You'll Never Be Chinese

[Guest_FaFa!_*]

http://www.prospectmagazine.co.uk/politics/mark-kitto-youll-never-be-chinese-leaving-china/

Good article on why this chap is leaving China. Mark Kitto used to own the first expat magazine in Beijing called That's Beijing, which he ran until the CCP basically stole it from him 7 years ago. It appears after that he opened a guesthouse in the countryside but is now leaving China with his Chinese wife and family. It's a long article, but there are many pertinent points that he makes about modern Chinese culture. I heartily recommend reading it in full.

Deng had promised the Chinese people material wealth they hadn’t known for centuries on the condition that they never again asked for political change. The Party said: “Trust us and everything will be all right.”

Twenty years later, everything is not all right.

In brief, Chinese property prices have rocketed; owning a home has become unaffordable for the young urban workers; and vast residential developments continue to be built across the country whose units are primarily sold as investments, not homes. If you own a property you are more than likely to own at least three. Many of our friends do. If you don’t own a property, you are stuck.

When the bubble pops, or in the remote chance that it deflates gradually, the wealth the Party gave the people will deflate too. The promise will have been broken. And there’ll still be the medical bills, pensions and school fees. The people will want their money back, or a say in their future, which amounts to a political voice. If they are denied, they will cease to be harmonious.

The government is so scared of the people it prefers not to lead them.

In rural China, village level decisions that require higher authorisation are passed up the chain of command, sometimes all the way to Beijing, and returned with the note attached: “You decide.” The Party only steps to the fore where its power or personal wealth is under direct threat. The country is ruled from behind closed doors, a building without an address or a telephone number. The people in that building do not allow the leaders they appoint to actually lead. Witness Grandpa Wen, the nickname for the current, soon to be outgoing, prime minister. He is either a puppet and a clever bluff, or a man who genuinely wants to do the right thing. His proposals for reform (aired in a 2010 interview on CNN, censored within China) are good, but he will never be able to enact them, and he knows it.

To rise to the top you must be grey, with no strong views or ideas. Leadership contenders might think, and here I hypothesise, that once they are in position they can show their “true colours.” Too late they realise that will never be possible. As a publisher I used to deal with officials who listened to the people in one of the wings of that building. They always spoke as if there was a monster in the next room, one that cannot be named. It was “them” or “our leaders.” Once or twice they called it the “China Publishing Group.” No such thing exists. I searched hard for it. It is a chimera.

It is often argued that China led the world once before, so we have nothing to fear. As the Chinese like to say, they only want to “regain their rightful position.” While there is no dispute that China was once the major world superpower, there are two fundamental problems with the idea that it should therefore regain that “rightful position.”

A key reason China achieved primacy was its size. As it is today, China was, and always will be, big. (China loves “big.” “Big” is good. If a Chinese person ever asks you what you think of China, just say “It’s big,” and they will be delighted.) If you are the biggest, and physical size matters as it did in the days before microchips, you tend to dominate. Once in charge the Chinese sat back and accepted tribute from their suzerain and vassal states, such as Tibet. If trouble was brewing beyond its borders that might threaten the security or interests of China itself, the troublemakers were set against each other or paid off.

The second reason the rightful position idea is misguided is that the world in which China was the superpower did not include the Americas, an enlightened Europe or a modern Africa. The world does not want to live in a Chinese century, just as much of it doesn’t like living in an American one. China, politically, culturally and as a society, is inward looking. It does not welcome intruders—unless they happen to be militarily superior and invade from the north, as did two imperial dynasties, the Yuan (1271-1368) and the Qing (1644-1911), who became more Chinese than the Chinese themselves. Moreover, the fates of the Mongols, who became the Yuan, and Manchu, who became the Qing, provide the ultimate deterrent: “Invade us and be consumed from the inside,” rather like the movie Alien. All non-Chinese are, to the Chinese, aliens, in a mildly derogatory sense. The polite word is “Outsider.” The Chinese are on “The Inside.” Like anyone who does not like what is going on outside—the weather, a loud argument, a natural disaster—the Chinese can shut the door on it. Maybe they’ll stick up a note: “Knock when you’ve decided how to deal with it.”

A leader must also offer something more than supremacy. The current “world leader” offers the world the chance to be American and democratic, usually if they want to be, sometimes by force. The British empire offered freedom from slavery and a legal system, amongst other things. The Romans took grain from Egypt and redistributed it across Europe.

