Author: Ryan Manuel
The reactions of Thailand’s commanding northern neighbour have been heavy on the minds of Western media during the events of recent weeks.
As the BBC noted in the aftermath of the protests that postponed the ASEAN Summit:
Mr Abhisit had to make a grovelling phone call to apologise to Premier Wen, who, despite diplomatically saying he understood the prime minister’s actions, must have been thinking: ‘This could never happen in China.’
Yet an attempt to calculate exactly what Grandpa Wen thought of the events in Thailand is difficult. Coverage of the Thai situation in the Chinese media has been fairly limited. The august China Daily, and Xinhua have shared the same daily stories (usually a brief 300 word coverage of the respective event) for the past week with stories on 13 April (‘Water Festival not so happy’); 14 April (‘Protesters go home’); 16 April (‘ASEAN summit must be held – Abhisit’); 17 April (‘Yellow-Shirt leader shot; Thai gov’t says additional loan needed to boost post-political-crisis economy’) and 19 April (‘Thai PM: time for solving political crisis, not for cabinet reshuffle’).
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Author: Ryan Manuel
A recent article by Sun Liping has attracted considerable attention on the blogosphere (thanks to China Digital Times for the link, and initial translation. I have retranslated the text).
CDT highlighted the piece as interesting because of Sun Liping’s links with current rising star Xi Jinping: as an aside, I am somewhat sceptical about this, given that Dr. Sun is a sociology professor and Xi an engineer.
But it is the content of Sun’s article that makes it explosive. In particular, he argues that:
It is difficult to achieve the double goals of maximizing vested interests and keeping the society operating steadily…we will pay a high price in the long-term for safeguarding vested interests.
This part of his argument is a common one, and is interlinked with Sun’s broader point on the lack of social cohesion and ’society’ within China.
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Author: Ryan Manuel
Amongst the flood of articles arguing whether we are now Keynesians or otherwise, the Chinese stimulus package unveiled in response to the economic downturn has not gone unnoticed.
As Meng notes, the current economic crisis may even have a positive effect on health care in China. The government may see the health sector as conducive for supporting economic recovery and invest more accordingly.
A recent argument outlined that:
there is a lot that expansionary fiscal policy in China could achieve, through stimulating domestic demand. Especially if it included a good fix on Chinese health care and the insurance industry in general.
There is no doubt that getting a ‘good fix’ on health care in China would be a considerable boon to China’s farmers. Recent surveys of attitudes in the countryside towards China’s development have all focused on health care as the primary source of dissatisfaction.
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Author: Ryan Manuel
The recently concluded Third Plenary outlined what Willy Lam is calling a ‘New Deal with Chinese characteristics‘. With significant growth in tax revenue from what has been a booming economy, China plans to inject an additional US $38 billion of government funding – the equivalent of 1.5% of GDP – into health.
The goal of this ambitious ‘Chinese New Deal’ will be the provision of free or nearly free universal basic health care.
The health policy released recently said that this would be achieved by increases in primary and secondary prevention, primary care in outpatient clinics, maternal and child health care, home health services for the disabled and elderly, emergency hospital services, and essential drugs.
This, of course, is quite the laundry list. Yet, in spite of the big talk, the fundamental problems of Chinese health care appear to have not been addressed at all.
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Author: Ryan Manuel
Lord Patten’s recent article argues that China’s ability to have economic growth outside of the United States’ secured, liberal order is a beacon to wannabe authoritarians everywhere. China, then, is a threat to democracy due to its economic success.
There is some reason to what he says. Undoubtedly, the recent economic successes of both China and Russia have altered many of the tenets of democratic growth theory. Democratic growth theory, in a nutshell, argues that as an economy grows, the middle class demands more of a say in its affairs, leading to more democratic institutions and often political transition.
Yet, as Robert Kagan has recently argued, there is a considerable international appeal to autocracy, and if this can be combined with a successful economic model, then suddenly a new model of development appears.
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Author: Ryan Manuel
A brief skim of Chinese newspapers recently would give the casual reader a fairly good idea that China managed to have a man walk in space. Woe betide this same reader should they then reach for a skim milk though. Not that you would know from a casual scan of the Renmin Ribao.
Yet, for us, juxtaposing the recent space crisis with the powdered milk incident provides a valuable perspective of the nature of modern China.
Look at me kids! Now drink your milk... (from yesterland.com)
In the red corner, we had Colonel Zhai wearing his 265-pound, US$4 million, Chinese-made “Feitian” space-suit for a jaunty space stroll, the success of which has sent Chinese propaganda “hitmen” such as Yu Feihong into a frenzy.
An editorial run in major newspapers said the success of the Olympics and other such “nation-building feats” demonstrated the superiority of the Chinese political system to the democratic West’s “corrupt, divisive and inept policy-making”. “Its advantages are increasingly evident,” it said. “Western countries are mired in low growth, and the United States’ recent severe financial crisis is a manifestation of the dead-end of liberalism.”
At the same time contaminated milk powder, laced with the industrial chemical melamine in order to make it appear more “full of protein” for Chinese consumers, has been blamed for causing the deaths of four infants and sickening more than 54,000 others. Chinese authorities stated that dairy farmers added melamine, usually used in plastics, paint and adhesives, to watered-down milk. The practice was apparently widespread in the industry, with government investigations finding 37 Chinese dairy companies, including the most reputable brands, had sold tainted products.
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Author: Ryan Manuel
A recent report in the Sunday Times argued that “Wen Jiabao, the prime minister [of China], has become a target for Communist party hardliners and could be forced from office.”
Kaifang (Open) has said that “rivalries inside the party have broken out behind the facade of unity erected for the Olympic Games… hardliners in the party’s propaganda department and at the People’s Daily newspaper had orchestrated a campaign of abuse directed at Wen’s supposed support for universal values such as democracy and human rights.”
