If China helps Europe, only behind the scenes - Victor Shih

Victor Shih

Is China able and willing to bail out Europe? Political and financial analyst Victor Shih does not exclude the possibility, but he tells in Global Post, if China does so, it is not going to boast about it in public. What are the effects of China's own debt problems on the world?

Victor Shih in The Global Post:

The slow down in local government borrowing has led to a slow down in Chinese imports of construction materials. That mainly effects Australia, Brazil and other countries that export raw materials to China.  

On the contrary, the U.S. has really benefited from food inflation in China. Farmers have been driven off their land, when it is converted into real estate. Chinese dependence on imported food, especially from North and South America, has increased quite substantially in recent years. I don't see that trend reversing any time soon. So farmers in the U.S. have really benefited from Chinese growth and from rapid and artificially-driven pace of urbanization. 

This week, French President Nicolas Sarkozy appealed to his Chinese counterpart, Hu Jintao, for financing to support the euro zone's bailout. Does China have the money to do this? There are, after all, a lot of poor people in China, and development has a long way to go. And what are the risks of such financing for Europe and China? 

China has the world's largest foreign exchange reserves, and so strictly speaking they have the money to invest in whatever sort of bailout scheme Europe comes up with. At the same time, I think Chinese leaders are very careful not to publicly claim credit for saving Europe. That's because, although in the short-term there could be some pay-off, there are still risks and we don't know what really is going to happen to Europe down the road. If this bailout has to be followed by subsequent bailouts, then it's not going to look very good for the Chinese decision makers. So I think they'll go about it in a careful way, and it will largely go unseen by the public.

More in The Global Post, also about the Wenzhou private lending bubble and China's other debts.

 Victor Shih is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch, or fill in our speakers' request form.

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How to put a brake on society? - Bill Dodson

China's railway autorities might have symbolically reduced the speed of fast trains after the Wenzhou train crash, but - wonders author Bill Dodson in his weblog - why is it so hard to slow down society when things go into the wrong direction? From his weblog:

Chinese society – or rather, Chinese people – are still impatiently slamming up high rises like there is no tomorrow, driving recklessly through increasingly congested roadways, and flipping properties like a cook making pancakes on a Sunday at a crowded Iowa diner. Conversations in tea houses and coffee houses  and restaurants are about business – or about money. Never have I heard between sips of lattes by women in vertigo-inducing pumps or men toting man-bags a philosophical discussion about the state of the State or a hearty debate about the direction in which the society is going. It’s all about money: where to find it; how to get it; how to show it off. China is still in the fast lane, with little inclination to slow down.

More in Bill Dodson's weblog. Bill Dodson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch.

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Online rage continues, but does it change anything? - Jeremy Goldkorn

Jeremy Goldkorn

China's official media have been trying to catch up with the online anger of the country's internet users after the Wenzhou train crash, tells media analyst Jeremy Goldkorn in the Voice of America. Not for the first time, and certainly not for the last time. But does it make a difference?

The Voice of America:

Jeremy Goldkorn, a Chinese online media analyst and founder of Danwei.org, says state media found it difficult to ignore the amount of online criticism.

“By Monday morning there had been such a huge outcry in the Chinese internet and particularly on Sina Weibo about it that as the work week started on Monday the media was, the news media was playing catch up with the citizens reports on the Internet," said Goldkorn.

Seemingly, there is little the government can do to put a lid on [quiet] the outcry. Even its directives to state media outlets to limit coverage and to not investigate or comment on the cause of the accident have been leaked online, and are not being followed entirely.

State media have published strong editorials demanding a thorough investigation. ...

Then there were problems with the high-speed system.

"Just about three weeks ago, at the beginning of the month, the Beijing-Shanghai high-speed railway opened and ... and in some of the first few journeys through Beijing to Shanghai, some of the trains were delayed," noted Jeremy Goldkorn, "what should have been a five-hour journey ended up taking much, much longer, and people got stuck on cars where the air conditioning had broken down and they weren't given an explanation, and this became something like a little micro-scandal on the Internet, because people were posting photographs and complaints about that."

However, Goldkorn says it is hard to say if the public anger will prompt a re-assessment of the high-speed rail system. He notes that after a milk safety scandal hit China in 2008, there was also plenty of similar commentary online. In the end, he says, it did not seem to change monitoring of the dairy industry and food scandals continue to happen.

More in the Voice of America.

Jeremy Goldkorn is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch.

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Party arrogance, worn thin - Bill Dodson

Prime-minister Wen Jiabao claimed an 11-day illness to explain why it took him so long to pay respect to the victims of the Wenzhou train crash. But always vigilant internet users noted Wen a day after the crash on official business, notes author Bill Dodson, who analyzes on his weblog the credibility crisis for the communist party.

The sophistication of Chinese users in the use of digital communications technology has matured beyond the online petitions that marked the melamine poisoning disaster, just after the 2008 Beijing Olympics, when milk laced with a cousin of plastic was fatal to a dozen children in China and harmed scores more.

This time really is different, with Weibo tweets and blogs and editors of online newspapers combining their efforts to make a concerted attack on the high-handedness and opacity with which the CPC has been operating for decades. Now, though, the “trust me I know what I’m doing and you’re just along for the ride” arrogance of the Party has worn thin as even the man on the street seems to be questioning whether China’s infrastructure development pace is too fast.

In China Inside Out: 10 Irreversible Trends Reshaping China and its Relationship with the World, Chapter 1, I write extensively about the use of the internet in China to flush out abuse of power in the government. This time, though, government censors seem to be on the side of the citizens. Chinese users are still criticizing, tweeting, blogging and investigating with abandon.

More at Bill Dodson's weblog

Bill Dodson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch.

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