Anyone who has read RJ Rummel’s China’s Bloody Century: Genocide and Mass Murder Since 1900 can only wish that the Chinese would get a merciful break after all that. (Except for the neocons who are eager to get a conflict going with China and for whom mercy, I gather, is not a virtue.)
A Chinese co-worker recently returned from a visit back home after not being back in China since 2000. His account of the changes he saw from those 7 years of the (somewhat) unleashed market is amazing and encouraging.
The first thing he told me: “Everyone has cars!” In 2000 only a small elite had cars, but now a large middle class does, and nice ones. Of course, this and the other things he told me apply primarily to places like his home city Nantong (on the other side of the Yangtze River from Shanghai), Shanghai and a few other cities he was able to visit. Stock ownership has gone from something like 10% of the Chinese in 2000, to a stunning two-thirds of the urban population. Not only cars but cell phones, media players and other gadgets are not only ubiquitous in the cities but often have superior features to what we have in the US. My friend had trouble recognizing his home city due to all the new roads (for all the new cars to get around on) and new buildings. My friend, who is 43, says that many of his peers back in China are now millionaires from businesses started 5 to 10 years ago. The private sector is, of course, where the ambitious young Chinese go.
One worrying aspect of his report is that stock market speculation seems to be in the sort of frenzy we often see in a boom. His father put money into the stock market a month ago and the value of his investment has more than doubled in that time. This is typical. Some people have shut down their businesses and put the money into the stock market instead.
Another interesting note is that the government has cracked down on stores selling pirated music, movies and software. In 2000 they were everywhere, but this time they were nowhere to be found.
Even if there is some of this that is an unsustainable bubble, clearly China is going through a market revolution that is changing life for tens of millions of Chinese at a record-breaking pace. There is hope in the air in China. Finally.
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“There is hope in the air in China. Finally.” Why? Only because now in China you can drive a car, put your money in market stocks, become an owner or a millionaire, use cell phones and other tech gadgets?!?!?!?! What a great perspective, dude! A real moment of truth… I wish you could only talk about the downsides of this so-called market revolution too. Here, we’re just double-blinded. BRAVO!
China still makes me very nervous. With their money supply increasing as fast as 25% in some instances, that tells me that there must be some huge inefficiencies in the Chinese economy that are being glossed over – especially considering its communist roots. When the adjustment comes, it’s hard to believe that it will play out well for the Chinese people. Hopefully, they will manage their great depression better than the US did.
IMHO, a nicer growth strategy would have been to simply continuously expand the boundaries of Hong Kong.
Also, is China gaining freedom for the sake of freedom and liberty, or are they gaining freedom as a strategic counter balance to the US. The question is important because the US is on shaky economic grounds. Without that pressure, I don’t know how easy it would be for them to turn in on themselves.
It is quite amazing to see a billions of people industrialize though. It was amazing to watch Germany too, right up till 1940. I really hope they get it right this time.
@Yves: What are the down-sides of the market revolution? In China people are getting freer and wealthier across the land, much moreso when they are allowed to move and trade freely. What is the downside?
The inevitable coming collapse of the financial markets does not bode well for the new wealthy. Look how the new wealthy fared with Mao’s handling of their last crisis. Look how bad things got in the free country of the US upon the Great Depression. It seems not possible for the statist and militarist groups in the communist party to handle their crisis any more liberally. But I hope I am wrong and China becomes a beacon of freedom.
I confess I’m of two minds about China. Sprott Asset Management, however, is not:
http://www.sprott.com/pdf/marketsataglance/04-2007.pdf
“Double-blinded!?!?!?!?!?!?!”
And “here,” for that matter.
Yves, you are (so far) so enigmatic as to be incomprehensible.
But I’ll confess to curiosity, if you care to resolve it.
I don’t know. The play is the same but the actors have all changed. To me it seems like 1927 but this time we (the USA) are playing Great Britain. And China has taken our part in this play. What scares me is I think we may also take up Germany’s part too. In are new “Greater Depression”, after the Chinese Stock market collapse. Will we just stoke the fires of protectionism. Or will we also “solve” are illegal immigration problem. Scares the hell out of me!
China’s macroeconomic policy since 1990s is actually keynesian. There was never a free market in china whatsoever, though it is still far more better than the era before economic liberalization (before 1980s). Chinese government exaggerated their economic growths by manipulating statistics and records, in order to attract more investment from japan, EU, taiwan, USA, etc.
When describing his views on Amazon, RJ Rummel goes as follow: “[...] democratically free people: (1) Do not suffer from and never have had famines, and by theory, should not—freedom is therefore a solution to hunger and famine; (2) Have the least internal violence, turmoil, and political instability; (3) Have virtually no government genocide and mass murder, and for good theoretical reasons—freedom is therefore a solution to genocide and mass murder and the only practical means of making sure that ‘Never again!’; (4) Do not make war on each other, and the greater the freedom within two nations, the less violence between them—thus freedom is a solution to war—the only solution to war that actually works after centuries of searching and proposals.”
As a children of democratic peace, I personnaly have to admit that ‘freedom’ has been a fuel for greater achievement in life both personnaly and professionally. Plus, I have never suffered of famine, genocide, or any war what so ever. However, did it protected me from suffering? No. Did it work for you? Therefore, I don’t agree when Rummel states that democratically free people have the least internal violence and turmoil. On the contrary, we know that Western countries, with their market-focused economy and societies have also lost many people on the way. There’s also a true misery around those parts, that we often prefer to skip. What is the human price of market-driven economies? How do you explain that work itself annualy kills more than 2 millions of people worldwide (ILO stats)? Do you consider work as a trivial activity? How do you tackle the hidden mass violence that pulls aside people that just don’t stand the current market-based economic pace (through depression, burnout or suicide)? Why is it that today there aren’t enough paid jobs for everyone? What does it tell us about the actual inner poverty of such societal system?
When Rummel adds that “freedom is a method of nonviolence and human security—the most peaceful, happiest, and wealthy nations are those whose people are free”, I’d rather ask him to clarify his own definition of ‘freedom’. Does freedom necessarly include market-driven economies? Does democracy-as seen in today’s economic liberal nations-necessarly hold the key to happiness and peace? Are there alternatives? Is there a way to happiness anyway?
Finally, do humans feel more happy working 10 hours a day, 6 days a week, driving a car, putting money in market stocks, becoming an owner, using cell phones and other tech gadgets? As a matter of fact, I’m just questionning here. Couldn’t be provocative enough to give any answer or make any definite statement anyway, as Carson does in his post… and as Mises Blog does anyway every day!
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