A China that leads the world will not offer the chance to be Chinese, because it is impossible to become Chinese. Nor is the Chinese Communist Party entirely averse to condoning slavery. It has encouraged its own people to work like slaves to produce goods for western companies, to earn the foreign currency that has fed its economic boom. (How ironic that the Party manifesto promised to kick the slave-driving foreigners out of China.) And the Party wouldn’t know a legal system if you swung the scales of justice under its metaphorical nose. (I was once a plaintiff in the Beijing High Court. I was told, off the record, that I had won my case. While my lawyer was on his way to collect the decision the judge received a telephone call. The decision was reversed.) As for resources extracted from Africa, they go to China.

There is one final reason why the world does not want to be led by China in the 21st century. The Communist Party of China has, from its very inception, encouraged strong anti-foreign sentiment. Fevered nationalism is one of its cornerstones. The Party’s propaganda arm created the term “one hundred years of humiliation” to define the period from the Opium Wars to the Liberation, when foreign powers did indeed abuse and coerce a weak imperial Qing government. The second world war is called the War of Resistance Against Japan. To speak ill of China in public, to award a Nobel prize to a Chinese intellectual, or for a public figure to have tea with the Dalai Lama, is to “interfere in China’s internal affairs” and “hurt the feelings of the Chinese people.” The Chinese are told on a regular basis to feel aggrieved at what foreigners have done to them, and the Party vows to exact vengeance on their behalf.

Everything the Party does to fix things in the short term only makes matters worse in the long term by setting off property prices again. Take the recent cut in interest rates, which was done to boost domestic consumption, which won’t boost itself until the Party sorts out the healthcare system, which it hasn’t the money for because it has been invested in American debt, which it can’t sell without hurting the dollar, which would raise the value of the yuan and harm exports, which will shut factories and put people out of work and threaten social stability.

The Party does include millions of enlightened officials who understand that something must be done to avert a crisis. I have met some of them. If China is to avoid upheaval then it is up to them to change the Party from within, but they face a long uphill struggle, and time is short.

I have also encountered hundreds of well-rounded, wise Chinese people with a modern world view, people who could, and would willingly, help their motherland face the issues that are growing into state-shaking problems. It is unlikely they will be given the chance. I fear for some of them who might ask for it, just as my classmates and I feared for our Chinese friends while we took our final exams at SOAS in 1989.

I read about Ai Weiwei, Chen Guangchen and Liu Xiaobo on Weibo, the closely monitored Chinese equivalent of Twitter and Facebook, where a post only has to be up for a few minutes to go viral. My wife had never heard of them until she started using the site. The censors will never completely master it. (The day my wife began reading Weibo was also the day she told me she had overcome her concerns about leaving China for the UK.) There are tens, maybe hundreds, of thousands of mainland Chinese who “follow” such people too, and there must be countless more like them in person, trying in their small way to make China a better place. One day they will prevail. That’ll be a good time to become Chinese. It might even be possible.

[singlemalt]

Thanks for posting.

[TwoWolves]

For us this is the most important section :

Take the recent cut in interest rates, which was done to boost domestic consumption, which won’t boost itself until the Party sorts out the healthcare system, which it hasn’t the money for because it has been invested in American debt, which it can’t sell without hurting the dollar, which would raise the value of the yuan and harm exports, which will shut factories and put people out of work and threaten social stability.

[silver surfer]

Very interesting, thanks for posting.

[Fortune]

I'm sure what this guy is saying is all too true, China has a long way to go to become a 'real' superpower. Regarding China's relationship to foreigners, I think they are like Korea in the 1990's. Chinese chauvinism has always been a problem for the Chinese, just like American haughtiness or the legendary British arrogant sneer (the epitomy of which is represented by Jeremy Paxman).

However the real question is if China is so crap, where else is there to go? Go back to blightly? Is this really a step up or a step down? I see China as an America in the 1920's, just before the great wipe-out. Imagine if you were an American in the 1930's: you stuck it out through the depression, managed to survive WWII, and eventually you rode the biggest bull market perhaps in human history (bought a house and some stocks and stuck with it for the rest of your life). I'm not saying that buying stocks and flats in China is a great idea right now, rather I'm talking about the tremendous opportunities that awaited those who managed to see the long term trend and ride it out. Whether anyone likes it or not, China is at the very early start of a huge long-term trend. I believe cycles guru Martin Armstrong said that China will become the world's financial center by 2016 - New York and the city of London are finished. Countries are just like investment: spot the trend early, get on board, ride the up and downs, and get out before the bubble pops.

