Continuing my ad-hoc series on Chiense economy and society, I would like to share with you two things today:
The first is an article by Mr. PJ O'Rourke bout the US Trade Deficit with China, and why we are worrying about nothing. I should say that I disagree with him, only slightly, in two parts:
1) I think the IOU phenomenon he speaks of tends to translate into foreign ownership of US assets (right now the US assets foreigners own minus foreign assets that Americans own is about $2.4 trillion). So essentially, we are selling assets for goods, which makes our capital investment more dependent on rich foreigners... not that such a thing is necessarily significantly worse than making it dependent on domestic rich guys. That said, his argument about the Japanese export-asset purchase-bubble burst story is rather convincing.
2) If the US drops trade barriers (even slowly, as would be intelligent) without reforming its economic regulation, it will find that there's not much it can do, and that's bad. We cannot compete on the international market freely if our own internal economic operations are not relatively free--we would just be too inefficient. He doesn't address this problem well.
Otherwise, great article, including my favorite quote: "America is wrong about economic principles so basic that even a doddering old Commie with a high school education like Deng Xiaoping understood them."
The second thing I'd like to share with you is a few observations about the current state of Beijing. I have already mentioned that it's in a "frenzy" of building and motion, but I am starting to realize just how epic this is--and what it means for the Chinese economy.
Over the weekend, I walked home on south Sanlitun road, and saw some guys with shovels digging up loose shrubs along the entire street. Okay, I thought. I walked to work Monday, and the entire road had new, prettier, orderly trees and shrubs planted, and it has been cleaned. Just like that. But that's nothing.
While walking to work today, I saw the power go out along that road. Within minutes, literally minutes, police and construction workers were on the scene, directing traffic and climbing poles to assess and fix the problem. Soon later, great spools of wire came. It was not quite fixed by the time I got to work, but I would be shocked if it wasn't fixed by the time I go home--as if nothing happened.
Last night, while touring around, we saw a police building torn down. "...this was here yesterday, people were working here yesterday." But the next day, sans red-tape, bureaucracy, and waste, it was torn down to be replaced.
Cranes operate on nights and weekends (in part because labor is so cheap, it's cheaper to pay overtime than let the cranes sit idle). I'm watching buildings rise before me, in timespans of months (not years). It's like every job is a rush job.
One of my friends harkened Beijing to Snowcrash, or Firefly. Big, mean, and changing with incredible speed at all times. One truly does not know what to expect when he walks out of his building the next day. Something new will be there, or something old will be gone. The city is changing quickly, growing, staying with the times. It is progressing at break-neck speed. If only all of China could do that.
Mr. O'Rourke mentioned some of the serious hinders to progress that the Chinese government has in place--certainly, this government is very far from perfect. But my impression is that the Chinese government is less concerned about scrutinizing every private project on private property for its social/spiritual impact as much as Americans are--they are less happy with towns passing ordinances to arbitrarily block a private project on private ground because local citizens "just don't like it," or because some local PTA lobbying group doesn't want a Starbucks in their town. Their workers are not allowed to wallow in wasteful time, and slowly roll to a construction site when it is convenient. When something needs getting done, they are called to arms, and they come, and they work, because that is the only way to make money. Many Americans consider labor union workers to be somewhat lazy. My Chinese friends were shocked that this could be true.
Ultimately, China's current economy is one that just Gets It Done. Are there costs to this? Certainly. Sometimes, something Not Good gets built, sometimes people get irritated, sometimes there are environmental impacts. There may be a middle road to be reached. But I cannot criticize the Chinese for the speed at which they are allowing their city to change--besides some historical artifacts, there is no sense that something should be preserved over something newer and better just because it was there first. If someone wants to buy it, smash it, and build anew, well, that is their initiative. The US tendency to scrutinize every plan to build, every plan to spend, of its citizens, and tell them what they can and cannot do with their private property for reasons as wild as view obstruction, asthetics, etc, has created a society so terrified of doing something wrong that it cannot find the courage to do anything at all.