“China’s ship of reform is on the rocks and risks sinking,” Kaifang said in its analysis. “The party needs to find a scapegoat.”
So, if you need to find a scapegoat for having insufficient reform, why do you sack a noted reformer? Very little of this article seems to match with common sense.
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Author: Ryan Manuel
Albert Edwards, Societe Generale’s global strategist, has recently issued a ‘China alert‘, urging investors to ‘dump shares of banks exposed to the Far East’. Now, we have pointed out a number of problems in China’s development lately, with public finance being top of the hit list.
But dumping shares of banks “exposed to the Far East” is completely ridiculous. Recent events have seemed to support the argument for China’s macroeconomic situation being stronger, rather than weaker. Foreign trade and FDI now account for less than 20% of China’s recent growth – this is important, as China is somewhat insulated now from adverse international trends, although not completely protected (eg. see impact of higher international petroleum, commodity and food prices on China’s inflation rate in the first half of this year). Yes, the World Bank recently predicted that Chinese economic growth (GDP) for this year would probably come out at above 9% p.a., down from over 11 % last year. But this is a necessary slowdown, as 12% p.a. is widely recognized as being unsustainable and inflationary.
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Author: Ryan Manuel
Some friends of mine at grad school have a great saying: “using the word normative does not automatically improve your argument”.
Having read Josh Kurlantzick’s latest piece, I am tempted to change that to “using the words ‘middle class’ does not automatically improve your argument”.
Kurlantzick argues that “in country after country, democratic reforms are in retreat. The surprising culprit: the middle class”. A prime example, he argues, is Thailand, which was once the poster child for a successful switch to democracy until the rise of Thaksin Sinawatra.
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Author: Ryan Manuel
Rowan Callick’s piece in the Australian discussing a protest from disgruntled shareholders in Jishou makes a number of insightful points. His thesis that China faces economic challenges which require reform is indubitable. But his central argument that all of this will be solved through the magic of the ‘party accepting limits to its power’ rather than through the tussle and interaction between Chinese civil society and markets seems to put the cart before the horse.
Callick argues that reform in China is too slow, and that ‘in the 19th century, the polity of most of Europe changed massively importantly, through governments and large corporations becoming answerable to courts and accountable to broad groups of the population.’
Indeed. But it was this very ability of broad groups in the polity to coalesce and develop a unified agenda that forced change. No political party voluntarily gives up power, a maxim that appears to hold almost as universally in democracies as under any other form of government. Read more…
Author: Ryan Manuel
A recent report from the Chinese Academy of Social Sciences (thanks to World China Bridges for the link) has listed the 10 most serious social problems in China at the moment. The high expense and a lack of access to medical services topped the list.
“It’s very rare in other countries that health care was the most serious social problem,” the report said. “Instead of a simple problem about poor medical service, it is related to the country’s reform on all public service sectors.”
Given the authority of this source, this is an incredibly important admission. It is also a surprising admission. China has suffered dramatically from an inability to formulate comprehensive solutions to public policy problems. The most substantial of these weaknesses has been an inability to reform its fiscal system, which has been a considerable hindrance to the delivery of public goods. Nowhere has this been more obvious than the health care system.
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Author: Ryan Manuel
As noted yesterday, the recent events in Thailand appear of great significance to the region as a whole. For more up-to-date and comprehensive analysis of the situation, we commend the New Mandala blog to you. The following piece can also be seen there.
Reactions thus far to the Thai events in China appear to be along the lines of those in Western newspapers, with many papers using the Reuters Chinese language feed to shape their reportage.
Longer opinion pieces however reveal some interesting slants on the crisis.
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Author: Ryan Manuel
The recent events in Thailand have led to considerable debate, and some confusion, regarding their impact upon the region.The battle between the Royalist, elite PAD forces and the democratically elected Samak-led government appears more than an argument over the current state of the nation. Rather, it appears to be a battle over what model of government Thailand will have in the future as the ageing King Bhumibol approaches the end of his reign.
Samak is seen by his opponents as somewhat of a puppet for former leader Thaksin Sinawatra. However, this does not dismiss the fact that his government remains the democratically elected leadership of the nation. Moreover, the opposition PAD party doesn’t wish new elections- as it is pretty sure it will lose them. Rather, they seek a model whereby 70% of the government are appointed by the monarchy.
Clearly, the outcome of this struggle will have a large impact upon the broader region as a whole. Thailand remains a significant power within the South East Asian region, and in a region not short of governments with authoritarian tendencies, a reconfiguration of governance in Thailand will have implications well beyond the current struggle.
For those readers who are interested in far more comprehensive coverage of this situation, we commend the New Mandala blog based at the ANU to you. An overview of the current situation here, whilst their recent summaries of academic writings on the matter can be found here and here. The Bangkok Pundit also seems to be an excellent source of relevant quick information.
Author: Ryan Manuel
As a further to last week’s article on sport and markets, this article in today’s Australian shows the dilemma facing modern sports administrators, with one of our top javelin prospects moving to the NRL instead
When there is a better funded, non-Olympic sport people will generally switch. There aren’t too many 17 year old boys who would choose differently.
Author: Ryan Manuel
Milton Friedman famously once said that if governments ran the Sahara there would be a shortage of sand.
So, other things equal, a quick look at the Olympic games should show a shortage of gold medals for countries using government run sport systems. Shouldn’t it?
In a word: no, though other things are not equal and that’s a concession in the argument that follows that needs to be acknowledged up front. Government run sports systems seem, on the whole, to be highly successful. Cuban boxers, Indonesian badminton players and Chinese… er, anything players, are all salient examples. State-run sports systems, on the macro level, appear to remain the model for success in Olympic games.
But other things are not equal.
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