Tuesday, January 15, 2019

Is China' s President Xi Dumb or Something?

I've been wondering about China lately; well doesn't everyone. Because it seemed to me that President Xi's promotion to President-for-life seems to indicate that the rulers of China don't get it.

Then I wondered about the Belt and Road initiative, which seemed to me to be a return to the ancient Silk Road and imperial China's policy of having tributary states. And given that it is a big government infrastructure initiative, I figured it was bound to be a bottomless pit of waste and fraud. Like all government programs.

Now I  read that under President Xi, who gained power in 2012, Chinese domestic lending has switched from mostly private sector to mostly state sector.
In 2013, 57 percent of loans went to private firms and 35 percent to state-controlled firms. By 2016, there had been a stunning reversal; state firms received 83 percent of loans, compared with 11 percent for private firms. Much of this lending came from state-owned banks.
There are reports that Chinese growth is declining rapidly, maybe to zero. And I recently saw a graph showing Chinese energy consumption flatlining since 2013.

I wonder what President Xi is thinking.

Well, obviously he is thinking about his power. Maybe he thinks that his power depends on maintaining the state-owned companies and their jobs because otherwise he will face too much opposition from disappointed lifers in the state industries. Maybe he thinks that state economic power translates into regime power.

Maybe widespread unrest and the 5,000 or so annual violent protests that we sorta hear about have taught the Chinese Communist Party to hunker down and stick to regime defense.

Maybe the stock market decline in third quarter 2018 was about factoring in economic decline in China.

Maybe the political hunkering down by the Xi regime may have the reverse effect and provoke anti-regime protests.

Maybe the Belt and Road initiative is turning out to be a staggering mess that is bleeding Chinese wealth into stupid boondoggles that don't have a hope of profitability.

Maybe the next big challenge for the US President is to bail out China from a Xi-provoked nose-dive.

OK, I know that my view of this is colored by my maxim, that
government is an armed minority, occupying territory, and taxing the people to reward its supporters.
In my view what this maxim tells us is that you can't expect a damn politician to understand anything more than getting power and keeping it by plundering the people to reward the supporters. Given how long loot and plunder has been going on in human history it would be naive to expect that your average politician would grasp that to head up a big and powerful world-conquering state today requires first of all a world-conquering economy, and you don't get a world-conquering economy unless the state keeps its cotton-picking debt-drenched hands off the private sector.

And it would be even more naive to expect lefty politicians to grasp such a notion, when they have been carefully taught to hate and to fear the market-based economy since they graduated out of their red diapers.

It's a wonder. In the last 200 years we have seen a Great Enrichment all across the world whereever the market has been allowed to work its magic. And 97.2 percent -- my crude estimate -- of people in the richest countries don't have a clue about that.

All across the USA we are shaming people for not being sufficiently lefty and woke. When we should be shaming them for not knowing where their prosperity comes from.

And it would be a global tragedy if China's present rulers dump its excellent people back into the toilet, back to the days of the genius Mao Zedong.

No comments:

Post a Comment