[Ruffneck]

I don't think China was ever the worlds superpower in ancient times.Such statements are laughable.They have never been an empire builder like the UK , Roman Italy , Egypt etc and barely traded anything with the west until the 1500s or so.

[GeordieAndy]

Really interesting article and having spent a little time in China I can really back up a lot of his views especially the 'me culture' of the whole country having millions of "little emperors" due to the one child (boy) policy.

[The Masked Tulip]

I don't think China was ever the worlds superpower in ancient times.Such statements are laughable.They have never been an empire builder like the UK , Roman Italy , Egypt etc and barely traded anything with the west until the 1500s or so.

Well, they did become empire builders under the Khans - tried to invade Japan but a storm put an end to that, but they took over much of the Korean peninsular, south east asia and marched westwards to what is now the Ukraine/Poland.

Stirrups and silk shirts.

[Nationalist]

One important point he makes is that to be a world superpower you have to be outward looking. The big empires, Roman, British, American, charged around the world and sucked people into the centre. The Romans offered citizenship to the elite of the recently conquered and these elite lurved to wear togas, have Roman-style parties, live in Roman-style houses, go to the coliseum, etc. They totally bought into the Roman dream.

The brains of the world still move to the USA and buy into the American dream.

[StainlessSteelCat]

I'm sure what this guy is saying is all too true, China has a long way to go to become a 'real' superpower. Regarding China's relationship to foreigners, I think they are like Korea in the 1990's. Chinese chauvinism has always been a problem for the Chinese, just like American haughtiness or the legendary British arrogant sneer (the epitomy of which is represented by Jeremy Paxman).

However the real question is if China is so crap, where else is there to go? Go back to blightly? Is this really a step up or a step down? I see China as an America in the 1920's, just before the great wipe-out. Imagine if you were an American in the 1930's: you stuck it out through the depression, managed to survive WWII, and eventually you rode the biggest bull market perhaps in human history (bought a house and some stocks and stuck with it for the rest of your life). I'm not saying that buying stocks and flats in China is a great idea right now, rather I'm talking about the tremendous opportunities that awaited those who managed to see the long term trend and ride it out. Whether anyone likes it or not, China is at the very early start of a huge long-term trend. I believe cycles guru Martin Armstrong said that China will become the world's financial center by 2016 - New York and the city of London are finished. Countries are just like investment: spot the trend early, get on board, ride the up and downs, and get out before the bubble pops.

You could well be right - but the period of US history you are describing is a generation or so long. The savvy investor of 1930s America probably wouldn't have benefited that much (although their children would have). They would have also had to been incredibly lucky at stock picking - particularly technology wise. Radio was big in the 20s/30s - but by the 50s it was TV.

It's a massive gamble to apply the same thinking to China. I'm pretty bullish on China in the long term too - but goodness knows what'll happen over there politically in the next 25-30 years. If they experience any degree of hardship in those years it's not likely to be pretty.

[Garf]

I see China as an America in the 1920's, just before the great wipe-out. Imagine if you were an American in the 1930's: you stuck it out through the depression, managed to survive WWII, and eventually you rode the biggest bull market perhaps in human history (bought a house and some stocks and stuck with it for the rest of your life). I'm not saying that buying stocks and flats in China is a great idea right now, rather I'm talking about the tremendous opportunities that awaited those who managed to see the long term trend and ride it out.

But China's demographic situation doesn't look good for folks hoping to "ride out" a 1930s-style depression and enjoy a 1950s style era of prosperity. In 2000 there were six workers for every over-60. By 2030, there will be barely two. (Source: http://www.guardian.co.uk/world/2012/mar/20/china-next-generation-ageing-population)

[Guest_FaFa!_*]

I'm sure what this guy is saying is all too true, China has a long way to go to become a 'real' superpower. Regarding China's relationship to foreigners, I think they are like Korea in the 1990's. Chinese chauvinism has always been a problem for the Chinese, just like American haughtiness or the legendary British arrogant sneer (the epitomy of which is represented by Jeremy Paxman).

