China’s economy is rosy only if you don’t mind that it’s shrinking, corrupt and sometimes deadly

Andy Stern, who led the SEIU to its current status as a statist political powerhouse, has a lengthy op-ed in the Wall Street Journal today, touting the wonders of China’s economic model.  His basic point:  China’s recent economic surge shows that government should control the economy.  To support this premise, he points, not to China’s current economic status, but to its wondrous five year plan:

I was part of a U.S.-China dialogue—a trip organized by the China-United States Exchange Foundation and the Center for American Progress—with high-ranking Chinese government officials, both past and present. For me, the tension resulting from the chorus of American criticism paled in significance compared to reading the emerging outline of China’s 12th five-year plan. The aims: a 7% annual economic growth rate; a $640 billion investment in renewable energy; construction of six million homes; and expanding next-generation IT, clean-energy vehicles, biotechnology, high-end manufacturing and environmental protection—all while promoting social equity and rural development.

Gosh!  Propaganda really sounds good when it’s read out loud to an adoring, credulous audience.

Andy Stern

I’d like to introduce Mr. Stern to another article about the Chinese economy, this one by Gordon Chang, a veteran China watcher who’s actually paying attention to the details.  Mr. Chang’s take, which is premised upon actual facts, not wishful thinking is a little different.  With a wealth of detail, he points out that, as with all socialist experiments, China is running out of economic gas:

On Wednesday, HSBC roiled markets around the world by releasing its Flash China Purchasing Managers’ Index for November. The widely followed indicator dropped from 51.0 to 48.1, crossing the crucial line of 50 that divides expansion from contraction. Most worrisome, it appears that the factory sector is shrinking due to weakness in domestic, as opposed to export, orders.

The drop in the HSBC Index, which normally moves only tenths of a point at a time, is just another sign that the world’s second-largest economy is contracting from one month to the next. The troubling news follows October numbers, which also pointed toward a rapid falloff. There was, for instance, a sharp decline in inflation, collapsing real estate prices, and a big decrease in bellwether car sales. The wheels are coming off the Chinese economy, with indicators dropping faster than virtually all analysts—including me—predicted.

Chinese technocrats have already started to react, applying monetary measures. The People’s Bank of China, the central bank, this month cut its required reserve ratio for 20 co-operative banks to 16.0%, a reduction of a half point. Officials maintained that this move did not represent a change in their tightening policy, but, as Tom Holland of the South China Morning Post points out, the denial “stretches credulity.” PBOC watchers, therefore, see the limited relaxation as a hint that the institution will soon cut reserve requirements, now at historic highs, for all banks.

You can — and should — read the whole thing here, and then go back and compare it’s tight focus on real world economic facts and figures with Stern’s airy-fairy press release on behalf of Communism.

Let me toss one more thing into the mix here, which is James’ Taranto’s masterful take-down of Eugene Robinson’s love letter to China’s heavy-handed economic management:

You Say Tomato, I Say ‘the Usually Large Rounded Typically Red or Yellow Pulpy Berry of an Herb (Genus Lycopersicon) of the Nightshade Family’

Washington Post columnist Eugene Robinson is in Red China, where his shoe-leather reporting has turned up evidence that . . . Republicans are stupid. Seriously, that’s the subject of the first of what he promises will be several columns filed from Beijing. Let’s examine his closing argument, which responds to a quote from Rick Perry:

But this ignores the big picture. Yes, China is governed–in an authoritarian, repressive, at times shockingly brutal manner–by a regime that calls itself communist. But communism self-immolated two decades ago. Walk down any commercial street in Beijing and you see storefronts, venders and hawkers selling anything under the sun. Communism is no longer a system in China. It’s just a brand name that officials haven’t figured out how to ditch.

I’m aware, of course, of the shameful human rights violations that the Chinese government commits every day–and of the government’s selfish, corrupt insistence on maintaining a monopoly of power. These atrocities can never be forgotten.

But I’m betting that the burgeoning middle class will find a way to cast off these shackles. The correct response would be to cheer them on.So, to recap: China’s Communist Party has already abandoned communist economics for something that looks very much like American commercialism. Politically, however, it remains a brutal and corrupt one-party state. But that can’t last. Robinson both thinks and hopes that the Chinese people will rise up and change the regime.

OK, now here’s the Perry quote: “I happen to think that the Communist Chinese government will end up on the ash heap of history.”

Perry said the same thing Robinson did, only much more pithily and memorably. How does that make Robinson the smart one?

And just in case anyone has forgotten that the Chinese economy also runs on slave labor (a peculiar thing for a former SEIU head to laud) and criminal corruption, the links I just gave you ought to refresh your recollection.

My bottom line:  Feudal, slave and communist economies all function the same way, which is to have a powerful central controls system over labor.  It enriches a few, and impoverishes the many, both physically and spiritually.  Even if it looks good on paper, it’s bad for the soul.

(Chinese factory photo by High Contrast.)

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  • suek

    Someone said that all governments – including fascist and communist governments – are capitalist…it’s just a matter of whether the capital is possessed by the government or by individuals.

    That being said, I have to wonder where the billions and trillions being loaned to the US and various other countries (saw an article about China loaning money to Venezuela against their oil) comes from. How much do they have? What happens if governments – like the US and various European countries – begin to default? What guarantees does China have – other than the oil of Venezuela?

  • excathedra

    An astonishingly different take on China’s economy from a Hong Kong economist:

  • Danny Lemieux

    Andy Stern would have loved Potemkin’s village. Next stop…the people’s labor paradise of NoKo?

  • jj

    I’ve given up on the idea that China’s going to inherit the earth – they’re not.  China’s a third-world mess, where the food is still grown by guys walking behind oxen pulling plows through the fields.  They’re as bad off as Zimbabwe, but they have a shinier bumper that everybody sees first, that’s all.  When they go down, it’ll be a nasty convulsion.
    Andy Stern’s a bigger fool than I thought – which is surprising, because I already thought he was a very considerable fool.  I love the way these guys like him figure that a regime that routinely executes tens of thousands of people a year, for everything from making rude noises at the leadership to being Christian, is going to somehow let them have their way, be their pal, and let them get away with whatever they want to do.  Andy, you witless horse’s ass, have you not noticed there are no unions in China?  There weren’t in the Soviet Union, either – remember?  Does whatever portion of your anatomy passes for a brain not notice these striking, simple, obvious, facts?  What do you think that portends, oh Dimwit of the Eastern Star?
    Where the hell do these people come from????

  • Ymarsakar

    My opinions on the Maoist derived government of China and how it has suppressed and destroyed China’s traditional history and culture, isn’t appropriate for even here.

  • Ymarsakar

    a peculiar thing for a former SEIU head to laud

    Peculiar? Has anything the SEIU done in the US made you think they dislike having slaves?  It’s only peculiar to people who think the SEIU is out to protect or represent workers against the management…

  • bizcor

    Andy figures he will be in control over there.

  • Spartacus

    So, let’s review:
    – The region of Eternal Joy and Oil and Jihad is set to explode, conventionally or nookyoolarly, due to annoying little things like nutcases with centrifuges and increasingly frequent defenestration of dastardly dictators by unstable upstarts.  This should have the price of oil up around $200 per barrel, otherwise known as an adverse supply shock.
    – The world’s second largest economy has slowed its meteoric growth, and perhaps even started to contract.
    – The Euro is about to collapse in a nasty mess of toxic debt.
    – The US credit rating has also been downgraded, and we are being led by a group of imbeciles whose only reaction is to scream, “More cowbell!”
    Oh, 2012 is gonna be a fun year!  Love to stay and type more, but I gotta run out and get some more ammo and canned food…