As with Duterte last time, let’s do China anecdotally this time. Following a recent and simply riveting dinner conversation at a family friend’s house in Montreal, the subject of travel came up, and here are a few notes from “Jack,” a 35-year-old French-Canadian serial entrepreneur who is just back from four years motorcycling across China where he learned the language in both written and verbal forms :
- If you want real Chinese culture, go to Taiwan. The Maoists have killed “Chinese” culture almost completely, papering it over with Soviet-style propaganda after murdering anyone with so much as a high school education or aristocratic heritage during the Cultural Revolution. All that’s left in China are the most vulgar and base forms of narcissism.
- Maoist-Capitalism is morally bankrupt, believing only in profit, cunning, and greed. There’s no social fabric nor narrative to keep personal ambitions in check more thoughtfully.i
- It’s still possible to see the countryside as it once was, to get out ahead of the bulldozers into rural villages as yet undemolished by the centrally-planned powers that be, but so, so much has already been lost.
- Beijing has convinced the rural populations that the majority of the population of China is of Han descent and is therefore united, despite obvious physiognomic, dialectical, and architectural evidence to the contrary. The rural populations have been completely stripped of their histories, they don’t even know how old their villages are anymore, just “hundreds of years old”
- The trade war with America is damaging the centrally planned economy’s ability to unwind its already exacerbated debt and shadow banking problems – the blows are landing.ii
- Many Chinese, even those within the Party, are dissatisfied with the state of affairs, particularly the corruption, waste, and greed, but they’re each too scared to tell each other, even their spouses, for fear of instant imprisonment. There is therefore a sea of discontent bubbling beneath the surface, ready to invert at a moment’s notice like a thermocline in the summer.
- The Chinese have nearly perfected industrial espionage, leveraging Western-trained students who navigate their ways into the workplace, steal intellectual property, and systematically funnel it back to Beijing.iii The spies will sometimes even take their knowledge back to China personally and set-up new businesses there that undercut ones in the West by leveraging the massively overfunded state-owned enterprises.iv
- State-owned enterprises form 70% of the market-based Chinese companies, meaning that approximately 90% of all employees are directly reporting to central command, which obviously creates the same pitfalls of organisation, communication, logistics, forecasting, and everything else in between that plagued Soviet Russia.
- There is still a huge disconnect between the provinces and Beijing, with the provinces wresting power and autonomy by feeding Beijing bogus economic numbers to satiate the Politburo’s hunger for paper growth.
- Western firms are leaving China in droves because Chinese wages have gone up and the political climate within China is less certain and more uneasy than ever. Early beneficiaries in Southeast Asia include Vietnam, Thailand, and South Korea.
P.S. Another recent anecdotal perspective comes to us from an older American economist. Feel free to compare and contrast.
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- “Jack” even went as far as to call China an “Evil Empire.” Better than a “blackbox,” I suppose. ↩
- Trump definitely knows a bad deal when he sees one, and the deal with China has been rotten for decades. Just like the NATO deal. ↩
- “Jack” estimates that the chances of a Chinese-born employee being a spy are as high as one-in-five. Take that for what it’s worth but I have to take that with a grain of salt. ↩
- The state-owned enterprises are hugely wasteful and vastly overfunded and so engage in massive infrastructure projects for lack of productive alternatives. ↩