However the real question is if China is so crap, where else is there to go? Go back to blightly? Is this really a step up or a step down? I see China as an America in the 1920's, just before the great wipe-out. Imagine if you were an American in the 1930's: you stuck it out through the depression, managed to survive WWII, and eventually you rode the biggest bull market perhaps in human history (bought a house and some stocks and stuck with it for the rest of your life). I'm not saying that buying stocks and flats in China is a great idea right now, rather I'm talking about the tremendous opportunities that awaited those who managed to see the long term trend and ride it out. Whether anyone likes it or not, China is at the very early start of a huge long-term trend. I believe cycles guru Martin Armstrong said that China will become the world's financial center by 2016 - New York and the city of London are finished. Countries are just like investment: spot the trend early, get on board, ride the up and downs, and get out before the bubble pops.

The US in the late 20s did not face a demographic crisis, a resource crisis or a heavily polluted country. If I was going to invest in a developing country I'd pick Indonesia, Cambodia, Vietnam or Myanmar as having potential strong growth (though it would be risky) with an emphasis on Cambodia. I cannot see China becoming the financial centre of the world by 2016 - they would need to have greater transparency and the rule of law. Certainly the UK and US have problems but nothing on the China scale I would argue. Also London and New York will remain financial centres simply due to their location. In the UK you can trade all three timezones in one day for example and even in the most bullish China case, the US will remain a leading economy.

I don't think China was ever the worlds superpower in ancient times.Such statements are laughable.They have never been an empire builder like the UK , Roman Italy , Egypt etc and barely traded anything with the west until the 1500s or so.

As others have pointed out, China did have its external adventures. The 1000 year colonisation of Vietnam for instance. Also due to their size they were able to get most of the goods and services they wanted domestically, as opposed to the British Empire. Certainly China was the dominant power in its immediate sphere of influence and they wish to return to that. You didn't get world superpowers until the British Empire - which is the point I think you maybe getting at, but now the stage is global China will want that too.

[interestrateripoff]

When the inevitable recession hits China it's going to be very interesting to see what happens there politically. A promise of constant wealth creation is clearly going to bite the communist party in the a$$ when people realise promises can't be kept and wealth inevitable gets destroyed.

[jonb]

The US in the late 20s did not face a demographic crisis, a resource crisis or a heavily polluted country. If I was going to invest in a developing country I'd pick Indonesia, Cambodia, Vietnam or Myanmar as having potential strong growth (though it would be risky) with an emphasis on Cambodia. I cannot see China becoming the financial centre of the world by 2016 - they would need to have greater transparency and the rule of law. Certainly the UK and US have problems but nothing on the China scale I would argue. Also London and New York will remain financial centres simply due to their location. In the UK you can trade all three timezones in one day for example and even in the most bullish China case, the US will remain a leading economy.

As others have pointed out, China did have its external adventures. The 1000 year colonisation of Vietnam for instance. Also due to their size they were able to get most of the goods and services they wanted domestically, as opposed to the British Empire. Certainly China was the dominant power in its immediate sphere of influence and they wish to return to that. You didn't get world superpowers until the British Empire - which is the point I think you maybe getting at, but now the stage is global China will want that too.

Hong Kong could become the financial centre of the world, though it faces competition from Singapore. Both have British style legal systems.

[PopGun]

For us this is the most important section :

Take the recent cut in interest rates, which was done to boost domestic consumption, which won’t boost itself until the Party sorts out the healthcare system, which it hasn’t the money for because it has been invested in American debt, which it can’t sell without hurting the dollar, which would raise the value of the yuan and harm exports, which will shut factories and put people out of work and threaten social stability.

Beautiful, isn't it?

[workhou]

Anyone who has lived in Asia for a length of time knows how essentially nationalistic these east Asian countries can be. They have a completely different mindset to Europeans. When I lived in Seoul the phrase 'peasants in suits' often came to mind in my dealings with Koreans. Korea has enjoyed spectacular development from an agricultural economy to technically advanced in the space of what 20, 30 years. So on the face of it you would expect a congruent sophisticated culture but in reality old traditions and loyalties die hard. China is exactly the same but aside from a few developed areas even worse, foreigners in Asia will never be excepted the same way foreigners are made welcome in our country. This may take decades to change in China, maybe it won't change with the Communist party relying so strongly on nationalist sentiment.

At the end of the day political stability is the most important factor for emerging economies, maybe that's why China won't be the superpower that many on here expect.

[Guest_FaFa!_*]

Hong Kong could become the financial centre of the world, though it faces competition from Singapore. Both have British style legal systems.

