of the proletariat. Spoiler - they are in jail.
Crash-out. Or D-Day - Disaster Day - minus 7
The original D-Day was salvation for Britain and Europe - even, in its way, for Germany. This one seems less promising.
Not much to say anymore. Cue the violins and watch the China moves.Read more ...
Huawei - Taking a Fall, Hoping for a Call
Pardon the soccer reference. But to my mind, that is the Huawei move. But Huawei has the support of the fans, at least in China, and they are vocal.
Don Clarke, professor of law at George Washington University, has penned this response to the declaration of the Zhong Lun law firm in Beijing, in support of Huawei as an innocent private company caught in a nasty trade spat. According to the declaration, no company in China is ever required to comply with demands from the central government to install spyware or backdoors in any communication equipment. Clarke points out that this is misleading and inaccurate. Chinese law says nothing about what provincial and local governments might demand from a company, and in any case, law is not a constraint.
“There’s a whole variety of pressures that the government can bring to bear on a company or individual, and they are not at all limited to criminal prosecution Clarke says. “China is a Leninist state that does not recognize any limits to government power.”Read more ...
What Chinese are talking about ... real fake news
You know that China is increasing pressure on every state it can bully. The bullying is easiest when the victim state has a substantial share of its GDP connected to China, whether as exports or as Chinese FDI coming in. Now come fake news stories published in China, quoting New Zealand politicians approving of Chinese policies on the Belt and Road initiative. New Zealand is in a tough spot. Read more ...
Work on contemporary China, academics and journalists but in the popular media
- If they write it, you should read it - (a) mostly individuals
Work on contemporary China, mostly in the popular media
- If they write it, you should read it - (b) mostly organizations
- Whither China post #9 – Question 7 – So no democracy, no resilience; heavy challenges. Now what?
- Whither China post #8 – Question 6 – But how about innovation. Can you have that without democracy?
- Whither China post #7 – Question 5 – Whither China's economic development with no democracy?
- Whither China post #6 – Question 4 - must China have democracy … or die?
- Whither China Post #5 - Question 3 - Does Xi have a plan … or even a solution?
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