Let's not quail before phantoms
papijoe at Marlowe's Shade points out the Speccie's interesting cover story:
it asserts that "China won't be a superpower". papijoe points out that the article's fretting over environmental destruction in China is rather besides the point-it's China's ability to create havoc militarily, unrestrained by a democratic polity, that causes the greatest concern. I agree with him on that, and have further quibbles with one particular passage:
So it is worth reminding ourselves why China is not necessarily destined for greatness, and certainly does not deserve our unmixed admiration. First, its present growth rate is very far from sustainable, dependent as it is on slave wage rates, corrupt bureaucracy, near total absence of environmental controls and a financial system which is at best rickety and at worst, by Western standards, insolvent.
That's just sort of a weird, undisciplined grab bag of fallacies. First of all, how can an economy's growth rate be unsustainable because it depends on slave wage rates? Was Great Britain in the early days of the Industrial Revolution in the midst of a "very far from sustainable" growth rate? You could certainly call the wage rates then-paid "slave wage rates". As they increased, workers were better able to buy more goods and services and expand the economy even more. Perhaps Weyer means to say that China's exports-led growth can't continue, but if it can't, the increased internal purchasing power generated by higher wages will become its own driver of growth. Besides, as Weyer himself points out-
there are still a billion Chinese who are not part of the economic miracle — instead they are underemployed peasants like Mr Zhang’s displaced and disgruntled ex-neighbours, whose only hope of a better life is to stare through the fence that keeps them out and wait for remittances from their offspring, who labour for a pittance in urban sweatshops.
there's still a billion Chinese who haven't been touched by China's economic renaissance. Only 300 million of them have. So if China's continued growth really did depend on "slave wage rates" then it still has a billion people competing with the 300 million that already earn them and pressuring wages down. Keep in mind, by the way-these rates aren't considered "slave wages" by the people receiving them, or they wouldn't be flocking to the cities in their millions hoping for the opportunity to earn them. They're only "slave wage rates" to someone like Weyer who lives in an advanced post-industrial knowledge economy.
Also, how can he say that China's growth rate is dependent on corrupt bureaucracy? Doesn't he mean that corrupt bureaucracy hinders it? And why would he equivocate in describing the Chinese financial system as "at best rickety and at worst, by Western standards, insolvent". If it's insolvent by Western standards, then it's insolvent, there's no "at best rickety" about it. Western accounting standards try to reflect reality as closely as possible-it's what transparent capitalism demands. It's well-known that staggering proportions of the assets of Chinese banks are uncollectable bad debt. The Chinese financial system will require a government bailout of epic scale; the question is not "whether" but rather "when". And anyway, the strongest criticism that can be made of China's growth rate is that it's a lie
, but he doesn't appear to be familiar with this. China is unlikely to be growing much faster than about three percent a year. Look here
for instance (just the tip of the iceberg).
Like papijoe, I think underestimating China is most unwise. However, we should also be careful not to make far-reaching, lasting decisions based on data that we can't trust. China is lying to the global investor class on an unprecedented scale, taking advantage of gullible Asians and Europeans. Dr. Joe Duarte has much more
(extended excerpts below the fold)-essentially, China is probably going to make the world's "hot money" (a.k.a "stupid money") pay for China's insolvent financial system; a huge default is coming.
We believed Soviet self-estimates of their internal growth for a long time even though we knew that our accounting was based on reality and theirs was based on Party doctrine and the need to appear to be burying the West. As a result, the Cold War was likely unnecessarily prolonged and it took the biggest visionary of the century, Ronald Reagan, to finally call their bluff and win the war. We shouldn't trust or make decisions based on data fed to us by people who have a vested interest in lying to us to affect our decisionmaking, and who themselves create incentives for their underlings to lie to them. Caroline Glick recently pointed out that
it looks like Ariel Sharon and Israelis in general got taken for a ride by false Palestinian population statistics.