Well, possibly. My point is that London may decline, but I don't see China (ie Shanghai) as the world's financial anytime soon. I certainly don't think New York and London are 'finished'

[Ruffneck]

Why would you want London to be the financial capital of the world? It costs the economy far more than it brings in or 'creates'

Let Beijing become the financial capital if you ask me and let the cancer spread there like it did in London.

[Guest_FaFa!_*]

Why would you want London to be the financial capital of the world? It costs the economy far more than it brings in or 'creates'

Let Beijing become the financial capital if you ask me and let the cancer spread there like it did in London.

I don't especially. I am just making the point that the money will naturally shift there. There will be a financial centre in America, in Europe and in Asia. With regard to your comment, the cancer is already well entrenched in China.

[PopGun]

China to embrace the American dream mk2?

More likely to end up being Japanese copycats i reckon.

[dryrot]

Hi,,

"In brief, Chinese property prices have rocketed; owning a home has become unaffordable for the young urban workers; and vast residential developments continue to be built across the country whose units are primarily sold as investments, not homes. If you own a property you are more than likely to own at least three. Many of our friends do. If you don’t own a property, you are stuck."

This is the UK, right?

[easy2012]

I don't think China was ever the worlds superpower in ancient times.Such statements are laughable.They have never been an empire builder like the UK , Roman Italy , Egypt etc and barely traded anything with the west until the 1500s or so.

Maybe you should research more into the Silk Road regarding the trade.

It is also not what you think that matters, it was the thoughts of vassal states who sent over cold hard gold that mattered.

[easy2012]

The US in the late 20s did not face a demographic crisis, a resource crisis or a heavily polluted country. If I was going to invest in a developing country I'd pick Indonesia, Cambodia, Vietnam or Myanmar as having potential strong growth (though it would be risky) with an emphasis on Cambodia. I cannot see China becoming the financial centre of the world by 2016 - they would need to have greater transparency and the rule of law. Certainly the UK and US have problems but nothing on the China scale I would argue. Also London and New York will remain financial centres simply due to their location. In the UK you can trade all three timezones in one day for example and even in the most bullish China case, the US will remain a leading economy.

Firstly, thank you for the very interesting link and I do agree that it is hard for a foreigner to make it in China (and the foreigners include those Chinese diaspora in HK, Singapore, Taiwan, SE Asia etc).

US in the 1900 was a wild west and totally corrupt and judges could be bought (thought that improved by 1920) - read biography of people like the Jay Gould ( The gilded age Barron) if you want to know more. The bucket shops were nearly a total fraud and monopoly/price fixing were rift.

Those who believe this time zone thing is sufficient in this modern electronics age is just deluding themselves. The capital market goes where the capital is. US was obviously in the 'wrong' time zone, but that did not stop the rise of New York. London regained its foothold in the 80s after the big bang with lax regulations and favourable tax regime (to banks that is it) rather then being in the right time zone. Having said that, of course this is not the end of the City of London, it is just the weight that would have shifted.

London sky was black during the industrial revolution too.

Politics in a country as big as China is always going to be very complex and it is always more than whatever Hu said (the era where what Mao/Deng said was the law was truly over when Jiang too over).

You are right that China faces a demographic timebomb that 1920 US did not face, but in term of state of legal development, it is similar to the US in the 1900 or so. However, with the west getting a bit more corrupt, and the East getting a little bit less corrupt each day, they may meet somewhere in the middle in a decade or two rather than a century...

[Executive Sadman]

There is one final reason why the world does not want to be led by China in the 21st century. The Communist Party of China has, from its very inception, encouraged strong anti-foreign sentiment. Fevered nationalism is one of its cornerstones.

Are we talking actual 'anti foreign' sentiment (the 1930s type) or the type of legitimate 'we dont want our country overrun with religious nuts who like to blow things up' sentiment that thanks to political correctness is now taboo in the west.

If its a lack of political correctness, thats no bad thing.

[Gigantic Purple Slug]

There is one final reason why the world does not want to be led by China in the 21st century. The Communist Party of China has, from its very inception, encouraged strong anti-foreign sentiment. Fevered nationalism is one of its cornerstones.

Are we talking actual 'anti foreign' sentiment (the 1930s type) or the type of legitimate 'we dont want our country overrun with religious nuts who like to blow things up' sentiment that thanks to political correctness is now taboo in the west.

If its a lack of political correctness, thats no bad thing.

It's more like a "let's divert peoples attention away from the real issues" type of anti foreign sentiment.

In other words, the most dangerous kind.