While terrorism is the outward face of the post-modern aggressor, social psychology is perhaps his greatest weapon. If the target population can be manipulated to view itself as the aggressor, if it can be brought to view its position as untenable, then it will sue for peace and surrender. So it was that Kadoura Fares, a member of the Palestinian Legislative Council and one of the heads of Fatah who signed Yossi Beilin's Geneva Accords, said in an interview with the pan-Arab London-based newspaper Al-Hayat in October 2003 that the Palestinian aim in signing the accords was to "foment a piercing public and political debate in Israel."
While Hamas has placed its emphasis mainly on the terrorist aspect of the post-modern battlefield, the PLO has placed an equal emphasis on the psychological component of the war. In fact, it could be said in retrospect that the greatest single victory the PLO has scored in its 46-year-old war with Israel was the publication of a single report in 1997. That report, "Demographic Indicators of the Palestinian Territory, 1997-2015," is based on a census carried out by the PA's Central Bureau of Statistics (PCBS) in 1997. It projects that the Arab population west of the Jordan River will by 2015 outnumber the Jewish population.
These numbers were immediately adopted by such prominent Israeli demographers as the University of Haifa's Arnon Soffer and the Hebrew University's Sergio Della Pergola, who have both warned that by 2020 Jews will make up between 40 and 46 percent of the overall population of Israel and the territories. The Palestinian projections, which place the Arab population of Judea, Samaria and the Gaza Strip at 3.83 million and the Israeli Arab population at 1.33 million for a total of 5.16 million Arabs west of the Jordan River, put Israel with its 5.24 million Jews at the precipice of demographic parity with the Arabs.
Largely in reaction to these statistics, which were bandied about by everyone from politicians to diplomats to defense officials, Prime Minister Ariel Sharon decided a year ago to adopt the Labor Party's campaign platform and withdraw the IDF from Gaza and northern Samaria and forcibly remove the Jews living in those areas from their homes. In his interview with Yediot Aharonot in December 2003, which was the curtain raiser for Sharon's announcement of his policy shift later that month, Vice Prime Minister Ehud Olmert said: "Above all hovers the cloud of demographics. It will come down on us not in the end of days, but in just another few years. We are approaching a point where more and more Palestinians will say: 'There is no place for two states between the Jordan and the sea. All we want is the right to vote. The day they get it we will lose everything."
BUT WHAT if the numbers are wrong? What if the doomsday scenarios we hear on a daily basis, arguing that Israel is about to be overrun by the Arab womb, are all based on fraudulent data — part of an ingenious Palestinian plan to psychologically manipulate Israel into capitulating?
I'm gonna skip a bunch of Caroline's stunning article here and head straight for the devastating conclusion:
The average of the last two scenarios, which corrected for the Palestinians living abroad and were based on base populations comprised of ICBS Palestinian population survey projections from the 1990s and Palestinian voting records in 1996 and 2004, brought the final projected number of Palestinians in Gaza, Judea and Samaria to 2.42 million — nearly a third less than the 3.83 million figure currently being used.
The study, which has been accepted by prominent American demographers Dr. Nicholas Eberstadt and Murray Feshbach, shows that contrary to common wisdom, the Jewish majority west of the Jordan River has remained stable since 1967. In 1967 Jews made up 64.1 percent of the overall population and in 2004 they made up 59.5 percent. Inside Israel proper, including Jerusalem, Jews make up 80 percent of the population.
While reading the report, the inescapable sense is that something has gone very wrong within Israeli society. The numbers are so clear. The data have always been readily available. And yet, like bats attracted to the darkness of a cave, we preferred the manipulative lies of the PA to the truth.
The entire 117-page report can be accessed on-line at www.pademographics.com. Given that it shows that the government's current policies are based in large part on an uncritical acceptance of fraudulent data whose purpose was to demoralize us into capitulating to our post-modern foe, hopefully Olmert and Sharon will take a look at it.
Read the whole thing, then come back and read Joe Duarte on China's bubble below the fold, as well as my thoughts on why official Chinese propaganda after 9/11 reveals that it isn't a country that will lead the world any time soon...